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HomeMy WebLinkAboutItem B: Ordinance Concerning Used Merchandise Dealers ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Work Session: An Ordinance Concerning Used Merchandise Dealers, and Amending Sections 4.989 and 4.990 of the Eugene Code, 1971 Meeting Date: January 11, 2006 Agenda Item Number: B Department: Eugene Police Staff Contact: Jean Stronach www.eugene-or.gov Contact Telephone Number: 682-5492 ISSUE STATEMENT This is a work session for the council to discuss the proposed ordinance concerning Used Merchandise Dealers. The ordinance would amend sections 4.989 and 4.990 of the Eugene Code 1971, to establish an electronic reporting system for used merchandise dealers, establish a fee structure for maintenance of the electronic system and clarify the types of items that would be subject to mandatory reporting. BACKGROUND The City of Eugene’s current Used Merchandise Dealer Ordinance was adopted in 1996. Since that time, Eugene, Springfield and unincorporated Lane County have experienced an explosion of property crimes which show no evidence of slowing. Updating the Used Merchandise Dealers Ordinance has emerged as an important strategy for law enforcement to identify the repeat criminals involved in these thefts and create a better mechanism for returning stolen items to the lawful owners. The proposed ordinance builds on the existing Eugene Code by modernizing the system to establish electronic reporting which will provide law enforcement with ‘real time’ data on sales that can then be matched to lists of stolen property. Eugene Police Department (EPD) employees have enforced the current ordinance, distributing and collecting secondhand dealer reports, identifying and recovering stolen property sold or consigned to secondhand stores, and conducting investigations of individuals selling or consigning stolen property. Lane County and Springfield each have their own ordinance which regulates secondhand dealers within their jurisdictions. However, due to the Sheriff’s staffing shortages, the County is currently unable to track secondhand dealers’ transactions. All jurisdictions in this region share the growing problem of burglaries and theft, most of which are directly linked to the region’s drug problems. Eugene’s two property crime investigators and one civilian data entry employee collect, regulate, and perform data entry functions for approximately 60 secondhand stores that annually produce over 54,000 secondhand dealer transactions. Due to the volume of transactions and the limited staff available to work in this area, EPD can enter into Eugene’s database less than half of the secondhand dealer reports that have been physically collected by the two detectives, which then limits the comparison of secondhand dealer reports to stolen property lists. These limitations are not unique to Eugene, but are also experienced by Springfield police and the Lane County Sheriff’s Office (LSCO). L:\CMO\2006 Council Agendas\M060111\S060111B.doc Inconsistency in Used Merchandise ordinances and the associated processes of dealing with the reporting of secondhand dealers within the region (Eugene, Springfield and Lane County) has provided an opportunity for individuals involved in property crimes to commit their crimes in one jurisdiction and sell the proceeds from that crime at a neighboring jurisdiction’s secondhand store. The manual systems currently in place make it very difficult for detectives in one jurisdiction to identify stolen property that has been ‘pawned’ in another jurisdiction, or to identify patterns by criminals who are simultaneously ‘pawning’ large amounts of merchandise at different stores. EPD detectives conducted two sample examinations of secondhand dealer transactions from three local full-service secondhand stores during a two-month period in 2003 and 2004. These samples revealed that 40.9% of the secondhand transactions were conducted by customers who have prior local arrest histories for property or drug crimes, excluding arson and less than an ounce of marijuana arrests/citations. Automated Reporting Pilot Project In 2001, Eugene and Springfield Police, the LCSO and other law enforcement officials met to discuss possible improvements to increase the identification and recovery of stolen property before it is resold, and to identify and investigate individuals involved in the sale of stolen property. With that in mind the involved agencies examined automated reporting and the creation of a uniform secondhand dealer ordinance for the region, as possible solutions to these issues. Eugene, Springfield and Lane County initiated an automated reporting pilot project in October 2002. The pilot project has continued for three years with voluntary participation of several secondhand stores in Eugene, Springfield and Lane County. The project demonstrated the reliability, data integration, and effectiveness of automated reporting, compelling the three law enforcement agencies to draft a Used Merchandise Dealers Ordinance to ensure that all regulated secondhand stores in the region would be held to the same standards as stores in their neighboring jurisdictions. Attachment “A” is Eugene’s version of the proposed ordinance. Attachment “B” explains the process of automated reporting and data integration. During the development of the draft ordinance, the participating law enforcement agencies met with secondhand store owners and managers on two separate occasions for feedback on the proposed ordinance. Understandably, most store owners were not initially interested in enhancing governmental regulation of their stores. However, during the course of the information sessions many of the shop owners’ concerns were addressed and participants in the pilot project were able to communicate the benefits of the process to the merchants. As a result, few merchants are now opposed to the automated reporting model. On December 8, 2005, the Police Commission voted unanimously to support the updated Second Hand Dealer Ordinance including the automated reporting component. Following the success of the automated reporting pilot project, the police departments of Eugene and Springfield and the LCSO are now in the process of seeking the adoption of the draft Used Merchandise Dealers Ordinance for each of their respective jurisdictions. Although each of the agencies could independently contract to utilize automated reporting, the program is much more effective if all agencies can participate. This is because uniform adoption eliminates the ability of criminals to simply sell their stolen merchandise in another community or in the unincorporated areas of Lane County. The adoption of similar automated reporting programs is spreading throughout North America and other jurisdictions in Oregon are contemplating the adoption of an L:\CMO\2006 Council Agendas\M060111\S060111B.doc automated reporting program. As more agencies begin to utilize an integrated database, options for criminals to sell their stolen items in other communities will be even further reduced. Financial Considerations: As described in Attachment “B,” a vendor with a secure database will electronically receive the automated reports from each store and then make information from that database available to law enforcement agencies. This would replace the current practice of detectives manually collecting the ‘pawn’ slips from stores and the civilian staff’s manual entry of the data into a Eugene database. Currently, Eugene’s hourly staff cost to collect, manually enter, and review a secondhand dealer transaction is estimated at $2.60 per transaction. Eugene manually entered 11,238 secondhand dealer transactions in FY05 which totals approximately $29,218. Vendor quotes indicate that a five- year contract, appropriate to this region’s transaction levels, would total $20,200 per year for all three agencies. In the proposed process for implementing and operating the automated reporting system, EPD would perform the role of the administrating agency. EPD has both the administrative and financial systems available to smoothly coordinate the program and, of the three agencies, has the only civilian staff currently assigned to work with used merchandise dealers. After the initial startup of the program, it is anticipated that the cost to the department would be minimal. The anticipated savings in staff hours through the implementation of automated reporting systems would be redistributed toward the detection, recovery and investigation of stolen property cases. The actual cost ($20,200) of automated reporting would be borne by the regulated secondhand stores, using a tiered fee schedule based on the number of annual secondhand dealer transactions. It is anticipated that the annual cost to the individual secondhand store would be $200-$700 per year (see Attachment “C”). RELATED CITY POLICIES The City Council goals of a “Safe Community -- where people feel safe, valued and welcome” and Effective, Accountable Municipal Government -- a government that works openly, collaboratively, and fairly with the community to achieve measurable and positive outcomes are both related to the proposed ordinance. COUNCIL OPTIONS The council may choose to: 1. Hold a public hearing on the proposed ordinance on January 23, 2006; 2. Direct staff to redraft the proposed ordinance and hold a public hearing at a later date; or 3. Choose to take no further action on this item. The proposed ordinance has a number of stakeholders with varying perspectives. In summary: The Public - The Eugene community has much to gain from this ordinance because the ability of law enforcement agencies to collaborate to reduce the easy sale of stolen property is enhanced. Law Enforcement - A regional automated reporting system will allow any law enforcement agency with internet access and password permission to access the database and match merchandise to lists of stolen serialized property. L:\CMO\2006 Council Agendas\M060111\S060111B.doc Shop Owners – There are mixed reactions to the proposed ordinance ranging from support to rejection, which they have shared at public meetings and through correspondence with EPD. The proposed tiered fee schedule may cause some stores which sell very few items to cease to do business as secondhand dealers, thus consolidating the market share among the remaining stores. Most of the shops that have participated in the pilot project are enthused about continuing with automated reporting and the point-of- sale system. They have already invested in the infrastructure (computers and DSL) and have made automated reporting an integral part of their business. Courts – Eugene’s Municipal Court could experience some minor additional workload for administrative hearings, although experience in other jurisdictions shows this to be few in number. Circuit Court and the District Attorney (DA) could experience additional criminal filings. The DA is prosecuting “C” felony cases such as Theft I Sales (a typical pawn shop offense). Quicker discovery of the stolen property often leads to quicker resolution in Criminal Court. CITY MANAGER’S RECOMMENDATION The City Manager recommends that the council proceed with the January 23, 2006, public hearing on this item. SUGGESTED MOTION Move to proceed with the January 23, 2006, public hearing on the ordinance concerning used merchandise dealers. ATTACHMENTS A. Proposed Used Merchandise Dealers Ordinance B. Automated Reporting Fact Sheet C. Proposed Funding Model FOR MORE INFORMATION Staff Contact: Jean Stronach, Records Manager Telephone: 682-5492 Staff E-Mail: jean.a.stronach@ci.eugene.or.us L:\CMO\2006 Council Agendas\M060111\S060111B.doc ATTACHMENT A ORDINANCE NO. __________ AN ORDINANCE CONCERNING USED MERCHANDISE DEALERS, AND AMENDING SECTIONS 4.989 AND 4.990 OF THE EUGENE CODE, 1971. THE CITY OF EUGENE DOES ORDAIN AS FOLLOWS: Section 1. Section 4.989 of the Eugene Code, 1971, is amended to provide: 4.989 Used Merchandise Dealer - Requirements . (1) As used in this section, the following words and phrases mean: Proper] identification (a) [Approved. A currently valid identification [document] issued by a [city, county, state or federal] government agency [which bears a] that includes a physical description and photograph [and the signature] of the person [to whom it was issued] and bears the signature of the person. (b) Chief of police. The person authorized by the city manager to carry out the duties of the chief of the Eugene Police Department, or his or her designee. (c) Peace officer. As defined in ORS 133.005. Purchase (bd) . The buying, exchanging, transferring, collecting, consigning or otherwise acquiring of [articles] regulated property from another person not a used merchandise dealer, for resale, exchange or transfer by the purchaser. This includes taking possession of regulated property with an expressed or implied agreement or understanding to return regulated property at a subsequent time at a stipulated price or for the payment of a storage or handling fee. (e) Regulated property. 1. Except for property excluded in paragraph (e) 2. below, any used or secondhand personal property, including, but not limited to, precious metals and gems; watches, jewelry, and household items containing precious metals or precious gems; audio and video equipment and media; photographic and optical equipment; electrical office equipment; yard and garden tools; power equipment and tools; hand tools; telephones or telephone equipment; musical instruments; firearms; and sporting equipment. 2. The term “regulated property” does not include any of the following property: vehicles required to be registered with the state Motor Vehicles Division; boats Ordinance - 1 required to be certified by the state Marine Board; books; collectable trading cards (e.g., baseball trading cards or movie trading cards); glassware; furniture; clothes; refrigerators, stoves, washers, dryers, window air conditioner units, and other similar major household appliances; small kitchen appliances; or property that is purchased for investment purposes, limited to the following: a. Gold bullion bars or rounds (0.995 fine or better); b. Silver bullion bars or rounds (0.995 fine or better); c. All tokens, coins, or money, whether commemorative or an actual medium of exchange, adopted by a domestic or foreign government as part of its currency; or d. Postage stamps, stamp collections and philatelic items. Used merchandise dealer (cf) . 1. A[ny] person[, or employee of any person who, as all or part of a] who engages in, conducts, manages, or carries on any business that, as part or all of its business: 1a. Purchases [or sells used articles] regulated property; or [2. Wrecks, dismantles or disassembles a used vehicle and offers for sale the components thereof; or] 3b. Lends money on security of [used articles, except a person dealing exclusively in whole automobiles, books, clothing, furniture, electrical appliances, or farm implements and machinery; a person who purchases or sells used articles for four days or less in a six month period; or a nonprofit corporation or association that sells or otherwise exchanges only donated articles. For purposes of this section, "business" shall have the meaning attributed to the term in 26 USC Section 162, including but not limited to any regularly conducted activity directed toward the production of income or a livelihood, or any activity for which a federal income tax deduction was taken under 26 USC Section 162 within the preceding three years] regulated property. 2. A used merchandise dealer does not include: a. A person who engages in, conducts, manages, or carries on any business that does not buy regulated property outright, but occasionally accepts in trade regulated property as part or full payment for new articles, where such business is incidental to the primary business of the sale of new articles; b. A person who engages in, conducts, manages, or carries on any business that deals exclusively in Ordinance - 2 the purchase and sale of used whole automobiles, books, trading cards and sports memorabilia, clothing, furniture, major household electric or gas appliances, or farm implements and machinery; or c. A person who engages in, conducts, manages, or carries on any nonprofit corporation or association that purchases, sells or otherwise exchanges only donated articles. (2). [ Recording requirementsA used merchandise dealer shall:] (a) At the time of purchase, a used merchandise dealer shall accurately [R]record [at the time of purchase an accurate] the description of [each article] the regulated property purchased [by the dealer] and the [proper] approved identification of the person from whom the [purchase was made;] regulated property was purchased. (b) Used merchandise dealers shall [R]record [all] purchases [made by the dealer in type or ink and in duplicate on forms obtained from the city, and have a copy of each record available for regular pick- up by the city;] of regulated property via an automated electronic reporting system approved by the city. (c) [Maintain records] All records of purchases shall be kept in an orderly manner [at his/her place of] on the used merchandise dealer’s business[;] premises and open for reasonable inspection by peace officers upon their demand. Each used merchandise dealer shall keep a paper record of each purchase bearing the signature of the customer for a period of one year. [(d) Make all records and all articles purchased available for inspection by the city upon request; (e) Segregate articles purchased by the dealer to permit their identification from the records kept; (f) Comply with all applicable federal, state, and local laws and regulations.] (3) Reporting requirements. (a) Within 12 hours of a purchase, a used merchandise dealer shall input and transmit the recorded information required under subsection (2) using the automated electronic reporting system approved by the city. (b) Only reports containing complete information shall be deemed to comply with this section. (c) In the event that the automated electronic reporting system becomes inoperable, a used merchandise dealer’s computer system becomes inoperable, or other event that makes reporting within the time allowed by subsection (a) of this subsection impossible, the used merchandise dealer shall immediately report the occurrence of such event to the chief of police. The chief of police may suspend the reporting Ordinance - 3 requirements of subsection (a) of this subsection for a reasonable period until electronic reporting can resume. Once the chief of police determines that reporting can resume, used merchandise dealers must, within 12 hours, input and transmit the information required under subsection (2) for all purchases made during any period reporting was suspended by the chief of police using the approved automated electronic reporting system. (4) Reporting fees. The city manager shall establish fees for the use of an automated electronic reporting system in accordance with the procedures of section 2.020 of this code. Such fees shall reflect the costs associated with providing electronic automated reporting system services to used merchandise dealers. Used merchandise dealers shall be charged the fees on an annual basis, and the fees shall become due 45 days after the date billed. (3) 5 Limitations on the purchase of regulated property. (a) A used merchandise dealer shall not: (a)1. [Alter, sell or dispose of any property purchased by the dealer for seven days after the date of purchase during which the dealer is open for business to the public;] Purchase regulated property with serial numbers, personalized inscriptions or initials, or other identifying marks, which are or have been altered, obliterated, removed, or otherwise rendered illegible; [(b) Sell, exchange, dismantle, alter in any manner, or otherwise dispose of articles purchased by the dealer when prohibited from doing so by the city in writing, and until notified otherwise by the city in writing;] (c)2. Purchase regulated property from a person under the age of 18 years[ unaccompanied by a parent or guardian]; (d)3. Purchase regulated property from a person who is [incapacitated as defined by ORS 126.003(4) or who is] obviously under the influence of drugs or intoxicating liquor; or (e)4. [Purchase property which has had its serial number obliterated, defaced, removed or otherwise altered.] Knowingly purchase regulated property from a person who is not the owner of the regulated property or parent or guardian of the owner of the regulated property. (b) A used merchandise dealer shall comply with all applicable federal, state, and local laws and regulations. . (6)Limitations on the sale of regulated property (a) Regulated property purchased by any used merchandise dealer shall not be sold for a period of 7 full days after the date the report required in subsection (3) is received by the city. The used merchandise dealer shall maintain the purchased property in substantially the same form as purchased and shall not commingle the property in a manner that precludes Ordinance - 4 identification during this 7-day holding period. The purchased property shall be located on the business premises during normal business hours during this holding period so that it can be inspected as provided in subsection (7). (b) Upon reasonable belief that the purchased property is the subject of theft, the chief of police may provide notice to any used merchandise dealer not to dispose of any specifically described property purchased. The used merchandise dealer shall retain the property in substantially the same form as purchased. Upon receipt of notice pursuant to this subsection, the used merchandise dealer shall not sell, exchange, dismantle or otherwise dispose of the property for a period of time, as determined and stated in the notice by the chief of police, not to exceed 180 days from the date of purchase. (7) Inspection of used merchandise dealers and regulated property. Upon presentation of official identification, any peace officer may enter onto the business premises of any used merchandise dealer to ensure compliance with the provisions of subsections (1) - (6). The inspection shall be for the limited purpose of inspecting any regulated property purchased by the dealer, held by the dealer pursuant to subsection (6), or the records incident thereto. Any inspection pursuant to this subsection shall only be authorized to occur during normal business hours. . (8) Administrative rulesThe city manager or the manager’s designee is authorized to promulgate rules necessary to carry out the provisions of this section following the procedures of section 2.019 of this code. (9) Enforcement. Any peace officer may enforce the provisions of this section 4.989. . (10) PenaltiesViolation of any of the requirements in subsections (1) – (8) of this section is subject to punishment as provided in subsection 4.990(10). In addition to the remedies provided in subsection 4.990(10), additional proceedings may be instituted, including but not limited to proceedings for injunctive relief, to enforce the provisions of subsections (1) –(8) of this section. Section 2. The entry for “4.980 to 4.989” in the matrix of Subsection (1) of Section 4.990 of the Eugene Code, 1971 is amended, and a new entry for 4.989 and a new Subsection (10) are added thereto, to provide: 4.990 Penalties - Specific . (1) Violation of the following sections is punishable by fine or confinement in jail, or both, up to the amounts indicated opposite each: Section Penalty Ordinance - 5 4.980 to 4.98[9]8 500 fine or imposition of administrative civil penalty pursuant to section 2.018 4.989 See subsection (10) of this section (10) Violation of section 4.989 and any rules adopted thereunder is punishable by a fine of not more than $360. Each violation shall constitute a separate offense, and each day that a violation continues shall constitute a separate offense. Section 3. The City Recorder, at the request of, or with the concurrence of the City Attorney, is authorized to administratively correct any reference errors contained herein, or in other provisions of the Eugene Code, 1971 to the provisions added, amended, or repealed herein. Passed by the City Council this Approved by the Mayor this ____ day of ____________, 2006 ____ day of ______________, 2006 ___________________________ ______________________________ City Recorder Mayor Ordinance - 6 ATTACHMENT B PROPOSED USED MERCHANDISE DEALERS ORDINANCE INFORMATION SHEET Prepared by the Eugene Police Department This information sheet has been prepared to outline several of the current trends involving property crimes as they relate to used merchandise dealers, the current limitations of local law enforcement jurisdictions to regulate used merchandise dealers, and the proposed solution to assist law enforcement in the regulation of used merchandise dealers. In addition some of the concerns of used merchandise dealers regarding the proposed implementation of the amended Used Merchandise Dealer Ordinance and automated reporting are also included. CURRENT TRENDS INVOLVING PROPERTY CRIMES The reported financial loss to the members of our community from crimes involving burglary and theft for 2003 was $5,941,678. That number exceeds the property losses from all other forms of property crimes in Eugene for 2003. For 2003, the Eugene police department recovered 7.53% of property reported stolen in burglaries and thefts. Although Lane County and law enforcement jurisdictions within Lane County may have different statistical numbers representing their property loss verses their recovery rate, the statistical percentages for recovered property remains very low. Individuals involved in property crimes frequently sell or trade the stolen property to a variety of sources for cash or drugs. Some common recipients of this stolen property include drug dealers, individual citizens, pawn shops and secondhand dealers. Upon the examination of secondhand dealer transactions from three local full service secondhand stores during a two-month period, it was discovered that 40.9% of the secondhand transactions were conducted by customers who have prior local arrest histories for property or drug crimes, excluding arson and less than an ounce of marijuana arrests/citations. Currently, the Eugene Police Department has two full-time property crime investigators and a property crime analyst assigned to regulate approximately 60 secondhand stores, investigate and recover stolen property sold to secondhand stores and process approximately 54,000 secondhand dealer reports. Due to the limited resources available approximately less than half of the all secondhand dealer reports are not processed or compared for matches with stolen property lists. A PROPOSED SOLUTION TO IMPROVE LAW ENFORCEMENT’S EFFICIENCY In May of 2002 the City of Eugene began exploring the feasibility of using an automated reporting system for Used Merchandise dealers for the purpose of developing a more efficient way for pawnshops and secondhand dealers to report pawn, consignment and buy transactions to law enforcement. The goal of this project was to develop a more efficient method of collecting and disseminating pawn, consignment and buy information, develop a more efficient method of comparing reported stolen property lists with pawned, consigned or sold items and reduce the work hours needed to collect, enter and retrieve information about pawned, consigned or sold property. Although the employment of automated pawn systems is a relatively new alternative to the traditional methods of reporting and investigating pawn shops and secondhand dealers, it is not an alternative that has been untried. Currently several law enforcement agencies within the United States and Canada are using some form of an automated pawn system to assist them in their investigation of pawn and secondhand dealer transactions. Many of these systems are stand-alone systems with limited cross-jurisdictional application that have been developed by the individual agencies to meet their specific needs. After the examination of several available automated reporting systems and reviewing submissions of RFP’s, Lane County, the City of Eugene and the City of Springfield initiated a pilot project for the automated reporting of used merchandise transactions to law enforcement. Business Watch International (BWI) was the automated reporting system selected to participate in the pilot project. Their system provides the internet-based program for collecting, storing and delivering transaction information gathered in pawn shops and secondhand goods businesses. The automated reporting system links police services to a real-time database that displays information on transactions occurring in pawn and secondhand businesses. Pawn and secondhand businesses enter every transaction on computer which is faster and more economical than with any paper method. All information is transferred by Internet into the vendor’s database. Police Services using BWI have round-the-clock access to a database that covers jurisdictions across the country. Initially, four secondhand stores agreed to participate in the pilot project. By FY05, seven secondhand stores were participating in the pilot project. During the course of the three-year pilot project, BWI modified their automated reporting system to address the specific needs of both law enforcement and secondhand businesses, making the system more effective locally. In March of 2004, representatives of law enforcement from Lane County, Eugene and Springfield jointly developed a proposed Used Merchandise Dealer Ordinance that updated current practices and procedures, including the use of automated reporting. Upon completion of the draft Used Merchandise Dealer Ordinance, business owners were invited to attend a meeting to discuss the proposed ordinance and automated reporting systems with representatives of three law enforcement agencies and the vendor, Business Watch International. Following an analysis of comments and suggestions made by the used merchandise dealers, several of the suggestions were incorporated into the draft ordinance. In October of 2004, used merchandise dealers and owners were invited to attend a second meeting to discuss the revised ordinance. At the conclusion of the second meeting more stores were supportive of the project and the three law enforcement agencies agreed to proceed with the adoption process. SUMMARY OF CONCERNS EXPRESSED BY USED MERCHANDISE DEALERS Of the 70+ used merchandise dealers affected by the ordinance and invited to participate in the meetings relating to the Used Merchandise Dealer Ordinance, only representatives from six stores expressed opposition to the implementation of the ordinance. The three primary concerns voiced by secondhand dealers opposed to the ordinance, and the use of BWI as the automated reporting system vendor, were the expense of automated reporting and who pays for the automated reporting, the use of a Canadian company as the automated reporting vendor, and the privacy of individual store business and customer records. The Funding Model for Automated Reporting -- The funding model originally required that individual stores pay for the cost of automated reporting in the form of a transaction fee for every pawn, repawn, consignment, recycle or purchase that the store makes from the public. The ordinance would have allowed the individual stores to recover the cost of automated reporting from the customer selling property to the store. However, following extensive discussion with store owners on this model, the vendor developed an alternative model for a set annual fee based upon the history of annual store transactions. Eugene explored this option and after analyzing the funding currently available for the program and factoring the potential savings in staff time, found that this would be a viable option. Store owners who had been opposed to the transaction-fee funding model found the annual set fee model more viable and withdrew most objections to the proposed ordinance. The Use of a Canadian Automated Reporting Company -- Business Watch International’s (BWI) automated reporting system was chosen for the pilot project because they had a product that was successfully operating in other jurisdictions and one that met the needs of Eugene, Springfield and Lane County law enforcement. Additionally, during the pilot project BWI has continued to improve and refine their product to meet the needs of local law enforcement and the pawn/secondhand dealer industry while reducing their operational costs. Although BWI is a Canadian-based company they are licensed in the United States and have business operations in other U.S. cities. Privacy of Business and Customer Records -- The information obtained through automated reporting includes the same information that law enforcement is currently collecting from used merchandise dealers and is already categorized as a public record. The difference is that the information is being submitted via a secure internet connection. Business Watch International acts as a warehousing/storage company that releases reportable information only to law enforcement. Any and all business records that pawn/secondhand stores submit are the sole property of the individual store and none of that information can be released without the consent of the individual store. Additionally, BWI has a desktop application available that retains the business records in the individual store and only reportable data is transmitted to BWI which in turn is accessible only to law enforcement. ATTACHMENT C USED MERCHANDISE DEALERS ORDINANCE PROPOSED FUNDING MODEL AND ESTIMATE OF ANNUAL SYSTEM CHARGES December 2005 The pricing model proposed to fund the Used Merchandise Dealer Automated Reporting System is based on the use of a third party vendor who provides the internet-based program for collecting, storing and delivering transaction information gathered in pawn shops and secondhand goods businesses. The model is designed to apply to all stores in Eugene, Springfield and unincorporated Lane County who meet the qualifications as set forth in the proposed amendments to the Used Merchandise Dealers Ordinance (see Attachment “A”). Administration of the program would be handled by Eugene Police Department. If the other jurisdictions do not successfully pass a similar ordinance that requires automated reporting of transactions then the vendor’s quote for the annual system fee would be modified to reflect the reduced number of transactions. As currently proposed, the cost of administering the program would be absorbed by the Eugene Police Department because the use of the automated system will reduce the administrative duties that are currently performed manually by EPD’s Property Crime detectives and the civilian staff person. Their time will then be freed to utilize the electronic database with real-time information. Fees charged to stores are based upon each store’s level of annual transactions. These fees will be used to pay the annual systems charges to the vendor. Eugene’s financial systems are capable of billing the respective stores and the Eugene Police Department can receive the fees and deposit them into the appropriate revenue account to offset the annual vendor fees which have been quoted in a five-year contract. Following the approval of the amendments to the Used Merchandise Dealers Ordinance, the City Manager would be authorized to develop a fee schedule which would then be adopted through the Administrative Rule process. An estimate of proposed charges to the stores that would fund the annual system is provided below: ESTIMATE OF ANNUAL SYSTEM CHARGES Number of Range of Estimated Tier Level Pricing Model 1 Stores Annual Transactions Annual Charge 2 Per Store Per Store 7 >3,000 I $700 8 1,000 – 2,999 II $550 23 300 - 999 III $400 20 <300 IV $200 58 $22,500 1 Stores are located in Eugene, Springfield and unincorporated Lane County 2 Based upon reported transactions in 2004