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99-273ORIGINAL ,�� ���°� �..�-°-, � �-, � ���� ORDINANCE CITY OF SAINT PAUL, MINNESOTA Presented By Refened To Committee Date : An ordinance amending Saint Paul Legislative Code to increase the Automated Pawn System Billable Trt to reflect enforcement costs THE COUNCIL OF THE CITY OF SAINT PAUL DOES Section 1 Section 310.18 of the Saint Paul Legislative Code is Sec. 310.18. License fee schedule. CouncilFile# �� -a`�3 Ordinance # Green Sheet # � �O� 310 Fee amended to read as follows: Notwithstanding the provision of any er ordinance or law to the contrary, the following fees are hereby provided for a11 licenses listed herein. These fees supersede all inconsistent provisions, including, but not nnited to, graduated fee provisions, in these chapters and in other ordinances and laws, and ' ude the fee for the license application as part of the license fee; provided, however, that ' section does not amend or modify sections 310.09(a) or 310.09(d) of the Legislative Code � respect to exempt organizations or late fees. Pursuant to section 310.09(b) of the Legislativ Code, these schedules shall be posted in the office of the Director of the Office of Licens Inspections and Environmental Protection. These fees shall be effective for license renewals d new license applications occurring on and after January 1, 1995, or on tha effective dat of this section, whichever is Iater; provided, however, that with respect to all license whos renewal dates occur a8er the effective date of this new schedule, there shall be no increas in, nor offsets or refunds of, the existing fees paid, or due and owing. �** (� EI�F"ORCEMENT LEVEL 6 32 Chapter/Section 1Vo. Lieense Description Fee 33 127 Courtesy Benches $ 20.00 �>-� �3 2 � 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 167 Commerciai Vehicle - 18.00 Replacement 225.08 Firearms 317.00 278 Gambling Hall 354.00 318 MAD Operation with up to 583.00 10 Each MAD overl0 42.00 Music Machine 44.00 Amusement Rides to 10 301.00 Amusement Rides over 10 28_00 T.V. Units per location 28.OQ 331.05 Used Equipment Review Fee 4 0 341 Single Service Container 445.00 344 Pawn Shops --�;§8A:89 License Fee 1 0• 00•QO �nitial Tnvestigation Fee 1.500.00 Billable Transaction Fee �.00 345 Transient Merchant 65.00 3'76.16 Taa;icab Driver Rene al 21.00 Taacicab Driver Du icate 6.00 Taxicab Duplica Plate 16.00 391 Soliciting F s- Tag Days 21.00 401 Secondhan Dealer Motor 87.00 Vehicle P s - second locati 402 Tem orary Gambling (3 21.00 es) 403 ingo Halls 174.00 409.24(1) Gambling Manager 66.00 409A5(i) Gambling Location - A 66.00 Gambling Location - B 66.00 Gambling Location - C 66.00 409.04(g}(5) Modification of Pazking 375.00 357.03 Solid Waste Transfer Station 1,500.00 408 Recycling Processing Center 750.00 414 Massage Therapy-Practical 50.00 Examination Fee Massage Therapy-Written 20.00 Examination C/�l- � 7�.3 1 I 429 2 3 4 5 6 7 8 9 10 11 12 198 200.03 200.05 200.08 Infectious Waste Processing Facility Keeping of Animal-Renewal Dog License Dog License - Senior Citizen Dog License - Lifetime (with Microchip) Dog License - Senior Citizen, Lifetime (with Microchip) Dog License - Duplicate Impounding Fee Boazding Fee - Per Day Animal Adoption - St. Pau1 Resident Animal Adoption - Nonresident Animal-Institutional Reseazch Use This ardinance shall take effect and be approval and publication. Adopted by Council Date Adoption Certifi d by Council Secretary By: Approved by Mayor: Date Byc 1,500.00 25.00 10.00 5.00 30.00 5.00 30.00 7.00 42.00 200.00 200.00 �ction 2 force thirty (30) days following its passage, , �'�--- GZ.n_.. quest pastment of: � By: Form Approved by City tox i By: ' f I) Approved �ji � for mi By: to Council OFFICE OF LIFsP Date.: GREEN SHEET Robert Kessler February 23 1999 266-9112 No . 64865 � 1 EPAR'fFffiNT DIRHCII�R 4 ZTY �UNCIL y � 'Z ITY ATNRNSY STY CLERR x�swe ust be on Council Ag2nda by: �^'° DI'�cmx Ix. & �ncT. 5"c. DIR. � S'�J 3 YOR (OR ASSISTANf) OTAL # OF SIGNATIIRE PAGSS 1 (CLIP ALL LOCATIONS FOR SIGNATURE) CTION REQUESTED: ordinance to amend Saint Paul Legislative Code Chapter 344; citing the fee for the pawn shop initial investigation fee to Chapter 310 COMMENDATIONS: APPROVE (A) OA AEJECI' (R) SRSOtAL SSR4IC8 CONTRACl3 MIJST ANSNBA THB POLIA9iINGs PLANNING COM1II9ISSION CIVIL SHRVICE CONASISSION 1. Has Che person/fiYm ever worked under a contract for this department? CIB COT4iI1TEE _ HUSINESS REVIEW CVUNCIL YSS NO STAFF _ Has this peraonjPixm eves been a City employee? ' DISIRICT COURT _ YSS NO 3. Does this pezaonJEixm possess a skill not nozmally possessed by any UPPORTS wHICf1 COUNCIL OSJECTIVE? Current City employee? Y£S NO laia all Y85 aaswers oa a aepazate sheat aad aGtach. INITIATING PROBLEM, ISSUE, OPPORTUNITY (Who, What, When, Where, Why): Currently, the initial investigation fee for pawn shops is cited in both Chapters 344 and 310. This may lead to an inconsistency in the future when issuing"the license. Having one point of reference for the initial investigation fee will eliminate any discrepancy for the cost of the initial, investigation. VANTAGES IF APPROVED: There will be a single point of reference for the pawn shop initial investigation fee. ,,, ISADVAI3TAGES IF APPROVED: -°�' =` `'� """" " one apparentr. ` �<fi� �, � �9�� ; s,�;;: ISADVANTAGES IF NOT APPROVED: he pawn shop initial investigation fee will be cited in both Chapters 344 and 310 which may lead to inconsistent fees being charged for the license. TOTAL AMOUNT OF TRANSACTION S COST/REVENUE BUDGETED YES NO FUNDING SOURCE ACTIVITY NUMBER FINANCIAL INFORMATION: (EXPLAIN) r Automated Pawn SystemsTM History and Rate Increase Report Prepared by Lieutenant 3. Neuberger Vice/ Automated Pawn Systems Unit Commander 9� aa� , Egecufive Summarq Automated Pawn SystemsTM (APS) came into e�stence in late 1996 in a joint program with Minneapolis police. The system is a computerized database that allows for the swift retrieval of pawnshop transactions. This data is crucial to monitor shop activity and to identify and recover stolen property. When the system was developed Minneapolis and St. Paul agreed on a standazd user fee to offset e�enses and to offer a level playing field for both Minneapolis and St Paul pawnshops. This fee of $1.50 is paid by the person pawning the item, the goal being zero expense for the agencies using the system. Due to many factors outlined in this report, the cunent user fee is inadequate to support administrative and enforcement costs to the Saint Paul Police Department. A rate increase of .50¢ per billable transaction is being requested. Biliable uansaction fees wouid increase from $1.50 to $2.00 per transaction. ��-�a� Without the increase the APS system in St Paul will have to be closed. This would have a tremendous impact in the departments ability to recover stolen properties ($30,000.00 in 1998), identify criminals and to monitor pawnshop transactions. It would £orce the Department to return the paper receipt system used prior to the implementarion of AP5. Background Police departments across the countty have historically regulated and monitored pawnshop activities. Pawnshops have been an outlet for stolen or questionable properties as long as they have been in business. Aowever, they also fill a gap in the financial community. Many low to middle income citizens use pawnshops as a"poor man's banb", pawning items for a short-term loan. Where the typical investment institurion such as banks and credit companies wouid not issue loans or credit, pawnbrokers, also known as collateral loan brokers, make loans based purely on the intrinsic value of the collateral. Checking the customer's credit history is not necessary because only the value of the item being pawned is considered. If the loan, or at least the interest, is not paid off during the specified term (usually three or four months), the item is forfeited and may be resold by the broker. A typical transaction begins with a potential borrower coming into a pawnshop with the item he or she wants to pledge. The pawnbroker then detemunes how much to loan the patron for the item. Loans aze paid out at a rate of about one-third to one-half of the price the broker can expect to receive for the sale of an item during the worst of times. This assures that a profit will be made. Pawning has long been a source of capital for people in times of need, as well as a means of financing business ventures. Current surveys show that middle and upper class family's are using pawnshops on an increasing basis. Today, statutory regulations of banking and finance are based on the legal foundation established by pawnbrokers. Many of the first leaders in the banking industry had roots in pawnbrokering. As was the case 3,000 years ago, pawnshops continue to be a source of convenient credit for individuals in need of a short-term loan. Automated Pawn SystemsTM Prior to the implementation of APS in mid 1996, Pawnshop employees were required to complete a pager receipt for any pawned items and to forward a copy of the receipt to the police department. This system was cumbersome and tracking and retrieval of specific pawned items was difficult. Analysis of trends and unusual pawn activity was all but impossible. In 1995 Saim Paul and Minneapolis Police agreed that there had to be a better way to monitor pawnshop activities, the goat being to ensure compliance with regulations regazding pawned items, to identify stolen or evidentiary property in a quick and effective manner and to chart trends. Both agencies and Saint Paul License, Inspection and Enviormental Protection office agreed to jointly participate in a project to develop and implement the electronic monitoring of pawnshop transactions, allowing police a vehicle to conduct thorough inspection and analysis of pawned items. Mmneapolis PolicelLicensing agreed to take the lead in development of the hardware and software necessary to make the system work. ��-a �� ��-� � The contractual agreement identified the Minneapolis Police as the provider of the system. Saint Paul Police was given unlimited access to APS inquires and to act as a "sub-seroer" should APS grow into a metro wide program. Both Minneapolis and Saint Paul by ordinance adopted APS and required all pawnshops to participate in the program. The initial purchase of soflwaze, hardware and development costs were underwritten by the City of Minneapolis. With the understanding that Minneapolis Police developmern costs would be recovered by payment of $1.00 from every $1.50 transaction fee paid to the City of Saint Paul. Continuing upkeep of the system is also supported by this user fee. Saint Paul Police agreed to ttris process, as it appeazed to be a revenue neutral operation for the police department. The fees generated by the system was intended to pay for enforcement and administrative expenses incurred by the Saint Paul Police department. As the loan, underwritten by the City of Minneapolis is amortized, the $1.00 fee paid to M'inneapolis is to be adjusted (down) to reflect actual costs. It is projected the first decrease is at a minimum four years away. Prior to the implementation of APS the City of Saint Paul received an estimated 65,000 to 70,000 receipts for pawned items, per year. This would have generated approacimately $98,000.00 in gross income. After APS was hu on in 1997 this number dropped to 47,000 transactions or appro�mately $70,500.00 gross income, the first full calendar yeaz APS operated. This decrease may be due to several circumstances. ❑ Reduced criminal activity as a result of the increased inspection and tracking of pawned items. n Pawnshops reevaluated the practices of issuing loans for very inexpensive items and thereby reducing the total number items pawned at a given shop. ❑ Multiple items were allowed on each billable transaction resulting in a single user fee of $1.50 for the entire transaction. All three factors contributed to less than projected revenues, resulting in a negative cash flow for 1997 —1998, 1998 —1999. 1997 & 19981ncome vs Expenses p 1998 Income p1998 Expenses 1997 Income �1997 Expenses 0 50000 100000 9y-a� G�rrently the Saint Paul APS Unit is staffed by two FTE's. One swom sergeant investigator and one non-swom jurisdictional administrator. The sergeant handles investigations, compliance checks, and background investigations of new shop personnel, assists Saint Paul Police personnel and Out of city agencies in investigations and duties as needed by the program. The sworn personnePs salary is provided by police department funds. The jurisdiction administrator's duties include systems management, data input, daily coaespondence with shops and Minneapolis Police, accounts payable and receivable and other duties as needed or assigned. This position is funded solely through APS revenues as are operating e�enses. Table 1 outlines 1997 and 1998's APS performance and emphasizes the need for a rate increase. Table 2 illustrates the positive effect of the requested increase. Table 1 Table Z Projected revenue based on fhe requested $2.00 per transaction fee �tq-��t3 � From: Christ+ne Rozek To: CCounciLCOUNCIL.danb, CCouncil.COUNCIL.scoitr, CC... Date: 5/20l99 1:14pm Su6ject: Ordinance Amendment Increasing the Automated Pawn Transaction Fee SPPD, LIEP, and the pawn industry respecifully request the withdrawal of Ordinance 99-273. This ordinance revision would have increased the billable transaction fiee fior pawn owners, and has been laid over for final adoption to June 2. The three parties are working together to find a solution other than an increase of fees to cover the enforcement costs. Please let me know if you have any further questions. Thanks. ORIGINAL ,�� ���°� �..�-°-, � �-, � ���� ORDINANCE CITY OF SAINT PAUL, MINNESOTA Presented By Refened To Committee Date : An ordinance amending Saint Paul Legislative Code to increase the Automated Pawn System Billable Trt to reflect enforcement costs THE COUNCIL OF THE CITY OF SAINT PAUL DOES Section 1 Section 310.18 of the Saint Paul Legislative Code is Sec. 310.18. License fee schedule. CouncilFile# �� -a`�3 Ordinance # Green Sheet # � �O� 310 Fee amended to read as follows: Notwithstanding the provision of any er ordinance or law to the contrary, the following fees are hereby provided for a11 licenses listed herein. These fees supersede all inconsistent provisions, including, but not nnited to, graduated fee provisions, in these chapters and in other ordinances and laws, and ' ude the fee for the license application as part of the license fee; provided, however, that ' section does not amend or modify sections 310.09(a) or 310.09(d) of the Legislative Code � respect to exempt organizations or late fees. Pursuant to section 310.09(b) of the Legislativ Code, these schedules shall be posted in the office of the Director of the Office of Licens Inspections and Environmental Protection. These fees shall be effective for license renewals d new license applications occurring on and after January 1, 1995, or on tha effective dat of this section, whichever is Iater; provided, however, that with respect to all license whos renewal dates occur a8er the effective date of this new schedule, there shall be no increas in, nor offsets or refunds of, the existing fees paid, or due and owing. �** (� EI�F"ORCEMENT LEVEL 6 32 Chapter/Section 1Vo. Lieense Description Fee 33 127 Courtesy Benches $ 20.00 �>-� �3 2 � 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 167 Commerciai Vehicle - 18.00 Replacement 225.08 Firearms 317.00 278 Gambling Hall 354.00 318 MAD Operation with up to 583.00 10 Each MAD overl0 42.00 Music Machine 44.00 Amusement Rides to 10 301.00 Amusement Rides over 10 28_00 T.V. Units per location 28.OQ 331.05 Used Equipment Review Fee 4 0 341 Single Service Container 445.00 344 Pawn Shops --�;§8A:89 License Fee 1 0• 00•QO �nitial Tnvestigation Fee 1.500.00 Billable Transaction Fee �.00 345 Transient Merchant 65.00 3'76.16 Taa;icab Driver Rene al 21.00 Taacicab Driver Du icate 6.00 Taxicab Duplica Plate 16.00 391 Soliciting F s- Tag Days 21.00 401 Secondhan Dealer Motor 87.00 Vehicle P s - second locati 402 Tem orary Gambling (3 21.00 es) 403 ingo Halls 174.00 409.24(1) Gambling Manager 66.00 409A5(i) Gambling Location - A 66.00 Gambling Location - B 66.00 Gambling Location - C 66.00 409.04(g}(5) Modification of Pazking 375.00 357.03 Solid Waste Transfer Station 1,500.00 408 Recycling Processing Center 750.00 414 Massage Therapy-Practical 50.00 Examination Fee Massage Therapy-Written 20.00 Examination C/�l- � 7�.3 1 I 429 2 3 4 5 6 7 8 9 10 11 12 198 200.03 200.05 200.08 Infectious Waste Processing Facility Keeping of Animal-Renewal Dog License Dog License - Senior Citizen Dog License - Lifetime (with Microchip) Dog License - Senior Citizen, Lifetime (with Microchip) Dog License - Duplicate Impounding Fee Boazding Fee - Per Day Animal Adoption - St. Pau1 Resident Animal Adoption - Nonresident Animal-Institutional Reseazch Use This ardinance shall take effect and be approval and publication. Adopted by Council Date Adoption Certifi d by Council Secretary By: Approved by Mayor: Date Byc 1,500.00 25.00 10.00 5.00 30.00 5.00 30.00 7.00 42.00 200.00 200.00 �ction 2 force thirty (30) days following its passage, , �'�--- GZ.n_.. quest pastment of: � By: Form Approved by City tox i By: ' f I) Approved �ji � for mi By: to Council OFFICE OF LIFsP Date.: GREEN SHEET Robert Kessler February 23 1999 266-9112 No . 64865 � 1 EPAR'fFffiNT DIRHCII�R 4 ZTY �UNCIL y � 'Z ITY ATNRNSY STY CLERR x�swe ust be on Council Ag2nda by: �^'° DI'�cmx Ix. & �ncT. 5"c. DIR. � S'�J 3 YOR (OR ASSISTANf) OTAL # OF SIGNATIIRE PAGSS 1 (CLIP ALL LOCATIONS FOR SIGNATURE) CTION REQUESTED: ordinance to amend Saint Paul Legislative Code Chapter 344; citing the fee for the pawn shop initial investigation fee to Chapter 310 COMMENDATIONS: APPROVE (A) OA AEJECI' (R) SRSOtAL SSR4IC8 CONTRACl3 MIJST ANSNBA THB POLIA9iINGs PLANNING COM1II9ISSION CIVIL SHRVICE CONASISSION 1. Has Che person/fiYm ever worked under a contract for this department? CIB COT4iI1TEE _ HUSINESS REVIEW CVUNCIL YSS NO STAFF _ Has this peraonjPixm eves been a City employee? ' DISIRICT COURT _ YSS NO 3. Does this pezaonJEixm possess a skill not nozmally possessed by any UPPORTS wHICf1 COUNCIL OSJECTIVE? Current City employee? Y£S NO laia all Y85 aaswers oa a aepazate sheat aad aGtach. INITIATING PROBLEM, ISSUE, OPPORTUNITY (Who, What, When, Where, Why): Currently, the initial investigation fee for pawn shops is cited in both Chapters 344 and 310. This may lead to an inconsistency in the future when issuing"the license. Having one point of reference for the initial investigation fee will eliminate any discrepancy for the cost of the initial, investigation. VANTAGES IF APPROVED: There will be a single point of reference for the pawn shop initial investigation fee. ,,, ISADVAI3TAGES IF APPROVED: -°�' =` `'� """" " one apparentr. ` �<fi� �, � �9�� ; s,�;;: ISADVANTAGES IF NOT APPROVED: he pawn shop initial investigation fee will be cited in both Chapters 344 and 310 which may lead to inconsistent fees being charged for the license. TOTAL AMOUNT OF TRANSACTION S COST/REVENUE BUDGETED YES NO FUNDING SOURCE ACTIVITY NUMBER FINANCIAL INFORMATION: (EXPLAIN) r Automated Pawn SystemsTM History and Rate Increase Report Prepared by Lieutenant 3. Neuberger Vice/ Automated Pawn Systems Unit Commander 9� aa� , Egecufive Summarq Automated Pawn SystemsTM (APS) came into e�stence in late 1996 in a joint program with Minneapolis police. The system is a computerized database that allows for the swift retrieval of pawnshop transactions. This data is crucial to monitor shop activity and to identify and recover stolen property. When the system was developed Minneapolis and St. Paul agreed on a standazd user fee to offset e�enses and to offer a level playing field for both Minneapolis and St Paul pawnshops. This fee of $1.50 is paid by the person pawning the item, the goal being zero expense for the agencies using the system. Due to many factors outlined in this report, the cunent user fee is inadequate to support administrative and enforcement costs to the Saint Paul Police Department. A rate increase of .50¢ per billable transaction is being requested. Biliable uansaction fees wouid increase from $1.50 to $2.00 per transaction. ��-�a� Without the increase the APS system in St Paul will have to be closed. This would have a tremendous impact in the departments ability to recover stolen properties ($30,000.00 in 1998), identify criminals and to monitor pawnshop transactions. It would £orce the Department to return the paper receipt system used prior to the implementarion of AP5. Background Police departments across the countty have historically regulated and monitored pawnshop activities. Pawnshops have been an outlet for stolen or questionable properties as long as they have been in business. Aowever, they also fill a gap in the financial community. Many low to middle income citizens use pawnshops as a"poor man's banb", pawning items for a short-term loan. Where the typical investment institurion such as banks and credit companies wouid not issue loans or credit, pawnbrokers, also known as collateral loan brokers, make loans based purely on the intrinsic value of the collateral. Checking the customer's credit history is not necessary because only the value of the item being pawned is considered. If the loan, or at least the interest, is not paid off during the specified term (usually three or four months), the item is forfeited and may be resold by the broker. A typical transaction begins with a potential borrower coming into a pawnshop with the item he or she wants to pledge. The pawnbroker then detemunes how much to loan the patron for the item. Loans aze paid out at a rate of about one-third to one-half of the price the broker can expect to receive for the sale of an item during the worst of times. This assures that a profit will be made. Pawning has long been a source of capital for people in times of need, as well as a means of financing business ventures. Current surveys show that middle and upper class family's are using pawnshops on an increasing basis. Today, statutory regulations of banking and finance are based on the legal foundation established by pawnbrokers. Many of the first leaders in the banking industry had roots in pawnbrokering. As was the case 3,000 years ago, pawnshops continue to be a source of convenient credit for individuals in need of a short-term loan. Automated Pawn SystemsTM Prior to the implementation of APS in mid 1996, Pawnshop employees were required to complete a pager receipt for any pawned items and to forward a copy of the receipt to the police department. This system was cumbersome and tracking and retrieval of specific pawned items was difficult. Analysis of trends and unusual pawn activity was all but impossible. In 1995 Saim Paul and Minneapolis Police agreed that there had to be a better way to monitor pawnshop activities, the goat being to ensure compliance with regulations regazding pawned items, to identify stolen or evidentiary property in a quick and effective manner and to chart trends. Both agencies and Saint Paul License, Inspection and Enviormental Protection office agreed to jointly participate in a project to develop and implement the electronic monitoring of pawnshop transactions, allowing police a vehicle to conduct thorough inspection and analysis of pawned items. Mmneapolis PolicelLicensing agreed to take the lead in development of the hardware and software necessary to make the system work. ��-a �� ��-� � The contractual agreement identified the Minneapolis Police as the provider of the system. Saint Paul Police was given unlimited access to APS inquires and to act as a "sub-seroer" should APS grow into a metro wide program. Both Minneapolis and Saint Paul by ordinance adopted APS and required all pawnshops to participate in the program. The initial purchase of soflwaze, hardware and development costs were underwritten by the City of Minneapolis. With the understanding that Minneapolis Police developmern costs would be recovered by payment of $1.00 from every $1.50 transaction fee paid to the City of Saint Paul. Continuing upkeep of the system is also supported by this user fee. Saint Paul Police agreed to ttris process, as it appeazed to be a revenue neutral operation for the police department. The fees generated by the system was intended to pay for enforcement and administrative expenses incurred by the Saint Paul Police department. As the loan, underwritten by the City of Minneapolis is amortized, the $1.00 fee paid to M'inneapolis is to be adjusted (down) to reflect actual costs. It is projected the first decrease is at a minimum four years away. Prior to the implementation of APS the City of Saint Paul received an estimated 65,000 to 70,000 receipts for pawned items, per year. This would have generated approacimately $98,000.00 in gross income. After APS was hu on in 1997 this number dropped to 47,000 transactions or appro�mately $70,500.00 gross income, the first full calendar yeaz APS operated. This decrease may be due to several circumstances. ❑ Reduced criminal activity as a result of the increased inspection and tracking of pawned items. n Pawnshops reevaluated the practices of issuing loans for very inexpensive items and thereby reducing the total number items pawned at a given shop. ❑ Multiple items were allowed on each billable transaction resulting in a single user fee of $1.50 for the entire transaction. All three factors contributed to less than projected revenues, resulting in a negative cash flow for 1997 —1998, 1998 —1999. 1997 & 19981ncome vs Expenses p 1998 Income p1998 Expenses 1997 Income �1997 Expenses 0 50000 100000 9y-a� G�rrently the Saint Paul APS Unit is staffed by two FTE's. One swom sergeant investigator and one non-swom jurisdictional administrator. The sergeant handles investigations, compliance checks, and background investigations of new shop personnel, assists Saint Paul Police personnel and Out of city agencies in investigations and duties as needed by the program. The sworn personnePs salary is provided by police department funds. The jurisdiction administrator's duties include systems management, data input, daily coaespondence with shops and Minneapolis Police, accounts payable and receivable and other duties as needed or assigned. This position is funded solely through APS revenues as are operating e�enses. Table 1 outlines 1997 and 1998's APS performance and emphasizes the need for a rate increase. Table 2 illustrates the positive effect of the requested increase. Table 1 Table Z Projected revenue based on fhe requested $2.00 per transaction fee �tq-��t3 � From: Christ+ne Rozek To: CCounciLCOUNCIL.danb, CCouncil.COUNCIL.scoitr, CC... Date: 5/20l99 1:14pm Su6ject: Ordinance Amendment Increasing the Automated Pawn Transaction Fee SPPD, LIEP, and the pawn industry respecifully request the withdrawal of Ordinance 99-273. This ordinance revision would have increased the billable transaction fiee fior pawn owners, and has been laid over for final adoption to June 2. The three parties are working together to find a solution other than an increase of fees to cover the enforcement costs. Please let me know if you have any further questions. Thanks. ORIGINAL ,�� ���°� �..�-°-, � �-, � ���� ORDINANCE CITY OF SAINT PAUL, MINNESOTA Presented By Refened To Committee Date : An ordinance amending Saint Paul Legislative Code to increase the Automated Pawn System Billable Trt to reflect enforcement costs THE COUNCIL OF THE CITY OF SAINT PAUL DOES Section 1 Section 310.18 of the Saint Paul Legislative Code is Sec. 310.18. License fee schedule. CouncilFile# �� -a`�3 Ordinance # Green Sheet # � �O� 310 Fee amended to read as follows: Notwithstanding the provision of any er ordinance or law to the contrary, the following fees are hereby provided for a11 licenses listed herein. These fees supersede all inconsistent provisions, including, but not nnited to, graduated fee provisions, in these chapters and in other ordinances and laws, and ' ude the fee for the license application as part of the license fee; provided, however, that ' section does not amend or modify sections 310.09(a) or 310.09(d) of the Legislative Code � respect to exempt organizations or late fees. Pursuant to section 310.09(b) of the Legislativ Code, these schedules shall be posted in the office of the Director of the Office of Licens Inspections and Environmental Protection. These fees shall be effective for license renewals d new license applications occurring on and after January 1, 1995, or on tha effective dat of this section, whichever is Iater; provided, however, that with respect to all license whos renewal dates occur a8er the effective date of this new schedule, there shall be no increas in, nor offsets or refunds of, the existing fees paid, or due and owing. �** (� EI�F"ORCEMENT LEVEL 6 32 Chapter/Section 1Vo. Lieense Description Fee 33 127 Courtesy Benches $ 20.00 �>-� �3 2 � 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 167 Commerciai Vehicle - 18.00 Replacement 225.08 Firearms 317.00 278 Gambling Hall 354.00 318 MAD Operation with up to 583.00 10 Each MAD overl0 42.00 Music Machine 44.00 Amusement Rides to 10 301.00 Amusement Rides over 10 28_00 T.V. Units per location 28.OQ 331.05 Used Equipment Review Fee 4 0 341 Single Service Container 445.00 344 Pawn Shops --�;§8A:89 License Fee 1 0• 00•QO �nitial Tnvestigation Fee 1.500.00 Billable Transaction Fee �.00 345 Transient Merchant 65.00 3'76.16 Taa;icab Driver Rene al 21.00 Taacicab Driver Du icate 6.00 Taxicab Duplica Plate 16.00 391 Soliciting F s- Tag Days 21.00 401 Secondhan Dealer Motor 87.00 Vehicle P s - second locati 402 Tem orary Gambling (3 21.00 es) 403 ingo Halls 174.00 409.24(1) Gambling Manager 66.00 409A5(i) Gambling Location - A 66.00 Gambling Location - B 66.00 Gambling Location - C 66.00 409.04(g}(5) Modification of Pazking 375.00 357.03 Solid Waste Transfer Station 1,500.00 408 Recycling Processing Center 750.00 414 Massage Therapy-Practical 50.00 Examination Fee Massage Therapy-Written 20.00 Examination C/�l- � 7�.3 1 I 429 2 3 4 5 6 7 8 9 10 11 12 198 200.03 200.05 200.08 Infectious Waste Processing Facility Keeping of Animal-Renewal Dog License Dog License - Senior Citizen Dog License - Lifetime (with Microchip) Dog License - Senior Citizen, Lifetime (with Microchip) Dog License - Duplicate Impounding Fee Boazding Fee - Per Day Animal Adoption - St. Pau1 Resident Animal Adoption - Nonresident Animal-Institutional Reseazch Use This ardinance shall take effect and be approval and publication. Adopted by Council Date Adoption Certifi d by Council Secretary By: Approved by Mayor: Date Byc 1,500.00 25.00 10.00 5.00 30.00 5.00 30.00 7.00 42.00 200.00 200.00 �ction 2 force thirty (30) days following its passage, , �'�--- GZ.n_.. quest pastment of: � By: Form Approved by City tox i By: ' f I) Approved �ji � for mi By: to Council OFFICE OF LIFsP Date.: GREEN SHEET Robert Kessler February 23 1999 266-9112 No . 64865 � 1 EPAR'fFffiNT DIRHCII�R 4 ZTY �UNCIL y � 'Z ITY ATNRNSY STY CLERR x�swe ust be on Council Ag2nda by: �^'° DI'�cmx Ix. & �ncT. 5"c. DIR. � S'�J 3 YOR (OR ASSISTANf) OTAL # OF SIGNATIIRE PAGSS 1 (CLIP ALL LOCATIONS FOR SIGNATURE) CTION REQUESTED: ordinance to amend Saint Paul Legislative Code Chapter 344; citing the fee for the pawn shop initial investigation fee to Chapter 310 COMMENDATIONS: APPROVE (A) OA AEJECI' (R) SRSOtAL SSR4IC8 CONTRACl3 MIJST ANSNBA THB POLIA9iINGs PLANNING COM1II9ISSION CIVIL SHRVICE CONASISSION 1. Has Che person/fiYm ever worked under a contract for this department? CIB COT4iI1TEE _ HUSINESS REVIEW CVUNCIL YSS NO STAFF _ Has this peraonjPixm eves been a City employee? ' DISIRICT COURT _ YSS NO 3. Does this pezaonJEixm possess a skill not nozmally possessed by any UPPORTS wHICf1 COUNCIL OSJECTIVE? Current City employee? Y£S NO laia all Y85 aaswers oa a aepazate sheat aad aGtach. INITIATING PROBLEM, ISSUE, OPPORTUNITY (Who, What, When, Where, Why): Currently, the initial investigation fee for pawn shops is cited in both Chapters 344 and 310. This may lead to an inconsistency in the future when issuing"the license. Having one point of reference for the initial investigation fee will eliminate any discrepancy for the cost of the initial, investigation. VANTAGES IF APPROVED: There will be a single point of reference for the pawn shop initial investigation fee. ,,, ISADVAI3TAGES IF APPROVED: -°�' =` `'� """" " one apparentr. ` �<fi� �, � �9�� ; s,�;;: ISADVANTAGES IF NOT APPROVED: he pawn shop initial investigation fee will be cited in both Chapters 344 and 310 which may lead to inconsistent fees being charged for the license. TOTAL AMOUNT OF TRANSACTION S COST/REVENUE BUDGETED YES NO FUNDING SOURCE ACTIVITY NUMBER FINANCIAL INFORMATION: (EXPLAIN) r Automated Pawn SystemsTM History and Rate Increase Report Prepared by Lieutenant 3. Neuberger Vice/ Automated Pawn Systems Unit Commander 9� aa� , Egecufive Summarq Automated Pawn SystemsTM (APS) came into e�stence in late 1996 in a joint program with Minneapolis police. The system is a computerized database that allows for the swift retrieval of pawnshop transactions. This data is crucial to monitor shop activity and to identify and recover stolen property. When the system was developed Minneapolis and St. Paul agreed on a standazd user fee to offset e�enses and to offer a level playing field for both Minneapolis and St Paul pawnshops. This fee of $1.50 is paid by the person pawning the item, the goal being zero expense for the agencies using the system. Due to many factors outlined in this report, the cunent user fee is inadequate to support administrative and enforcement costs to the Saint Paul Police Department. A rate increase of .50¢ per billable transaction is being requested. Biliable uansaction fees wouid increase from $1.50 to $2.00 per transaction. ��-�a� Without the increase the APS system in St Paul will have to be closed. This would have a tremendous impact in the departments ability to recover stolen properties ($30,000.00 in 1998), identify criminals and to monitor pawnshop transactions. It would £orce the Department to return the paper receipt system used prior to the implementarion of AP5. Background Police departments across the countty have historically regulated and monitored pawnshop activities. Pawnshops have been an outlet for stolen or questionable properties as long as they have been in business. Aowever, they also fill a gap in the financial community. Many low to middle income citizens use pawnshops as a"poor man's banb", pawning items for a short-term loan. Where the typical investment institurion such as banks and credit companies wouid not issue loans or credit, pawnbrokers, also known as collateral loan brokers, make loans based purely on the intrinsic value of the collateral. Checking the customer's credit history is not necessary because only the value of the item being pawned is considered. If the loan, or at least the interest, is not paid off during the specified term (usually three or four months), the item is forfeited and may be resold by the broker. A typical transaction begins with a potential borrower coming into a pawnshop with the item he or she wants to pledge. The pawnbroker then detemunes how much to loan the patron for the item. Loans aze paid out at a rate of about one-third to one-half of the price the broker can expect to receive for the sale of an item during the worst of times. This assures that a profit will be made. Pawning has long been a source of capital for people in times of need, as well as a means of financing business ventures. Current surveys show that middle and upper class family's are using pawnshops on an increasing basis. Today, statutory regulations of banking and finance are based on the legal foundation established by pawnbrokers. Many of the first leaders in the banking industry had roots in pawnbrokering. As was the case 3,000 years ago, pawnshops continue to be a source of convenient credit for individuals in need of a short-term loan. Automated Pawn SystemsTM Prior to the implementation of APS in mid 1996, Pawnshop employees were required to complete a pager receipt for any pawned items and to forward a copy of the receipt to the police department. This system was cumbersome and tracking and retrieval of specific pawned items was difficult. Analysis of trends and unusual pawn activity was all but impossible. In 1995 Saim Paul and Minneapolis Police agreed that there had to be a better way to monitor pawnshop activities, the goat being to ensure compliance with regulations regazding pawned items, to identify stolen or evidentiary property in a quick and effective manner and to chart trends. Both agencies and Saint Paul License, Inspection and Enviormental Protection office agreed to jointly participate in a project to develop and implement the electronic monitoring of pawnshop transactions, allowing police a vehicle to conduct thorough inspection and analysis of pawned items. Mmneapolis PolicelLicensing agreed to take the lead in development of the hardware and software necessary to make the system work. ��-a �� ��-� � The contractual agreement identified the Minneapolis Police as the provider of the system. Saint Paul Police was given unlimited access to APS inquires and to act as a "sub-seroer" should APS grow into a metro wide program. Both Minneapolis and Saint Paul by ordinance adopted APS and required all pawnshops to participate in the program. The initial purchase of soflwaze, hardware and development costs were underwritten by the City of Minneapolis. With the understanding that Minneapolis Police developmern costs would be recovered by payment of $1.00 from every $1.50 transaction fee paid to the City of Saint Paul. Continuing upkeep of the system is also supported by this user fee. Saint Paul Police agreed to ttris process, as it appeazed to be a revenue neutral operation for the police department. The fees generated by the system was intended to pay for enforcement and administrative expenses incurred by the Saint Paul Police department. As the loan, underwritten by the City of Minneapolis is amortized, the $1.00 fee paid to M'inneapolis is to be adjusted (down) to reflect actual costs. It is projected the first decrease is at a minimum four years away. Prior to the implementation of APS the City of Saint Paul received an estimated 65,000 to 70,000 receipts for pawned items, per year. This would have generated approacimately $98,000.00 in gross income. After APS was hu on in 1997 this number dropped to 47,000 transactions or appro�mately $70,500.00 gross income, the first full calendar yeaz APS operated. This decrease may be due to several circumstances. ❑ Reduced criminal activity as a result of the increased inspection and tracking of pawned items. n Pawnshops reevaluated the practices of issuing loans for very inexpensive items and thereby reducing the total number items pawned at a given shop. ❑ Multiple items were allowed on each billable transaction resulting in a single user fee of $1.50 for the entire transaction. All three factors contributed to less than projected revenues, resulting in a negative cash flow for 1997 —1998, 1998 —1999. 1997 & 19981ncome vs Expenses p 1998 Income p1998 Expenses 1997 Income �1997 Expenses 0 50000 100000 9y-a� G�rrently the Saint Paul APS Unit is staffed by two FTE's. One swom sergeant investigator and one non-swom jurisdictional administrator. The sergeant handles investigations, compliance checks, and background investigations of new shop personnel, assists Saint Paul Police personnel and Out of city agencies in investigations and duties as needed by the program. The sworn personnePs salary is provided by police department funds. The jurisdiction administrator's duties include systems management, data input, daily coaespondence with shops and Minneapolis Police, accounts payable and receivable and other duties as needed or assigned. This position is funded solely through APS revenues as are operating e�enses. Table 1 outlines 1997 and 1998's APS performance and emphasizes the need for a rate increase. Table 2 illustrates the positive effect of the requested increase. Table 1 Table Z Projected revenue based on fhe requested $2.00 per transaction fee �tq-��t3 � From: Christ+ne Rozek To: CCounciLCOUNCIL.danb, CCouncil.COUNCIL.scoitr, CC... Date: 5/20l99 1:14pm Su6ject: Ordinance Amendment Increasing the Automated Pawn Transaction Fee SPPD, LIEP, and the pawn industry respecifully request the withdrawal of Ordinance 99-273. This ordinance revision would have increased the billable transaction fiee fior pawn owners, and has been laid over for final adoption to June 2. The three parties are working together to find a solution other than an increase of fees to cover the enforcement costs. Please let me know if you have any further questions. Thanks.