WORKSHOP ITEM: 3 Chief Chris Olson
Title
PAWN SHOP ORDINANCE
Background
In April of 2008, staff provided Council with a presentation on pawnbroker issues and regulation. As a result of this presentation, Council directed staff to research and present a recommendation on updated license fees to Council. In November of 2008 Council was presented with staff recommendations for a new licensing fee schedule along with changes to the Pawn Ordinance. The yearly license fee went from $15,000.00 to $5,000.00 with the addition of transaction fees ($2 per transaction and, for non-complinant transactions, $4 each). In December of 2008 Lincoln Pawn, the long-time holder of the City of Blaine's single pawn license, went out of business. It was not until October of 2010 that another business, We Pay More Pawn, secured the available pawn license.
From October 2010 to August 2011, the Blaine Police Department has worked with the new pawn business to ensure compliance along with a good working relationship. During that time period, which was considered a learning phase for the new pawn company, no non-compliant transaction fees were charged to We Pay More Pawn; however, there were twenty violations (no date, serial numbers not documented, wrong serial numbers documented, mis-identification of items, etc.). To assist in tracking pawn activities, the Blaine Police Department utilizes APS to monitor transactions. APS is utilized throughout the metro (including Burnsville) and outstate areas of Minnesota.
In January of this year, We Pay More Pawn made a request to change the Ordinance in order to lower the holding and redemption periods; the request was reviewed by Police Department Staff and, upon determining these changes would not adversely impact the management of the pawn business, a recommendation was made to Council to change the holding and redemption periods. Those changes were then put into Ordinance.
Detective McLain, the primary investigator responsible for monitoring pawn activity, does spend approximately one hour a week for this management. Additional City Staff time is spent, which includes other police staff, the Finance Department and City Clerk's Office. There is a direct correlation between the amount of pawn activity and the time spent on managing the pawn business; therefore, transaction fees, which include non-compliant transactions, should remain the same. The yearly license fee can be reduced. Upon consideration of fee reduction, it should be noted that since 2008, we have only had one full year to monitor pawn activity under the fees that were introduced in 2008. Also, the more non-compliant transactions that exist, the more monitoring and management is required. Any yearly pawn fee should include an ability to set a lower fee for compliance (i.e., for each year the business does not exceed a non-compliance threshold, the yearly fee will be reduced on a graduated scale).
As an additional note, earlier this year during the legislative session, changes were made to the Minnesota State Statute governing pawn operations in the State (holding and redemption periods). Changes to the City of Blaine's Ordinance on pawnshops will need to be updated to reflect these legislative changes, along with any other changes requested by Council.
Recommendation
Council Direction to Staff
· Determine a yearly fee schedule which includes a graduated scale for compliance
· Update the Ordinance to include Legislative changes