Coon Rapids council approves gas prepay ordinance
by Peter Bodley
Coon Rapids has become the first city in Minnesota to require prepayment of gasoline at stations in the city.
On a 5-2 vote Tuesday evening, the Coon Rapids City Council adopted the prepay ordinance, which goes into effect Aug. 1.
Voting for the ordinance were Councilmembers Denise Klint, Melissa Larson, Paul Johnson, Bruce Sanders and Scott Schulte.
Opposed were Mayor Tim Howe and Councilmember Jerry Koch.
Prepayment can include paying by credit card at the pump or going inside and paying cash before the pump is turned on.
But the ordinance does have an exception to the prepay requirement offered by Sanders and amended by Schulte.
That states, “It is an exception… if business owners enter into a civil agreement with customers, pursuant to which customers may activate a fuel pump prior to payment.
“Such an agreement shall include identifying information of the customer that may be used by the business owner for seeking compensation if the appropriate civil court should the customer fail to pay for fuel after activating the pump.”
Police Chief Brad Wise, who proposed the prepay ordinance, calls the measure a crime prevention tool because of the spate of no pay/gas drive offs at Coon Rapids retail fuel businesses – 492 in 2010 and 481 in 2011, representing almost 20 percent of part one crimes reported in Coon Rapids, he said.
Responding to drive off reports has also been a drain on police resources and led to a spike in the city’s crime rate, Wise said.
“Officers responding to this number of gas thefts imposes a significant cost to our citizens, both in terms of time lost for officers to address other critical public safety needs, but also in terms of the negative impact such statistics have on our reputation as a safe place to live and work,” he said.
And Wise said that 15 percent of the gas thefts in 2011 were by people in vehicles with stolen license plates.
“The police department has reached out to retail fuel establishments since 2009 in an effort to reduce those thefts reported; however, no meaningful solution has been found.”
According to Wise, since the council began considering the prepay ordinance, the number of reported gas no pays has dropped significantly.
Prior to considering the ordinance for adoption Tuesday, the council had a work session Jan. 23 at which almost all gas station owners/operators spoke in opposition to the proposal, offered alternatives, including a civil process to deal with gas no pays and raised concerns about loss of business and higher costs in credit card fees they would have to pay.
The council was told that the jump in credit card use caused by a prepay ordinance would increase business costs because each time a credit card is used there is at least a 2 percent fee plus a transaction fee.
One gas station owner estimated that the increased credit card fees would cost him some $200,000 a year, a lot more than the loss through no pays.
In addition, bills have been introduced in both the Minnesota Senate and House to change the language of the drive-off law.
Instead of having to call police when there is a theft of gas incident, the clerk/cashier would note the make, model and license plate of vehicles at each pump before allowing the driver to pump gas.
Then if there is a no pay, the employee will certify and sign an affidavit and a notice of non-payment will be sent to the owner of the vehicle.
If the owner does not pay or respond within 30 days, then the police would be notified, as they would be in the event the license plates on the vehicle had been stolen.
The council was also told Jan. 23, that meetings have taken place involving a large number of the city’s gas station owners and operators to look at other ways of dealing with the no-pay issue, besides the legislation.
The discussion Tuesday evening was confined to the council, which debated the issue for an hour before taking a final vote.
According to Howe, the council has to weigh the public safety and crime rate reasons for the ordinance against the negative impact on the businesses through the increase in credit card fees and the loss of business from people choosing to go to gas stations in other cities where there is no prepay requirement.
He would prefer to table the ordinance to give the gas station owners/operators a chance to put their proposals into effect and to see if the proposed legislation becomes law, Howe said.
And he said the exception to the ordinance was a “terribly slippery slope.”
But Klint responded that it will be up the business to make a decision on exceptions to the prepay.
Koch was not interested in “cleaning up” the ordinance with the exception; he opposed the entire ordinance, he said.
He would support the ordinance if it was a “public safety panacea,” but he did not think it was and he did not feel threatened or unsafe without prepay, Koch said.
According to Johnson, the council has to act because of the high number of gas drive offs and the resulting strain on police resources.
He did not think the legislation would pass the House and Senate given the short time available and the other issues that are before the Legislature, Johnson said.
Koch did not see why the legislation would not pass with the bipartisan support it has and he wanted to give businesses a chance to find a solution to the drive-off issue, he said.
“They deserve more time,” Koch said.
And while Koch likes to see Coon Rapids be the first in the state, this is not one of those issues, he said.
But Klint said the police department has been trying for years to work with gas station owners/operators on the gas drive-off problem, but without any cooperation.
“Crime prevention is what we are trying to accomplish,” she said.
“We have to look at what’s best for our city, not worry about other cities.”
“Crime and public safety are what it’s all about.”
Larson agreed with Klint. “It’s still a crime whether it is dealt with civilly or not,” she said.
And Larson said she had a problem with tabling the ordinance because she did not think the gas station owners/operators came up with a viable solution in their presentations to the council Jan. 23.
When Schulte sold gas at his Hi-Ten Service Center business – he does not now – most of his customers prepaid and he thought that was common, he said.
And while he has heard the public sentiment opposed to prepay through phone calls and e-mails, he believes that gas no pays are a public safety problem that the council has to address, Schulte said.
And in other parts of the country where prepay has become law, gas stations have not lost business from people not going into the store after pumping gas, he said.
According to Sanders, given the number of drive-offs, the council “has to tighten things up and this is the way to go.”
What impacted Sanders was a real estate company website marketing a home in Coon Rapids, which showed a graph of the city’s crime rate and the impact that gas thefts have had on that, he said.
“Coon Rapids stuck out like a sore thumb,” Sanders said. “That was significant.”
Nothing in the ordinance precludes people from paying at the pump with their credit card as some people he has spoken with have suggested, he said.
“I’ve been paying at the pump for years,” Sanders said.
The ordinance before the council had a June 1 implementation date, but Howe asked that the date be pushed back to Aug. 1 to give gas station owners/operators time to get the needed equipment in place to comply with the ordinance.
“June 1 was no magic number for me,” said Schulte.
Under the adopted ordinance, any person or business establishment that violates any of the terms is guilty of a misdemeanor.
According to City Attorney Stoney Hiljus, there is technology available to gas stations that would allow customers to swipe a driver’s license, not necessarily a credit card, to activate the pump.
In his research on the issue, Hiljus came across the National Association of Convenience Stores website which states that a company, Pump-on LLC, has developed patented technology by which a cash customer can use their driver’s license at the pump, where basic identification information is read, to authorize pumping gas.
If customers fill up and fail to pay, their names are turned over to police, according to the National Association of Convenience Stores website.
This technology has been used by retailers in the country since 2007 and in Tulsa, Okla., and Kansas City gasoline theft has been cut to a trickle, the website states.
Peter Bodley is at email@example.com