Code of Ordinances Amendment - Title 4 Business License RegulationsTHE CITY OF
Dui
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
band
AI- America City
'I'll®,
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2007 • 2012 • 2013
SUBJECT: Amendments to City Code §4 -6A -7, Pawnbrokers and Secondhand
Dealers and §4 -6B -7, Junk Dealers and Auto Salvage Dealers
DATE: September 11, 2013
Assistant City Attorney Maureen Quann is recommending amendments to Title 4,
Business and License Regulations, Chapter 6, Pawnbrokers and Secondhand Dealers;
Junk and Auto Salvage Dealers, Article A, Pawnbrokers and Secondhand Dealers,
Section 7, Proof of Financial Responsibility; and Article B, Junk Dealers and Auto
Salvage Dealers, Section 7, Proof of Financial Responsibility. Currently, the ordinances
state that pawnbrokers and secondhand dealers and junk and auto salvage dealers
may provide proof of financial responsibility by either providing proof of the existence of
a liability insurance policy or by posting a bond.
The proposed amendments to the ordinances designate that proof of financial
responsibility must be established by posting a bond.
These ordinances were most recently amended March 4, 2013. In administering these
amendments and processing applications since then, it has been difficult for staff to find
an applicable insurance schedule with which the businesses subject to these
ordinances must comply. After further analysis and a meeting between Frank O'Connor
from O'Connor & English Insurance Agency, the City Clerk's Office, and the City
Attorney's Office, it has been determined that the best proof of financial responsibility in
these instances is a bond.
The purpose of the financial responsibility requirement for pawnbrokers, secondhand
dealers, and junk and auto salvage dealers is to encourage reputable and responsible
business ownership and to protect patrons of such business in the event that
merchandise is mishandled at any point during the surrendering, buying and selling
processes.
A liability insurance policy would provide protection to the City, but it would not
adequately provide potential relief for patrons of such businesses. On the other hand,
posting a bond would cost the individual business owner relatively little while providing
significant protection to business patrons. For instance, a fifteen thousand dollar
($15,000.00) bond would cost approximately one hundred fifty dollars ($150.00) to one
hundred seventy -five dollars ($175.00) for the business owner to obtain, and provide up
to fifteen thousand dollars ($15,000.00) annually for payment of claims against such
business owners. Any sums claimed under the bond would be payable to the City. The
City would then pay the business patrons the amount of their claim.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Maureen Quann, Assistant City Attorney
2
THE CITY OF
Dui
Masterpiece on the Mississippi
MEMORANDUM
MAUREEN A. QUANN, ESQ.
ASSISTANT CITY ATTORNEY
To: Michael C. Van Milligen
City Manager
DATE: September 12, 2013
RE: Amendments to City Code §4 -6A -7, Pawnbrokers and Secondhand
Dealers and §4 -6B -7, Junk Dealers and Auto Salvage Dealers
INTRODUCTION
This memorandum presents for City Council consideration amendments to Title 4,
Business and License Regulations, Chapter 6, Pawnbrokers and Secondhand Dealers;
Junk and Auto Salvage Dealers, Article A, Pawnbrokers and Secondhand Dealers,
Section 7, Proof of Financial Responsibility; and Article B, Junk Dealers and Auto
Salvage Dealers, Section 7, Proof of Financial Responsibility. Currently, the ordinances
state that pawnbrokers and secondhand dealers and junk and auto salvage dealers
may provide proof of financial responsibility by either providing proof of the existence of
a liability insurance policy or by posting a bond.
The proposed amendments to the ordinances designate that proof of financial
responsibility must be established by posting a bond.
BACKGROUND
These ordinances were most recently amended March 4, 2013. In administering these
amendments and processing applications since then, it has been difficult for staff to find
an applicable insurance schedule with which the businesses subject to these
ordinances must comply. After further analysis and a meeting between Frank O'Connor
from O'Connor & English Insurance Agency, the City Clerk's Office, and the City
Attorney's Office, it has been determined that the best proof of financial responsibility in
these instances is a bond.
DISCUSSION
The purpose of the financial responsibility requirement for pawnbrokers, secondhand
dealers, and junk and auto salvage dealers is to encourage reputable and responsible
business ownership and to protect patrons of such business in the event that
merchandise is mishandled at any point during the surrendering, buying and selling
processes.
A liability insurance policy would provide protection to the City, but it would not
adequately provide potential relief for patrons of such businesses. On the other hand,
posting a bond would cost the individual business owner relatively little while providing
significant protection to business patrons. For instance, a fifteen thousand dollar
($15,000.00) bond would cost approximately one hundred fifty dollars ($150.00) to one
hundred seventy -five dollars ($175.00) for the business owner to obtain, and provide up
to fifteen thousand dollars ($15,000.00) annually for payment of claims against such
business owners. The City would be the obligee on the bond. Consequently, any sums
claimed under the bond would be payable to the City. The City would then pay the
business patrons the amount of their claim.
RECOMMENDATION
Attached are the proposed amendments to City Code of Ordinances §4 -6A -7 and §4-
6B-7 and a standardized bond form that the City Clerk's Office may provide to business
owners to complete with their surety provider. I recommend that the City Council adopt
the proposed amendments.
MAQ:jmg
Attachments
cc: Barry Lindahl, City Attorney
Crenna Brumwell, Assistant City Attorney
Kevin Firnstahl, City Clerk
Mark Dalsing, Chief of Police
Prepared by: Maureen A. Quann, Esq. 300 Main Street Suite 330 Dubuque IA 52001 563 589 -4381
ORDINANCE NO. 48 -13
AMENDING CITY OF DUBUQUE CODE OF ORDINANCES TITLE 4 BUSINESS AND
LICENSE REGULATIONS, CHAPTER 6 PAWNBROKERS AND SECONDHAND
DEALERS; JUNK AND AUTO SALVAGE DEALERS, ARTICLE A PAWNBROKERS
AND SECONDHAND DEALERS, SECTION 4 -6A -7 PROOF OF FINANCIAL
RESPONSIBILITY, AND ARTICLE B JUNK DEALERS AND AUTO SALVAGE
DEALERS, SECTION 4 -6B -7 PROOF OF FINANCIAL RESPONSIBILITY BY
DELETING THE REQUIREMENT OF LIABILITY INSURANCE
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
DUBUQUE, IOWA:
Section 1. Section 4 -6A -7 of the City of Dubuque Code of Ordinances is amended to
read as follows:
4 -6A -7: PROOF OF FINANCIAL RESPONSIBILITY:
Each licensee must furnish proof of financial responsibility by posting bond in such
amount as determined by the city manager.
Section 2. Section 4 -6B -7 of the City of Dubuque Code of Ordinances is amended to •
read as follows:
4 -6B -7: PROOF OF FINANCIAL RESPONSIBILITY:
Each licensee must furnish proof of financial responsibility by posting bond in such
amount as determined by the city manager.
Section 3. This Ordinance takes effect upon publication.
Passed, approved, and adopted the 16th day of September, -.013.
Attest:
04o
Roy D. Buol, Mayor
EFFECT OF AMENDMENT
4 -6A -7: PROOF OF FINANCIAL RESPONSIBILITY:
Each licensee must furnish proof of financial responsibility either by the existence of a
liability insurance policy or by posting bond in such amount as determined by the city
manager.
4 -6B -7: PROOF OF FINANCIAL RESPONSIBILITY:
Each licensee must furnish proof of financial responsibility either by the existence of a
liability insurance policy or by posting bond in such amount as determined by the city
manager.
OFFICIAL
PUBLICATION
ORDINANCE NO. 48-13
AMENDING CITY OF
DUBUQUE CODE OF
ORDINANCES TITLE 4
BUSINESS AND LI-
CENSE REGULA-
TIONS, CHAPTER 6
PAWNBROKERS AND
SECONDHAND DEAL-
ERS; JUNK AND AUTO
SALVAGE DEALERS,
ARTICLE A PAWN-
BROKERS AND SEC -
ONDHAND DEALERS,
SECTION 4-6A -7
PROOF OF FINANCIAL'
RESPONSIBILITY,
AND ARTICLE B JUNK
DEALERS AND AUTO
SALVAGE DEALERS,
SECTION 4-6B -7
PROOF OF FI.NANCIA1.
RESPONSIBILITY BY
DELETING THE RE-
QUIREMENT OF LIA-
BILITY INSURANCE
NOW, THEREFORE,
BE IT ORDAINED BY
THE CITY COUNCIL
OF THE CITY OF DU-
BUQUE, IOWA:
Section 1. Section 4-
6A-7 of the City of Du-
buque Code of Ordi-
nances is amended to
read as follows:
• 4 -6A -7: PROOF OF FI-
NANCIAL RESPONSI-
BILITY:
Each licensee must
furnish proof of finan-
cial responsibility by
posting bond in such
amount as determined
by the city manager.
Section. 2. Section 4-
6B -7 of; the City of Du-
buque Code of Ordi-
nartees is . amended . to
read as follows:
4 -6B -7: PROOF OF FI-
NANCIAL RESPONSI-
BILITY:
Each licensee must
furnish proof of finan-
cial responsibility by
posting bond in such
amount as determined
by'the city manager.
Section 3. This Ordi-
nance takes: effect
upon publication.
Passed, approved,
and adopted the 16th
day of September,
2013.
/s /Roy D. Buol, Mayor
Attest: /s /Kevrg S.
Firnstahl City�Clerk
published officially in
the Telegraph Herald
newspaper on the 20th
day of September,
2013.
/s /Kevin S. Firnstahl,
City Clerk
1t 9/20
STATE OF IOWA {SS:
DUBUQUE COUNTY
CERTIFICATION OF PUBLICATION
I, Suzanne Pike, a Billing Clerk for Woodward Communications, Inc., an Iowa
corporation, publisher of the Telegraph Herald,a newspaper of general circulation
published in the City of Dubuque, County of Dubuque and State of Iowa; hereby
certify that the attached notice was published in said newspaper on the following
dates: September 20, 2013, and for which the charge is $16.99.
Subscribed to before me, a No y Public in and for Dubuque County, Iowa,
this j3 ■day of z , 20 f 3
Notary Public in and for Dubuque County, Iowa.
(MARY K. WESTERME`'2F1
Cemm!ss!onNumb f er 85