HomeMy WebLinkAboutItem 3: PH on Ordinance Concerning Used Merchandise Dealers
ECC
UGENE ITY OUNCIL
AIS
GENDA TEM UMMARY
Public Hearing: An Ordinance Concerning Used Merchandise Dealers, and Amending
Sections 4.989 and 4.990 of the Eugene Code, 1971
Meeting Date: January 23, 2006 Agenda Item Number: 3
Department: Eugene Police Staff Contact: Captain Elvia Williams
www.eugene-or.gov Contact Telephone Number: 682-5114
ISSUE STATEMENT
This is a public hearing for 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 Council held a work session on January 11, 2006, to discuss the proposed amendments to the
Used Merchandise Dealer Ordinance. The council voted unanimously to forward the proposal to a
public hearing.
The City of Eugene’s existing Used Merchandise Dealer Ordinance was adopted in 1996. Since that
time, Eugene, Springfield, and unincorporated Lane County have experienced an explosion of property
crimes. In Eugene, the number of burglary cases increased 15.87% between 2004 and 2005. Updating
the Used Merchandise Dealers Ordinance to require “real-time” automated reporting instead of the time-
consuming manual paper slip reporting method is an important strategy for law enforcement to identify
the repeat criminals involved in these thefts and to create a better mechanism for returning stolen items
to the lawful owners. The proposed ordinance builds on the existing code by modernizing the system to
require electronic reporting which will provide law enforcement with ‘real time’ data on sales that can
be matched to stolen property.
A significant aspect of this proposal is the coordination of a regional approach from the largest law
enforcement agencies, Eugene Police Department (EPD), Lane County Sheriff’s Office (LCSO) and the
Springfield Police Department. All three agencies currently have a Used Merchandise Dealer Ordinance
that regulates stores in their jurisdiction and all jurisdictions in this region share the growing problem of
burglaries and theft, most of which are directly linked to the area’s drug problems. Over the last three
years, representatives from the three agencies have developed this proposal to standardize the practices
for reporting sales for all stores and provide law enforcement agencies with real-time data on goods
being sold to secondhand dealers.
To enforce the existing ordinance, Eugene has dedicated two property detectives and one civilian
employee for approximately 60 secondhand stores that annually produce over 54,000 secondhand dealer
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transactions. The detectives enforce the ordinance and manually distribute and collect secondhand
dealer reports and the civilian employee enters data from the paper slips into a database. The database
helps detectives to identify and recover stolen property sold or consigned to secondhand stores, and
conduct investigations of individuals selling or consigning stolen property. 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; they are also experienced by Springfield police and the Lane County Sheriff’s
Office (LSCO).
Inconsistency in used merchandise ordinances and the associated process 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, with an increased
likelihood that their criminal activity will go undetected and the stolen property won’t be recovered.
EPD 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.
Secondhand dealers are a significant part of the retail industry and are also victims of property crime
when they unknowingly accept stolen goods.
Automated Reporting Pilot Project
In 2001, Eugene and Springfield Police, the LCSO and other law enforcement officials met to discuss
improvements to the system for identification and recovery of stolen property before it is resold and to
identify and investigate individuals involved in the sale of stolen property. Eugene, Springfield and
Lane County initiated an automated reporting pilot project in October 2002. The pilot project has
continued for three years with the 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 applicable to all jurisdictions which would ensure that all regulated
secondhand stores in the region would be held to the same standards. 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 making changes to the
existing ordinance. However, during the course of the information sessions, many of the merchants’
concerns were addressed and participants in the pilot project were able to communicate the benefits of
the process. On December 8, 2005, the Police Commission voted unanimously to support the updated
Use Merchandise Dealer Ordinance including the automated reporting component.
Following the success of the automated reporting pilot project, EPD and LCSO are now in the process of
seeking the adoption of the draft Used Merchandise Dealers Ordinance for each of their respective
jurisdictions. Springfield Police Department will move forward with its ordinance amendment process
following the successful changes to Eugene and Lane County’s Used Merchandise Dealer Ordinances.
Although each of the agencies could independently contract to utilize automated reporting, the program
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is much more effective if all agencies can participate. Uniform adoption eliminates the opportunity for
criminals to simply sell their stolen merchandise in another community or in the unincorporated areas of
Lane County. Automated reporting programs are growing in North America and other jurisdictions in
Oregon are now contemplating the adoption of an automated reporting program. As more agencies
begin to utilize an integrated database, options for criminals to sell their stolen items 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 collecting the ‘pawn’ slips from stores
and clerical staff manually entering the data into a regional 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 at an annual cost
of 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. The transaction level sought by
our region would include room for increased transactions or the addition of another interested
jurisdiction.
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. A draft inter-agency agreement has been prepared to
determine the responsibilities and contributions of each law enforcement agency participating in the
program. After the initial startup of the program, it is anticipated that the cost to the city of Eugene
would be minimal, with an annual estimate of $700 to administer the program. This figure includes the
work hours required to complete the annual billings, overhead and supervisory time.
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 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.Take action on the item at its February 13, 2006 meeting;
2.Direct staff to redraft the proposed ordinance and then take action on the item at its February 13,
2006 meeting; or
3.Choose to delay action on this item until a later date.
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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 provide any law enforcement agency
with internet access and password permission access to the database and the ability to match
merchandise to lists of stolen serialized property.
Shop Owners – have 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 ready to continue 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 take action to amend the ordinance concerning used
merchandise dealers, Section 4.989 and 4.990 of the Eugene Code, 1971 at the February 13, 2006
meeting.
SUGGESTED MOTION
No motion is required for the public hearing. If the council chooses to take action on January 23, the
following motion is suggested:
Move to adopt an ordinance concerning used merchandise dealers, and amending sections 4.989 and
4.990 of the Eugene Code, 1971.
ATTACHMENTS
A. Proposed Used Merchandise Dealers Ordinance
B. Automated Reporting Fact Sheet
C. Proposed Funding Model
FOR MORE INFORMATION
Staff Contact: Captain Elvia Williams, Investigation Division
Telephone: 682-5114
Staff E-Mail: elvia.p.williams@ci.eugene.or.us
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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
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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
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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
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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
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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
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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
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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 much for effective locally.
In March of 2004, 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 proposed Used Merchandise Dealer Ordinance,
used merchandise dealers and owners were invited to attend a meeting to discuss the proposed
ordinance and automated reporting with representatives of Lane County, Eugene, Springfield and
BusinessWatch International. At the conclusion of the meeting, shop owners were asked to share
their comments and suggestions to improve the proposed ordinance.
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 meeting with the used merchandise dealers, government
representatives of Lane County, Eugene and Springfield agreed to proceed with the adoption
process.
THE CONCERNS OF SOME USED MERCHANDISE DEALERS OPPOSED TO THE
USED MERCHANDISE DEALER ORDINANCE
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. The difference is that the information is being submitted via a secure
internet connection. Additionally, secondhand dealer reports are categorized as a public record.
Business Watch International acts as a warehousing/storage company that releases only reportable
information 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
FUNDING MODEL AND ESTIMATE OF ANNUAL SYSTEM CHARGES
January 2006
The pricing model proposed to fund the Used Merchandise Dealer Automated Reporting
System is based on the use of a third party vendor who will provide 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”). 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 three law enforcement agencies would enter into an inter-
agency agreement which would identify that the program would be administered by the
Eugene Police Department. When the program is operational, the automated systems of
the vendor will replace the administrative duties that are now performed manually by
EPD’s two Property Crime detectives and the civilian staff person. The three employees
would then have additional time to utilize the electronic database with real-time
information and conduct other enforcement activities.
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. The EPD would receive the fees
which would offset the annual vendor fees. The annual cost to administer the program is
estimated at $700.
Following the approval of the amendments to the Used Merchandise Dealers Ordinance,
the City Manager will be authorized to develop a fee schedule which is adopted through
the Administrative Rule process. An estimate of proposed charges to the stores that
would be sufficient to 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 5,625 $22,500
1
Stores are located in Eugene, Springfield and Unincorporated Lane County
2
Based upon reported transactions in 2004