HomeMy WebLinkAboutItem 19 Used Merchandise Dealer Ordinance - Automated Reporting Requirement
AGENDA ITEM SUMMARY Meeting Date: July 16,2007
Meeting Type: First Reading/Public Hearing
Department: Police Departrnprent
Staff Contact: Jerry Smith ,~
S P R I N G FIE L D Staff Phone No: 726-3729
C I T Y C 0 U N C I L Estimated Time: 20 Minutes
ITEM TITLE: USED MERCHANDISE DEALER ORDINANCE - AUTOMATED REPORTING
REQUIREMENT
ACTION
REQUESTED:
ISSUE
STATEMENT:
ATTACHMENTS:
Conduct a public hearing and fIrst reading on the following ordinance: AN
ORDINANCE AMENDING ARTICLE 7 OF THE SPRINGFIELD MUNICIPAL
CODE REPEALING EXISTING SECTIONS 7.100, 7.102, 7.104, 7.106, 7.108
AND ADDING SECTIONS 7.100, 7.102, 7.104, 7.106, 7.108, 7.110 AND 7.112.
Should the Council adopt a Used Merchandise Ordinance to require Used
Merchandise dealers to comply with an automated reporting system within the City
of SpringfIeld?
1 - Council Briefmg Memorandum
2 - Draft Ordinance
3 - Current Ordinances regulating Used Merchandise Dealers
4 - 2 letters from Used Merchandise Dealers
DISCUSSION/
FINANCIAL
IMPACT:
Eugene, SpringfIeld and Lane County initiated an automated reporting pilot project
in October, 2002 with voluntary participation of several secondhand stores in
Eugene, SpringfIeld and unincorporated Lane County.
During the development of the draft ordinance, the participating law enforcement
agencies met with secondhand store owners and managers for feedback on the
proposed ordinance. There has been a mixed review from the dealers who are
concerned about the additional costs to their businesses for implementing the
program as well as a preferred vendor. Council has received correspondence from
second hand business dealers expressing their concerns on the matter.
Council heard from a number of business owners affected by a proposed ordinance
that would require Used Merchandise dealers to comply with an automated
reporting system. Since the April 3, 2006 work session on this matter, the City of
Eugene and Lane County have adopted ordinances requiring dealers to comply with
automated reporting.
The proposed process for implementing and operating the automated reporting
system would be administered by the Eugene Police Department. The actual cost
($20,200) of automated reporting would be borne by the regulated secondhand
stores, using a fee schedule based on the number of annual secondhand dealer
transactions. It is anticipated that the annual cost to the individual secondhand store
would range between $200-$700 per year.
In the event that BWI receives the bid from an RFP issued by the City of Portland,
we have been advised that the local automated program will be permitted to
interface with the Portland data base.
At the March 5, 2007 work session, Council directed the ordinance to move
forward for a public hearing.
MEMORANDUM CITY OF SPRINGFIELD
DATE:
TO:
FROM:
SUBJECT:
June 4, 2007
Gino Grimaldi, City Manager
Jerry D. Smith, Chief of Police
Used Merchandise Ordinance
Council
Briefing
Memorandum
Issue:
Should the Council adopt a Used Merchandise Ordinance to require Used Merchandise dealers to comply
with an automated reporting system within the City of Springfield?
Background:
At the March 5, 2007 City Council Meeting, Council discussed the proposal to adopt an ordinance
requiring Merchants dealing in Used Merchandise to comply with an automated reporting system as
opposed to the current system of paper reports for transactions in which the businesses buy used
merchandise. Council also received considerable public testimony in March and April, 2006 during which
second hand dealers offered testimony in opposition to adopting an ordinance mandating electronic
reporting of transactions.
A letter was sent to the affected used merchandise dealers at the direction of Council following the March
5th meeting. Two responses were received from dealers expressing opposition to the proposed electronic
reporting system. I met with Jeff Thurn of North Star Coin who is opposed to this system, believing that
his business will be disadvantaged because the proposed ordinance as drafted requires the reporting of
collectable coins and money that is not required in Eugene or Lane County. Some of Mr. Thurn's
concerns were addressed, however Eugene and Lane County do not require the reporting of collectable
coins and money as the proposed Springfield Ordinance includes. We also received a letter of opposition
from Ace Buyers.
The City of Eugene and Lane County have adopted the ordinance and Eugene is administering the
contract with BWI. Sheriff Burger sent a letter to Used Merchandise Dealers in Lane County and advised
the County would be delaying implementation of automated reporting until there exists a clear picture of
the future of automated reporting (referring to Portland's effort and the discussions at the State level).
The City of Springfield currently imposes reporting requirements of second hand dealers under SMC
7.104 for purchases at second hand dealer businesses. This reporting is currently conducted with paper
forms, retrieved by police employees and then entered into a data base by police employees. Attachment
4 provides information related to this issue. An automated process would eliminate the labor demands for
picking up the transaction reports and data entry of the transactions.
Eugene, Springfield and Lane County initiated an automated reporting pilot project in October, 2002 with
voluntary participation of several secondhand stores in Eugene, Springfield and unincorporated Lane
County. The project demonstrated reliability, data integration and effectiveness of automated reporting
resulting in the three law enforcement agencies to jointly draft a Used Merchandise Dealers Ordinance to
assure that all regulated secondhand stores in the region would be held tb the same standards as stores
in neighboring jurisdiction.
During the development of the draft ordinance, the participating Jaw enforcement agencies met with
second hand store owners and managers for feedback on the proposed ordinance. Most store owners
were not initially interested in enhancing regulations of their stores. Many of the shop owners concerns
were addressed during discussions, however concerns and opposition do remain among some of the
dealers. Council received correspondence from second hand business dealers expressing their concerns
on the matter in March/April, 2006. The two significant common concerns surrounded the use of BWI as
the vendor and the costs imposed on second hand dealers. Merchants expressed concern that BWI is a
Canadian firm and information would be transferred to Canada. Further, concern was expressed that BWI
Attachment 1 - Page 1
would likely dissolve and the information would be lost. In fact, the information collected is interfaced with
the regional AIRS property files and dissolution of the company would not result in lost data.
The proposed process for implementing and operating the automated reporting system would be
administered by the Eugene Police Department. The actual cost ($20,200) of automated reporting would
be borne by the regulated secondhand stores, using a 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 between $200-$700 per year, depending upon the number of transactions of the respective
business.
The significant features of the ordinance are:
1) The efficient use of staff time is improved through automated reporting, eliminating data entry and
staff time to pick up transaction records.
2) The cost to implement an automated reporting system is borne by the secondhand dealers who are
purchasing the used items. .
3) The time from transaction to available use by law enforcement staff is reduced to one day as
opposed to as much as a week.
The community of second hand dealers submitted numerous documents addressing this issue, raising the
following concerns:
1) BWI, the apparent preferred vendor by the City of Eugene is a Canadian firm, resulting in local
dollars and information being sent to Canada. The issue of viability of BWI since its
divestiture from SaskteJ (owned by the Provincial government of Saskatchewan) in March,
2006.
2) Requiring second hand dealers to comply with an electronic reporting system supported by
BWI would impose additional costs to the dealers for additional computers, dedicated phone
lines and internet connections and additional personnel costs.
3) Fear of increased costs when contract renewal with BWI would occur.
4) Costs for property thefts and burglaries are a county-wide problem and should be borne by
the entire county, not by the secondhand shops and their customers
5) Leads-on-Line has represented to second hand dealer, Mr. Buck Biggs that they can provide
integration with the local law enforcement computer data systems.
6) Leads-on-Line has a presence in 22 states. BWI has littlRpresence in the United States.
7) A detective with the City of Portland is developing an electronic reporting system (Rapid
Automated Pawn Identification Deployment). The recommendation by at least one owner,
Buck Biggs recommends deferring an immediate decision to await development of that
system.
Council conducted a public hearing on the matter on June 5, 2006 and heard testimony from many of the
second hand dealers in opposition to adoption of such and ordinance.
Staff believes there will be additional costs to Used Merchandise Dealers, the amount depending upon the
business practices, technology used and equipment used by the respective dealer.
The City of Portland has promulgated an RFP for an automated reporting system and if BWI is awarded
the contract, they have advised Eugene that the local system can be integrated with Portland once in
place. Given the magnitude of Portland's project and the local experience of developing a system, it is
likely that significant time will be required before the system is in place and functioning. In the event that
BWI receives the bid from an RFP issued by the City of Portland, we have been advised that the local
automated program will be permitted to interface with the Portland data base.
At the March 5,2007 work session, Council directed the ordinance to move forward for a public hearing.
Recommended Action:
This information is provided for council consideration and staff recommends adoption.
Attachment 1 - Page 2
ORDINANCE NO.
AN ORDINANCE AMENDING ARTICLE 7 OF THE SPRINGFIELD MUNICIPAL CODE
REPEALING EXISTING SECITONS 7,100, 7,102, 7,104, 7.106 AND 7,108 AND ADDING
SECTIONS 7,100,7.102, 7,104, 7.106,7,108,7,110 AND 7,112
THE CITY OF SPRINGFIELD DOES ORDAIN AS FOLLOWS:
Section 1. Section 7,100, "License Required," Section 7,102, "License Fee," Section
7,104, "Records," Section 7,106, "Restriction on Purchases," and Section 7,108
"Restriction on Sales" of the Springfield Municipal Code are hereby repealed,
Section 2. Section 7,100, "License Required," Section 7,102, "License Fee,'. Section
7,104, "Used Merchandise Dealer-Requirements," Section 7.106, IIAlternate Recording
Requirements,1I Section 7,108, "Restriction on Purchases," Section 7,110, "Restriction
on Sales,1I and Section 7,112, "Penalties" are hereby added to the Springfield Municipal
Code as follows:
"Section 7.100 License Required.
(1) No person shall establish, maintain or operate a used merchandise dealer
business within the city unless a license for that use is obtained from the city,
Every place or building where a used merchandise dealer carries on, shall be
deemed a used merchandise dealer subject to the provisions of Sections 7,100 to
7,112. Each licensee shall meet the applicable standards as described in sections
7.000 to 7,112.
(2) Sections 7,100 to 7,112 shall not apply to persons dealing exclusively in
automobiles, farm implements and machinery, books or books on tape,
secondhand clothing, or charitable, non-profit organizations,
(3) The requirements of Sections 7,100 to 7.112 shall apply to the owner,
manager, operators, employees and agents of the licensee's business,
Section 7.102 License Fee. Each licensee shall be required to pay the
applicable license fee as set by Resolution of the Common Council.
Section 7.104 Used Merchandise Dealer-Requirements.
(1) As used in this section, the following words and phrases mean:
(2)
(a) Approved Identification. A currently valid identification issued by
an agency that includes a physical description and photograph of
the person and bears the signature of the person.
ORDINANCE Page -1-
Attachment 2
Page 1
(b) Chief of Police, The person authorized by the city manager to carry
out the duties of the chief of the Springfield Police Department, or
his or her designee,
(c) Peace Officer. As defined in ORS 133,005.
(d) Purchase, The buying, exchanging, transferring, collecting,
consigning or otherwise acquiring of 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; collectible coins, paper money or tokens.
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 required to be
certified by the state Marine Board; transactions conducted
by financial institutions as defined by 31 CFR g103.11 and by
credit unions as defined by 12 CFR g700,2(d), books and
books on tape; 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); or
ORDINANCE Page -2-
Attachment 2
Page 2
c, Postage stamps, stamp collections and philatelic
items,
(f) Used merchandise dealer,
1. A person who engages in, conducts, manages, or carries on
any business that, as part or all of its business:
a, Purchases regulated property; or
b. Lends money on security of 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 the
purchase and sale of used whole automobiles, books
or books on tape, 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,
d, A person whose purchases do not exceed 10 items of
used merchandise each month; or,
A person who expends not to exceed $100,00 each
month acquiring used merchandise; and
who completes the Alternate Recording Requirements
of Section 7,106, and who purchases the license
required by Section 7.100,
ORDINANCE Page -3-
Attachment 2
Page 3
(2) Recording requirements,
(a) At the time of purchase, a used merchandise dealer shall accurately
record the description of the regulated property purchased and the
approved identification of the person from whom the regulated
property was purchased.
(b) Used merchandise dealers shall record purchases of regulated
property via an automated electronic reporting system approved by
the city,
(c) All records of purchases shall be kept in an orderly manner 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.
(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 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 Common Council shall, by Resolution, establish fees
for the use of an automated electronic reporting system. Such fees shall
ORDINANCE Page -4-
Attachment 2
Page 4
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 a nnual basis, and the fees shall become
due 45 days after the date billed.
(5) Limitations on the purchase of regulated property,
(a) A used merchandise dealer shall not:
1. 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;
2, Purchase regulated property from a person under the age of
18 years.
3, Purchase regulated property from a person who is obviously
under the influence of drugs or intoxicating liquor; or
4, 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 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
ORDINANCE Page -5-
Attachment 2
Page 5
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) Enforcement. Any peace officer may enforce the provisions of this Section
7,104,
Section 7.106 Alternate Recording Requirements.
(1) A record of purchase form shall be completed at the time of purchase or
consignment of goods immediately upon delivery of the goods to the
licenses business premises, The forms provided to the licensee shall be
completed in a legible manner/providing all the information called for on the
form. The licensee shall keep them in orderly manner, open for the
inspection of and delivery to police officers upon their demand.
(2) The record of purchase forms shall be provided by the city for the ready
identification of all goods purchased or consigned by or through the licensed
business and shall contain:
(a) Name of business;
(b) Date of the transaction;
(c) Time of the transaction;
(d) Name of the employee or owner transacting the business;
(e) Amount to pay for the goods;
(f) A detailed description and quantity of each article, including but
not limited to brand, name, color, model, and serial number;
ORDINANCE Page -6-
Attachment 2
Page 6
(g) Name and address of the seller;
(h) A physical description and birth date of the seller;
(i) Reference to valid photographic identification of the seller; and
(j) The signature of the seller.
(3) The licensee shall require persons pawning or selling merchandise to sign
the record of purchase form,
Section 7.108 Restriction on Purchases. No purchase or consignment of
items subject to Sections 7,100 to 7,112 may be made from any person under
the age of 18 years, unless the person has obtained the age of majority by being
married according to law, No purchase or consignment may be made from any
person incapable of intelligent dealing or under the influence of narcotic drugs or
intoxicating liquor.
Section 7.110 Restriction on Sales.
(1) All used goods purchased or consigned by the licensee shall be segregated
in a manner as to permit their ready identification by the record required in
Section 7,104 and 7,106, for a period of seven days after purchase or
consignment. A police officer may at any time order the licensee to hold any
goods for a period not to exceed ten days when the police officer has a
reasonable suspicion to believe the goods are stolen.
(2) A person conducting an antique/secondhand business shall store all used
articles in either a building or an enclosure surrounded by a solid wall or
painted board fence at least six feet high and of such character as to
prevent view of the used goods or articles from without the property,
(3) The wall or fence shall be maintained in a good condition and in good repair
at all times,
(4) As used in this section, to store or storage is that supply of used articles that
is set aside for or awaiting future sale, The requirements of this section do
not apply to the display for sale of used articles or goods for periods of time
not exceeding 24 consecutive hours,
ORDINANCE Page -7-
Attachment 2
Page 7
:'
Section 7.112 Penalties, Violation of any of the requirements in subsections
of this section is subject to punishment as provided in the Springfield Municipal
Code, In addition to the remedies provided in the Springfield Municipal Code,
additional proceedings may be instituted, including but not limited to proceedings
for injunctive relief, to enforce the provisions of Section 7,100 through 7,110," ,
Section 2. If any phrase, clause, or other part or parts of this Article is found to be
invalid by a court of competent jurisdiction, the remaining phrases, clauses and other
part or parts shall remain in full force and effect,
Section 3. This ordinance shall become effective as specified in Springfield Municipal
Code Section 2.110,
Adopted by the City Council of the City of Springfield this _ day of
2007 by a vote of in favor against.
Approved by the Mayor of the City of Springfield this _ day of
2007,
Sid Leiken, Mayor
ATTEST:
Rt\HEWED & PROVED
AS TO FORM
/V'--~~
,..... 'T!=' L?-T"---/-o2
u A . ~, -J.;,.I-I-~ (' -
OFFICE QF err! ATTORNEY
Amy Sowa, City Recorder
N :\City\Police\Used Merchandise Ordinance\Ordinance.doc
ORDINANCE Page -8-
Attachment 2
Page 8
EXISTING
Springfield Municipal Code
7.100 License Required.
(1) No person shall establish, maintain or operate an antique or secondhand dealer
business within the city unless a license for that use is obtained from the city. Every place
or building where an antique or secondhand dealer carries on, shall be deemed an antique
or secondhand dealer subject to the provis ions of sections 7.100 to 7.108. Each licensee
shall meet the standards as described in sections 7.000 to 7.006.
(2) Sections 7.100 to 7.108 shall not apply to persons dealing exclusively in automobiles,
farm implements and machinery, books, secondhand clothing, or to any business selling,
buying or taking in trade used articles'incidental to the sale of new articles or merchandise,
or charitable, non-profit organizations.
(3) The requirements of sections 7.100 to 7.108 shall apply to the owner, manager,
operators, employees and agents of the licensed business.
7,104 Records,
(1) A record of purchase form shall be completed at the time of purchase or consignment
of goods immediately upon delivery of the goods to the licensed business premises. The
forms provided to the licensee shall be completed in a legible manner, providing all the
information called for on the form. The licensee shall keep them in orderly manner, open
for the inspection of and delivery to police officers upon their demand.
(2) The record of purchase forms shall be provided by the city for the ready identification of
all goods purchased or consigned by or through the licensed business and shall contain:
(a) Name of the business;
(b) Date of the transaction;
(c) Time of the transaction;
(d) Name of the employee or ownertransacting the business;
(e) Amount to pay for the goods;
(f) A detailed description and quantity of each article, including but not limited to brand,
name, color, model, and serial number;
(g) Name and address of the seller;
(h) A physical description and birth date of the seller;
(i) Reference to valid photographic identification of the seller; and
U) The signature of the seller.
(3) The licensee shall require persons pawning or selling merchandise to sign the record of
purchase form. ..
7.106 Restriction on Purchases,
No purchase or consignment of items subject to sections 7.100 to 7.108 may be made
from any person under the age of 18 years, unless the person has obtained the age of
majority by being married according to law. No purchase or consignment may be made
from any person incapable of intelligent dealing or under the influence of narcotic drugs or
intoxicating liquor.
7.108 Restriction on Sales,
(1) All used goods purchased or consigned by the licensee shall be segregated in a
manner as to permit their ready identification by the record required in section 1.104, for a
Attachment 3
Page 1
period of seven days after purchase or consignment. A police officer may at any time order
the licensee to hold any goods for a period not to exceed ten days when the police officer
has a reasonable suspicion to believe the goods are stolen.
(2) A person conducting an antique/secondhand business shall store all used articles in
either a building or an enclosure surrounde9 by a solid wall or painted board fence at least
six feet high and of such character as to prevent view of the used goods or articles from
without the property.
(3) The wall or fence shall be maintained in a good condition and in good repair at all
times.
(4) As used in this section, to store or storage is that supply of used articles that is set
aside for or awaiting future sale. The requirements of this section do not apply to the
display for sale of used articles or goods for periods of time not exceeding 24 consecutive
hours.
Attachment 3
Page 2
1671 N 18TH STREET
SPRINGFIELD, OR 97477
541-726-9813
April 22, 2007
i 0: Jerry D. Smith
Chief ofPoJice
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frequently gel people trading in 2-3 items totaling under $20.00 Any clariiicatioll'vvould
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I:'Cl..p. LJ~tVI~ u.u;:, \'\'a~ Ul~tatC.t,J. ~':UI. \...-v1uIJau)' altc:a.uy I.C::y'Ull'C~ u;:, tt.J IJdVv a vauu'1-Hl\':u..; 1.1J
-f-' 1 () 1 I 1 .... ~ 1 ~. I., . I ... ,
trom a person 1 () or Older wnen tra111ng mau Hems, so navmg to use me \Vensite
reporting for all trades does len.gthen the titne ,.ve h,a've to rn.ake I)e{;-p!.e \~/cdt in line.. Vie
\:v'ould also like to request discussion of the amount of items recovered since this program
I."" [...,..". :_ _I r.n" "" "-._ 1.",. i; nnn ..1,: .-, ,-,I..~>> l..l I. ,.I.~ ;~ ...1.-...., ~~.:_: ~ ~ :.c ..I. ,_ ~_~...~."" ;" ~ ~+n" liT>
1.1a.~ l1CCl1 III lJI Q\,.. v=- a;., .....'vc tJCIIC\'C U.l1~ ~,11\,}UIU 11~11) tIt UCtv.lltll1ttllb 11 tnc iJ1\J1;-.latll t~ ~t\..,tUa:'l)'
. . .
neipmg.
\\!e ap.'preciate th.e efforts y'OU are 'puttin,g f!~Hth t.c; gath.er inrHlt fn.:;rr:. participati'ng.
businesses like ours. Overall ,ve hope that this program wiIi discourage people from
tiading stolen 'merchan,dise.
Thank you,
Gina C"ornelius
0+'"';,".r::~ r):t'P;-.A"~--,~"
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l...iarne l.razy
ATTACf.IMENT 4 - PAGE 1
G&S Buyers, Inc. D.RA. Ace Buyers of Springfield
Steve A. Tindall Jr., President
Gerald L. Upshaw, Vice President
195 S. 14th Street, Springfield, Oregon 97477
Phone: (541) 988-0488
Fax (541)988-9697
May 4, 2007
Jerry D. Smith
Chief of Police
Springfield City Council
Springfield, Oregon
Mr. Smith & Springfield City Council
Thank you for your letter concerning BWI and asking for input regarding it's use. Your letter
states "Both the diy of Eugene and Lane County have passed ordinances regarding the
Electronic Reporting through the use of Business Watch International. Our information is that
the transition has gone smoothly. " Have you talked with users of the program? Who and how
many are using the program? I have only heard of two in Eugene and one in Glenwood. The
person I talked with that is using the BWI program said there are many problems with the
information being corrupted. See exhibit #1 Letter from Lane County Sheriff, Russel E. Burger
Please provide us with a copy of the proposed ordinance or advise where we may obtain a correct
copy. There have been many changes spoken of so the final draft is quite possibly different than
what we have!. Will we have a chance to address the council? The following is a list of our
concerns, not necessarily in order of importance.
1. The DCBS has recently forced all Consignment/buyback stores to obtain a Pawn License
(ORS 726). The Pawnbroker laws contain certain language on reporting to the police(726.285).
Does BWI meet those requirements?
2. The DCBS does allow the Pawnbrokers to pass through governmental charges such as
background checks for firearms (726.395). Under (726.390) (4) "Except as provided by law, no
further or other charge or amount whatsoever may be charged, contracted for or received in
addition to the interest provided for in this section. "
This seems in conflict with your proposals with BWI. I have asked if this is a cost we may pass
through to the customers. I asked about how much and ifwe could add our costs to the BWI
charge. We asked if the charge could be an up front charge? Other wise the pawnbroker would
have to pay the charge on defaults! The question is under review now by the DCBS on whether
( any charge at all could passed through. The question is whether "Except as provided by
law "would allow this charge to be passed on to the customer.
3. As Pawnbrokers we are required to meet federal standards, regarding Privacy, Truth in lending
laws, The Patriot Act, the Terrorist Database, The Bank Secrecy Act, Anti-Money Laundering.
And others I am not aware of yet. Does BWI have these capabilities? See Exhibit 1 "Are your
Pawn Transaction Reports Public or Private? "
ATTACf. [MENT 4 - PAGE 2
4. There is much concern if the ordinance will in fact help police profile our customers. If there is
litigation concerning profiling or privacy who will be responsible? I certainly hope not us, we
were just following the law!
5. During a meeting at police headquarters with Chief Smith he expressed doubts ~hether this
ordinance will help it's #1 goal of returning stolen property to it's owners. If the police chiefhas
doubts shouldn't we? With the cost of and lack of, police now who will look for the stolen
property?
6. If this ordi,nance is enacted please consider limitations on what has to be reported. Someone
with $20 worth of CD's Video Games or movies will be charged 10% for the transaction! Is this
fair? I would hope you would consider exempt items as they do in Portland.
7. Will all stores that buy sell or trade secondhand merchandise have to use BWI? There are
stores now buying used movies, games and antiques that are not considered secondhand stores.
Will these stores have to comply with this ordinance? I certainly hope this will not be selectively
enforced. I can only hope from a caring city like Springfield will keep a level playing field for all
it's businesses.
8. This appears to be another pass through tax, if not on the business then on our customers. Our
customers are going to be hurt by an unfair tax on the working poor, these people often need $50
for a tank of gas or food. Just think of what a $2 extra charge means to them!
9. Why would we send all of our information out of country? I know there are companies here
that provide the same service. In fact Mr. Smith, after the meeting at police headquarters, talked
by my cell phone with the manager of our Albany store about how we electronically transfer
police records to the Albany Police Department. We suggested we could do the same here and at
no cost.
Last, we believe this is a bad idea for our customers and us. We can see very limited benefits and
a lot of possible problems. We will continue to help the police and the City of Springfield with
responsible police reporting!
Stephen A. Tindall Jr.
President, G&S Buyers, Inc.
DBA Ace Buyers of Springfield
Gerald L. Upshaw
Vice President, G&S Buyers, Inc,
DBA Ace Buyers of Springfield
ATTACf.IMENT 4 - PAGE 3
Are Your Pawn Transaction Reports Public or Private?
By Ric Blum
Ohio Loan Co., Inc.
Dayton, Ohio
BIG CITY DAILY NEWS
Possibly stolen Items Now Listed Daily
As part of our continued effort to thwart crime in Big City, this newspaper will be running
a daily column to help those residents who have had the misfortune to have had some
personal property lost or stolen. As a public service, the Big City Daily News will be
publishing a list of all property that has been pawned or sold to local pawnshops within
the county on the previous day. We urge you to check this list for anything that could
remotely resemble your loss. If you think that you see something that you may have lost,
please go directly to the pawnshop listed and demand that they show you the item. Your
efforts will greatly help our Big City Police Department and let pawnshops know that we
will not put up with their hiding behind the U.S. Constitution anymore.
Item
TV, Color
Handgun
Ring, Mans
VCR
Brand
RCA
S&W
Model
25T12
10
14K YG
Samsung VC-984
Serial Number Pawner
3265487 Smith
K080853 Brady
% ct. dia Brooks
589452114 Henry
Pawnshop
E-Z
E-Z
E-Z
E-Z
~~~~--~-------------------------------------------
Stereo System
Sam's
Watch
Radio/Cass
Chain, Rope
Craig HS1003 1441189
Smith
Uncle
Longines Yellow
Fisher PH-D380 U498846
14K YG 12.5 grams
Reid
Moore
Martin
Uncle Sam's
Uncle Sam's
Uncle Sam's
--------------------------------------------------
Camera
Cash
Video Game
Ring, Ladies
ToolBox
Pentax
SF1N
506417
Jackson Fast
Nintendo Gameboy none
10K YG 7 sm dia
Craftsman Red mech. tools
Franklin
. Smith
Hook
Fast Cash
Fast Cash
Fast Cash
Do not laugh, you could see this In tomorrow's newspaper.
Or, how about this true scenario. A pawnbroker called me with a problem the other day.
The manager from a local RTO came into the pawnbroker's shop and bragged to the
pawnbroker that he knew all the pawnbroker's best and most regular customers. He
went so far as to give the pawnbroker a sampling of names. The RTO manager also told
the pawnbroker that he makes more loans and higher dollar loans than the other two
pawnshops in town. The pawnbroker asked WHERE did the RTO manager get this
information? The RTO manager replied that every day he goes to the police department
and asks to look through all of the pawn transaction reports. The police gladly comply.
Upon hearing this, the pawnbroker called the police, who promptly referred him to the
ATTACf. IMENT 4 - PAGE 4
City Attorney. The City Attorney said that the pawn information reported to the police .
department was, in his opinion, PUBLIC RECORD.
Then there was the case of the. pawnbroker who went to the local police department and
asked to look through the pawn transactions. Since he was, after all a pawnbroker, the
police obliged him. What was this pawnbroker looking for? He was busy making a list of
all the high dollar pawners at the other pawnshops in town. After he had compiled his
master list, he went back to his own pawnshop and wrote each pawner a nice letter
introducing himself and offering to make them loans equal to or greater than the loans
that they are now receiving from the other pawnshops.
You do not think that this can happen? The Fort Lauderdale based, Sun-Sentinel, a
daily newspaper in Florida, recently published a series on pawnshops in Broward
County. To say that the series was unkind to pawnbrokers would be an understatement.
Besides expending the time and effort that went into this travesty, the Sun-Sentinel did
something that no one else (to my knowledge) has ever done. They publicly printed
pictures of frequent pawners along with a personal profile and a list of the items that
each had pawned. That is correct. Picture, name, number of pawnshop visits, sample of
pawned items, employment (or lack thereof), criminal record, names of pawnshops
frequented and a current status for each pawner. The Sun-Sentinel did admit that this
practice could no longer be done because of a recent change in Florida Pawnbroking
Statutes that exempt pawn records from Florida's Public Records Law,
Now I am not defending these particular pawners or any other pawners who may be
pawning items for which they do not have title. We should all be able to make a decent
living without dealing with these people. But how would your other pawners view this?
Will they think that there may be a day when they may see their own pictures in the
newspaper, branded as a 'pawner'?
Most pawnbrokers like to tell their pawners that all loans are confidential. Many even
advertise confidentiality. Is this really the case? Yes, that may be our intentions, but what
happens to the information that we are all required to report to the proper law
enforcement agency after it leaves our hands?
What about downloading? This is the latest and greatest way to get pawn information to
i law enforcement in the easiest and fastest manner. Maybe it is; but what else is being
done with this information? Is it being used for traffic violations? Outstanding warrants?
Pawner profiles? Is the IRS being given our pawners' social security numbers?
Pawnbrokers do riot seem to object to supplying law enforcement with the required
information pertaining to pawn transactions, including a complete description of the
items pledged, brand, model, serial number, karat, weight, color, and distinguishing
marks; along with the date, time and ticket or transaction number of a pawned item. It is.
the personal information that relates to the pawn transaction that brings up the possible
breach of confidentiality. .
According to the Federal Reserve Board, pawnbrokers are considered a financial
institution. That is why pawnbrokers must comply with Truth-in-Lending. If that is the
case, then pawnbrokers should also fall under the Right to Financial Privacy Act of 1978
that the federal government extends to all financial institutions. This act states in 12USC
3402, that "no Government authority may have access to or obtain copies of, or the
ATTACf.lMENT 4 - PAGE 5
information contained in the financial records of any customer from a financial
institution." The next section ofthis act, 12 USC 3403(a), states "No financial institution,
or officer, employee, or agent of a financial institution, may provide to any Government
authority access to or copies of, or the information contained in, the financial records of
any customer....." It seems to me that many state and local laws are in direct
contradiction to federal statutes.
To further illustrate this point, again on a federal level, the federal Freedom of
Information Act (FOIA), 5 USC 552 (b) (4) (1988) contains a similar exemption for
disclosure. Note -- this is an exemption for disclosure. The FOIA was written for the
purpose of making information available to the public. Even though this Ad was
designed to open government possessed information, the authors had the foresight to
realize that some information should not be open to the public.
What we are looking at in the FOIA are exemptions to the Act, or, things that should not
be made public.
~ Exemption 4 of the FOIA restricts information that includes "trade secrets and
commercial or financial information obtained from a person [that is] privileged or
confidential." If this information was generated by the government, it cannot fall within
this exemption. However, the term "person" is used here as elsewhere in the FOIA, and
is broadly construed to include a wide range of entities, private corporations and the like.
Cases interpreting FOIA's Exemption 4 have found the following information to be
commercial or financial information: business sales statistics; customer and supplier
lists; profit and loss data; overhead and operating costs; and information on financial
condition.
Requested records may al$o be considered "confidential" within the meaning of this
exemption if their disclosure is likely to either impair the government's ability to obtain
necessary information in the future, or cause substantial harm to the competitive position
of the person from whom the information was obtained. It is easy to see why Exemption
4 is sometimes called a "reverse FOIA" action.
Exemption 6 of the FOIA applies to "personnel and medical files and similar files the
disclosure of which would constitute a clearly unwarranted invasion of personal privacy."
This exemption reql,lires agencies and courts to balance personal privacy interests
against public interest in disclosure when the record information at issue can be
identified as applying toa particular individual.
The information contained on a typical pawn ticket or police transaction report would fit
into many of the above mentioned categories. As I have stated previously, pawnbrokers
in general. are not opposed to the current system of reporting that has been established
and is now in place. They are concerned. with the potential abuse of this system. A
system whose ideals were to allow law enforcement agencies to check on the items
pawned first, not the pawner first and the item second.
If it is decided by someone, a city attorney, a law enforcement agency, or whomever,
that all information furnished to the law enforcement agency is public record,
pawnbrokers may decide to edit some of this information. A law enforcement agency
would then have to request more information about a particular pawn transaction, e.g.,
"Who pawned this item?" Most pawnbrokers would not have a moral or legal issue with
ATTACf. IMENT 4 - PAGE 6
disclosing that particular pawner's personal information to the law enforcement agency
for further investigation; This would not be the same thing as subjecting all of our
pawners to public
scrutiny.
Many pawnbrokers could even tolerate disclosing all pawners' personal information to a
law enforcement agency, provided that this information was to remain confidential and
the agency would only use this information with regard to the task at hand, checking
items that were pawned or sold.
The underlying problem is that many law enforcement agencies and state and local
governments do not share oiJr views that pawn transactions should be confidential and
not become public information. Until this matter is resolved or a compromise is reached,
there will continue to be fear on behalf of all pawnbrokers that the information we supply
to law enforcement may fall into the wrong hands.
ATTACf.IMENT 4 - PAGE 7
FROM :
FAX NO,
Feb, 12 1999 11:11PM P3
Lan~1 County Sheriff's Office
R.ussell!:. Burger, Sheriff
November 21, 2006
Dear Used Merchandise Dealer.
LIII18 County ancf the City of Eugene have recently amended their Used Merchandise
Dealer onifnances to make ihem mnsJstent and streamlined. The amendments to the
ordinances InclUde moving from a manual reporting system to an automated, electronic
reporting system, which wiD change tho way you cummtJy I8pOrt your buBiness
tnilnsacUons from writing them by hand on paper to recording thom in a softwaro ..m
via CQmputer.
-.- '..... i' ., ..... _.
i
I However, there continue to be questlona from used merchandise dealers related
. t to the viability ~ the vendor chosen by the City Of Eugene to record automated
transactions. The City of Portland either has already, or will soon be soliciting
Proposels for a regIonal automated reporting system. One of the Oregon State
Attorney General's legislative concepts is a statEWlide automated reporting
system, and ,most recently the State of Oregon sent full-servlce secondhand
stores throughout the state a letter demanding that they convert to pawn shops
or become exclUSively buy and sell stores.
Until these issues are resolved, and until we have a cleer pletuna of the future of
automated reporting, I \YOUld like to delay the Implementation of mandatory
: automated reporting in unincorporated Lane County until further notice.
!
: In the meantime, please continue to record your tranlBdions manually. Ustecf below for
: your infonnation are the most significant changes to th. lane County and Eugene Used
. Merthandise Dealer ordinanoas:
I
.~ .'-'. --.-. ,------""---.
)> Mandatory use of electronic reporting will be required for aU businesses that meet
the criteria of a used merd1endlse del!Jer beginning on January 1, 2007, _
(Oelaved for stores in unincol'Domt8d Lane Countv u~1 further notJ~).
.. 'j.:' The.On;fm.nce elimin.. 1he requirement that a business obtain a secondhand
business license.
)- A fee system has been developed to 8Upptement the cost Of adminJstering the
electronic reporting system program. However, the Board of County
CommissIOners has ordered that the Sheriff's Office pay the annual fee for used
merchandise dealers in unincorporated Lene County. See Attachment 4rB"for
more InformatiOn on the fee sysIItm.
o Fees are based on each store's regulatad transactions from the previous
carenclar year. Fees are established on a tiered system, WIth a minimum
amuaJ fee of $200.00 and a maximum fee of $700.00. Each sto/'8 wiD be
,
i
I
I
I
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.1 " . ,.. - HATTACf.IMENT 4 - PAGE 8
---- --"
FROM:
FAX NO,
Feb. 12 1999 11:11PM P2
t
\.
'.;
\~
July 1 - June 30 of each year. The Sheriffs Offlce will be responsible for
paying your SMuaI t.. when you begin automated reporting since you
are located in unincorporated Lane County.
If you have any questions Ittgardlng the changes to the ordJnance that may affect your
used merchandise business, please contact me or the foUowing indMduaJ:
Jackie MikaJonls, Management Analyst - (541) 682-4115
Sincerely, ..
~~~,E3~
\,
\.
\
Russel E. Burger
Sheriff
: Attachments:
i -AW - Used Merchandise Dealers Ordinance
: -8W - Used Merchandise Dealers EJectronlQ Reporting System Fee Schedule
CC; Lane County Board of Commissioners
Eugene Police Department
Dave Williams, County COunsel
I,
!
,
:1
,I
I
ATTACf.IMENT 4 - PAGE 9