Coon Rapids’ prepay gas law in effect Aug. 1
When the prepay gas ordinance goes into effect Monday, Aug. 1, Coon Rapids will become the first city in Minnesota to implement such a law.
Under the ordinance, which was adopted by a 5-2 vote of the Coon Rapids City Council Feb. 21 with an Aug. 1 start date, prepayment can include paying by credit card at the pump, or going inside and paying cash before the pump is turned on.
But the new law does have an exception to the prepay requirement offered by Councilmember Bruce Sanders.
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 in the appropriate civil court should the customer fail to pay for fuel after activating the pump.”
There was strong opposition to the ordinance from most gas operators-owners in Coon Rapids, who at a council work session in late January were given the opportunity to state their case and offer alternatives, which included a civil process to deal with gas no pays.
An unsuccessful effort to scuttle the ordinance was also made at the Minnesota Legislature this past session when bills were introduced in both the Senate and House that would have prevented it from going into effect.
But the legislation was not part of the omnibus transportation bill that emerged from a House-Senate conference committee and was eventually passed by both bodies and signed by Gov. Mark Dayton.
Nor has the city been served with any legal action to try and stop the implementation of the ordinance Aug. 1, according to City Attorney David Brodie.
“We have received no contact on any possible litigation to stop the ordinance,” Brodie said.
Police Chief Brad Wise, who initiated the prepay ordinance as a crime prevention tool to minimize the number of no-pay/gas drive offs from Coon Rapids retail fuel businesses – 492 in 2010 and 481 in 2011 – sent a letter to all gas station owner-operators in the city earlier this month to remind them of the impending ordinance start date and urging them to be in compliance.
In the letter, hand-delivered by Community Policing Officer Terry Thomton, Wise draws the attention of owners-operators to the exception to the prepayment for fuel provision.
“The exception to prepayment or payment at the pump for fuel requires that a retailer know and have on file the name of the customer prior to activating a pump,” Wise wrote.
“This exception was inserted into the ordinance as a method for you to acknowledge your loyal customers.”
But to ensure compliance with this exception, the police department will from time to time conduct spot checks similar to those done to monitor alcohol and tobacco sales, according to Wise.
“Our goal with these checks will be to verify compliance with city ordinance, not to criminally charge cashiers,” Wise wrote.
However, a violation of the ordinance by “any person or business establishment” is a misdemeanor, he wrote.
The intent of the prepayment of gasoline and diesel fuel ordinance is crime prevention, according to Wise.
“Reducing crime in Coon Rapids matters for the prosperity and livability of our city, including our businesses and their employees,” Wise wrote in his letter to the retail fuel business owners/operators.
The number of no-pay calls from gas stations to the police department has dropped off significantly since the debate began at the council level, he said.
According to Wise, the police department has received only 42 drive-off calls so far this year compared with 310 for the same period a year ago.
“Gas stations are not calling police, but people have not stopped stealing gas,” Wise 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, he said.
And 15 percent of the gas thefts in 2011 were by people in vehicles with stolen license plates, he said.
Thomton deliver the letter from Wise to 26 retail fuel establishments in the city.
“Everyone seemed fairly receptive,” Thomton said.
Two had closed, the BP at Crooked Lake and Coon Rapids boulevards and the EZ Stop on Coon Rapids Boulevard, according to Thomton.
When he talked to the EZ Stop owner, Thomton said he was told the business closure was not because of the prepay ordinance, but rather because of the cost of complying with Minnesota Pollution Control Agency (MPCA) underground storage tank requirements.
One fuel establishment, the SuperAmerica located near Home Depot on Main Street, has required prepay since before the city began talking about an ordinance, he said.
Switching to a prepay system is merely a matter of changing the settings on the pump system and the only station that did not have the required pump card reader was the former EZ Stop, Thomton said.
Wise has also penned a letter to the community that has been given to council members when they field calls from residents and will be distributed to city department heads to handle inquiries, he said.
At the work session Jan. 23, gas station owners/operators raised concerns that the ordinance would result in a 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.
Rick Dehn of Dehn Oil in Anoka, which owns Foley Quick Mart, the Marathon service station at Foley and Northdale boulevards, was one of the gas station owner/operators to speak out against the ordinance in January.
Dehn has not changed his position, he said.
While he will not incur any costs switching all his pumps to prepay when none are now, Dehn anticipates losing business because Foley Quick Mart is barely a mile from Blaine, which does not mandate prepay at the pump.
“Customers have told me they are offended by being branded criminals and won’t buy their gas anymore in Coon Rapids,” Dehn said.
Right now, 50 percent of his customers use credit cars to prepay at the pump, while the other 50 percent pump gas, then come into the store to purchase other items and then pay or just to simply pay for their gas, according to Dehn.
Requiring prepay will mean increased credit card use and higher credit card fees that Dehn Oil will have to pay, Dehn said.
“At the low end I estimate that will cost is $7,000 a year, at the high end, $14,000 a year of our gross profits,” he said.
He thinks other retail fuel establishments in Coon Rapids, including the large companies like Kwik Trip and Holiday, will see the same impact, Dehn said.
According to Dehn, drive-offs were never a big issue at his Marathon station, about two a month.
However, the Minnesota Legislature did pass legislation this past session backed by gas station owners/operators that no longer requires positive identification by the employee in a photo line-up to prosecute drive-offs, Dehn said.
It puts in place a civil process, whereby the employee makes a note of the license plate of the vehicle having gas pumped and if there is a no-pay the business sends letter to the license plate owner of record, demanding payment within 30 days, he said.
Response has been good when that has occurred, he said.
Only if payment is not received is the case turned over police for prosecution.
However, Wise said that he has been told by the city attorney’s office that it would be unlikely a case could be prosecuted under those circumstances.
Dehn remains opposed to the prepay gas ordinance and is also confused by the “exception” provision, for which he is seeking clarification from the city, he said.
In the 5-2 council vote to adopt the ordinance, Mayor Tim Howe and Councilmember Jerry Koch voted no. Councilmembers Paul Johnson, Denise Klint, Melissa Larson, Sanders and Scott Schulte voted year.
Peter Bodley is at firstname.lastname@example.org