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Item No: 9B Meeting Date: October 27, 2003 Type of Business: Business Administrator Review: _____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: James Ericson, Community Development Director Item Title/Subject: First Reading and Introduction of Ordinance 712, an Ordinance Establishing Licensing and Operating Requirements and Regulations for Pawnshops Introduction: The City Council adopted an Interim ordinance on February 27, 2003, which directed the Planning Commission to review the licensing and zoning implications related to pawnshops and to recommend applicable provisions. The Planning Commission discussed this issue at meetings in March, April and May of this year, reviewing State statues, ordinances from adjoining communities and ordinances from communities where pawnshops currently operate. The Commission also heard testimony from representatives of the Mounds View Police Department who performed research of their own, discussing the potential impacts of a pawnshop with other police departments. After significant discussion and input from interested parties including residents and tenants from Moundsview Square, the Planning Commission adopted a resolution forwarding two ordinances on to the City Council for their consideration. No changes or revisions have been made to the licensing ordinance since last reviewed by the City Council in June of this year. Discussion: Ordinance 712 adds a new Chapter to the Licensing section of the Municipal Code, Title 500. The new chapter, Chapter 516, addresses all aspects of pawnshop operation and regulation. The Council will need to adopt by a separate resolution the appropriate license fees for a pawnshop license. Licensing fees need to reasonably relate to the impact upon the City, thus a City cannot legitimately impose for example a $25,000 license fee simply to discourage a certain business. The annual license fee currently proposed is $10,000. In addition to that, the City would receive 50 cents from every reportable transaction as currently proposed. Together, it would be intended that the collected fees would cover the City’s added expense of overseeing and monitoring the operation, the bulk of which would be handled by the Police Department. We have researched other cities fees and have made inquiries with other police departments to get a sense of how much extra work is generated with the addition of a pawnshop. Based on this research, it could be determined that a $10,000 annual license fee should be sufficient. If a pawnshop were to locate in Mounds View, the Council would have the authority to adjust fees if they are found to be insufficient. Any pawnshop would be required to participate in the Automated Pawn System (APS) program created by the City of Minneapolis. Pawnshops report every transaction into the APS database which then allows subscribing police departments to check periodically for merchandise which may have been reported stolen. Mounds View is a subscriber to this system. Pawned goods are to be held for a 90 day period to both aid in the recovery and return of any stolen merchandise and to ensure an adequate period of time for the person pawing one’s possessions can retrieve them. Licensing Provisions October 27, 2003