Item 2: Ordinance on Used Merchandise Dealer Provisions

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The following changes are proposed to align the City’s regulations with state regulations: Section 4.989 (1) Adds definition of pawnbroker, pledge, and precious metal. - Section 4.989 (3) Adds provisions for additional information that should be recorded when - items are purchased, and requires a photo be taken for all jewelry, gems and precious metals. Section 4.989 (7b) Adds requirement that if the Police notify the used merchandise dealer that - jewelry is suspected of being stolen, the dealer cannot alter the piece. The following changes are proposed which will strengthen the City’s regulations and increase the likelihood of returning stolen property: Section 4.989 (2) Adds language which prohibits someone from owning or operating a used - merchandise business if they have been convicted for burglary, theft I, manufacture of a controlled substance, or drug possession Section 4.989 (7a) Increases the amount of time that regulated property must be held from the - time of purchase, from seven to 14 days. Section 4.89 (10b) Adds provision that if used merchandise dealer has repeatedly and - substantively violated the regulations related to used merchandise dealers, the City Manager may initiate judicial proceedings for injunctive relief to prohibit the person from acting as used merchandise dealer, and to prohibit purchase and sale from that location. Section 4.990 (10a) Increase the maximum fine for first violations up to $500 from $360. - Section 4.990 (10b) Increases the maximum fine after three previous similar convictions up to - $1,500, from $360. Section 4.990 (10c) Increases the maximum fine after six previous similar convictions up to - $3,000, from $360. Section 4.990 (10f) Specifies that violation of the rules related to this ordinance is subject to - the penalties. Of the changes proposed, one change which may receive significant community comment increases the amount of time property is held from seven to 14 days. This change is requested to allow law enforcement more time to determine if the property is the subject of a theft or burglary. This delay will increase the likelihood stolen property can be recovered if the crime isn’t immediately reported; often, victims don’t have a complete list of stolen property at the time the report is taken, so supplemental reports are provided by the victim. This proposed change will have an impact on used merchandise dealers because they will need additional storage space for items on hold, and it will increase their need for working capital, as assets are required to be held longer. Another change that may generate complaints is the recommendation to regulate who can own or operate as a used merchandise dealer. Because this proposal is intended to curb the intentional or unintentional trafficking of stolen merchandise, the recommendation is to prohibit people convicted of some felony drug offenses and felony property crimes from owning or operating a used merchandise business. For these regulations, a used merchandise business is strictly defined as a business which purchases or lends money on property which is “regulated,” or property with a higher likelihood of being stolen property. The recommended change prohibits certain convicted felons from operating a business which is frequently used to commit property felonies. S:\CMO\2012 Council Agendas\M121119\S1211192.doc