AN ORDINANCE relating to pawnshops; limiting the number of pawnbroker endorsements that may be issued each year commencing January 1, 2002; and amending the Seattle Municipal Code Section 6.288.065.

BE IT ORDAINED BY THE CITY OF SEATTLE AS FOLLOWS:

Section 1. Seattle Municipal Code Section 6.288.065 is amended as follows:

6.288.065 Pawnbrokers Limitation on numbers.

A. From January 1, 2000 until January 1, 2002 no No more than two (2) Pawnbroker endorsements shall be issued in each calendar year for the conduct of pawnbroker businesses at locations not licensed for pawnbroker activity on December 31st of the immediately preceding year.

B. Notwithstanding anything contained in subsection A of this section, no Pawnbroker endorsement shall be issued for the conduct of a pawnbroker business at a location not licensed for pawnbroker activity in the previous year if, on the March 30th next preceding the effective date of the license for which the Pawnbroker endorsement is sought, the number of locations licensed for pawnbroker activity exceeds one (1) for every fifteen thousand (15,000) inhabitants of the City, as reflected in the then most current final population figures available from the Washington State Office of Financial Management or its functional successor. Subsections A and B shall not restrict reissuance of a Pawnbroker endorsement to a new location.

C. The Chief of Police shall adopt and publicize a process for allocating new Pawnbroker endorsements by chance if there are or there are reasonably expected to be more new applicants in a year or other pertinent time period than the number of new endorsements permitted.

D. The Chief of Police shall report the status of the City's program for tracking pawn transactions and monitoring pawnshop operations to the City Council's Public Safety Committee or its functional successor on or before June 1, 2001 2005.

Section 2. It is the express intention of the Seattle City Council that this ordinance shall apply retroactively to all pending applications for pawnshop endorsements, and that no pawnshop endorsements shall be issued except in conformity with the terms of this ordinance.

Section 3. This ordinance shall take effect and be in force thirty (30) days from and after its approval by the Mayor, but if not approved and returned by the Mayor within ten (10) days after presentation, it shall take effect as provided by Municipal Code Section 1.04.020.

Passed by the City Council the _____ day of ____________, 2003, and signed by me in open session in authentication of its passage this _____ day of _________________, 2003. _____________________________________ President _______ of the City Council

Approved by me this _____ day of _________________, 2003. ______________________________________ Gregory J. Nickels, Mayor

Filed by me this _____ day of ____________________, 2003. ______________________________________ City Clerk

03/06/02 (Ver. 1 )

I. Current Status of the Pawnshop Automated Reporting System (PARS)

In 1997, the Property Inspection Unit's PARS experienced a system malfunction that resulted in unprocessed records and an inability to send data to the WACIC and NCIC systems. This malfunction in the system allowed stolen property to go undetected and to be sold back into the community. This same type of malfunction also occurred in 1996. In 1998 the Information Technology Section of the Seattle Police Department contracted with the Excell Data Corporation of Bellevue to design a long-term solution to the above-mentioned problem. In 1999, the new PARS went on line. After six months of working the bugs out, the system has been working as designed since June 1999 to the present time. The customer base has grown from 35,000 names in 1996 to almost 155,000 names in 2002.

II. Workload As It Relates To The Number of Pawn Endorsements Issued

The issue of workload involves many elements that relate to the amount of used goods that are pawned or sold to licensed businesses. In general, the amount of property pawned or sold that turns out to be stolen is proportionate to the number of pawnshops and transactions. As the number of pawnshops increase, the number of transactions increase, and the amount of stolen property recovered increases. The following table shows the increase in the transactions that relate to increases in the number of pawnshops.

Year

# of Transactions

# of Active Pawnshops

1994

60,000

16

95-96

102,440

18

96-97

112,684

20

97-98

123,414

21

98-99

134,144

23

1999

131,562

19

2000

130,000

19

2001

145,410

21

2002

159,252 (1)

23

2003

173,100 (1)

25

2004

186,948 (1)

27

(1) These are the projected increases in the transactions as the number of pawnshops increase.

As of February 28, 2002 there are 25 pawnbroker endorsements that have been issued in the City of Seattle. There are 21 active operating pawnshops in Seattle. In accordance with SMC 6.288.065.B, there are a maximum number of endorsements allowed based on one licensed location for every 15,000 inhabitants of the city. The current population of the Seattle is approximately 540,000. This figure is not much higher than it was in 1997. The ordinance therefore allows 36 pawnbroker endorsements.

Currently, SMC 6.288.065.A limits the number of endorsements that may be issued to two per year to a maximum of 36. SPD is requesting that this limit of two per year be extended into the future until the number of endorsements reaches 36. If the limitation is not extended, it is possible for 15 additional pawnshops to open up in Seattle. At this point in time, that would increase the transaction numbers to somewhere near 262,000. The table below shows the number of applicants that have filed for pawnbroker endorsements each year.

Year

Applicants

Drawing Held

Endorsements Issued

1995

20

July 14,1995

2

1996

48

February 15, 1996

2

1997

40

February 21, 1997

2

1998

37

February 17, 1998

2

1999

42

February 19, 1999

2

2001

16

March 16, 2001

2

Total

203

If 15 endorsements became active shops at one time, the impact on the Property Inspection Squad would be severe.

1. Based on the number of transactions handled in 2001, an increase of 15 pawnshops would drastically increase the caseload for detectives assigned to the Property Inspection Squad. Currently, 1 Sergeant, 3 Detectives, and 2 Administrative Specialists are assigned to the Property Inspection Squad.

2. The data entry process in PARS is not totally automatic. All data entry requires manual editing of the data to correct errors prior to downloading it into the database table. Each entry has up to 44 fields that contain data. This can take as little as a few minutes to as much as an hour or more per batch depending on the number of transactions being downloaded and the proficiency of the pawnshop operators entering the data that goes into the disks provided to the police department. There are a few pawnshops and 42 used goods businesses that do not provide us with a computer disk, but do provide us with handwritten data. This data must be entered manually.

3. Experience has shown that it takes 3 to 4 months of one-on-one instruction involving Property Inspection Squad personnel with each pawnshop operator to get them proficient on correctly formatting data to meet the specifications for data entry into PARS. This process would be overwhelming if 15 pawnshops chose to open their doors in the first quarter of 2002.

4. In addition to the 21 pawnshops that the Property Inspection Squad must monitor, there are also 42 used goods business that buy serialized property and report to us. The Property Inspection Squad must also monitor these businesses and will recover stolen items sold to these stores. There are numerous used goods businesses where we recover stolen property, and these businesses do not report to us. The Used Goods Licenses are not regulated and there is no limit to the number issued

An increase of 50% in the number of transactions processed and number of investigative files worked would, without increased staffing, result in extremely high backlogs of transactions not entered into the system and reduced efficiency in the clearing of detective investigations. This would increase the likelihood of more stolen property being sold back into the community. Additional staffing and possibly more computer equipment would be required to remain current on data entry. The ability of the Property Inspection Squad personnel to keep up with data entry within the 30-day hold requirement would be questionable, even with state-of-the-art hardware and software.

Recommendation

SPD is requesting that the number of pawnbroker endorsements issued be held to two per year until the maximum of 36 endorsements become active pawnshops. This will reduce the impact of the increased workload by spreading it out over at least a five-year period.

Attachment 1

Update on the Pawnshop Automated Reporting System and the Pawnbroker Endorsement Limitation Issue

File:Pawnshop Lottery Update 1