What is Regulated Industries Division and what do they do?

1. Regulated Industries Division 101The benefits of regulatory enforcementJim ReadyManagerRegulated Industries DivisionCity of Kansas City, MOGerald CountzAssistant ManagerRegulated Industries DivisionCity of Kansas City, MO

2. What is Regulated Industries Division and what do they do? Kansas City Missouri’s Regulated Industries Division regulates those businesses within the community that provide a unique service which require additional laws, rules and regulations to oversee them. Based upon those additional requirements, these unique businesses and their employees are required to obtain specific licenses, permits or certificates prior to serving the public.

3. Businesses overseen by Regulated Industries Division • Liquor licensed businesses • Commercial vehicles • Commercial amusement places • Adult entertainment businesses • Secondary metal recyclers • Short term loan establishments • Businesses that sell tobacco products • Day labor businesses • Tire dealers • Salvage yards

4. How does a business receive a liquor license in KCMO? Various requirements must be met in order for a business to receive a liquor license: • Density study • Location from church or school • Zoning compliance • Retail sales by drink & retail sales by package requirements met • Consent requirement met • Business in good standing • Conditional liquor license may be required

5. How are liquor licensed businesses regulated? Once a license has been issued: • The business is immediately placed on a six month probationary period • The business must be maintained as an orderly place (customer complaints/police reports) • Conduct various types of random inspections to assure ordinances are being followed and investigate any complaints received • Upon renewal of a license (restaurant/tavern), proof of sales through tax receipts is required

6. Commercial Vehicles What types of commercial vehicles are regulated? • Taxicab vehicles (6 passengers or less) • Livery vehicles (6 passengers or less) • Pedicabs & multi-passenger human powered vehicles (pedal hopper) • Sightseeing vehicles (horse driven carriages)

7. Why and how are commercial vehicles regulated? • Missouri Department of Transportation does not regulate vehicles of 6 passengers or less • To provide citizen protection by conducting bi-annual and routine vehicle inspections • By conducting meter checks of taxicab vehicles to ensure the fare is accurate • To assure that ordinances governing fares are being followed (running the meter - not pre-arranging an agreed upon price with the customer) • To assure that credit cards are being accepted • By conducting inspections at KCI to ensure livery and taxicab operators are following the rules • By attempting to eliminate “gypsy” cabs from operating within KCMO

8. Commercial Amusement Places What types of Commercial amusement places are regulated? • Dance halls • Billiard/Pool halls • Bowling alleys • Shooting gallery’s • Skating rinks • Haunted Houses • Amusement parlors or halls

9. Why are commercial amusement places regulated? • To provide for public safety as commercial amusement places are frequented by the public for recreational use • To ensure they are being maintained as an orderly place • To prevent and ensure that alcohol is not being sold or consumed on the premise (underage dance clubs) • To prevent and ensure that Illegal drugs are not being used or distributed on the premise

10. What is an adult entertainment business? • Adult live entertainment business or adult cabaret – a place that features a semi-nude dance, performance or exhibition • Adult motion picture theater • Adult entertainment business – a place where adult media (books, magazines, movies…) or sexually oriented toys or novelties are sold

11. Why are adult entertainment businesses regulated? • Really?!! • To ensure for the public health, safety and welfare by providing neutral regulations governing the conduct of adult businesses • To prevent the exploitation of minors by not allowing them to work in adult entertainment businesses • Studies have shown that businesses providing adult live entertainment are increasingly associated with ongoing prostitution, disruptive conduct & other criminal activity which constitutes a threat to the public peace, health & safety • Studies have shown that regulation of the adult live entertainment industry is necessary to deter prostitution or high-risk sexual conduct to limit the health hazards of specific sexually transmitted diseases (syphilis, gonorrhea, herpes, hepatitis-B and HIV/AIDS that may result) • Regulation of the adult live entertainment industry is necessary because in the absence of such regulation, significant criminal activity has historically and regularly occurred

12. What is a secondary metal recycler? • A secondary metal recycler is any person who is engaged in the business of purchasing, collecting, or soliciting regulated metal property for the purpose of recycling or operates a facility where regulated metal property is purchased or kept for shipment, sale, transfer, or recycling.

13. Why are secondary metal recycling businesses regulated? To help prevent secondary metal theft – ordinances governing secondary metal recyclers include: • Detailed records of transactions including video recordings • 72 hour holding period on purchases of motor vehicles (state law change – 10 years) • Restrictions on certain transactions (cannot purchase utility access covers, historical markers, beer kegs, real estate signs… without proof the seller is the verifiable owner or is an employee, agent, or person authorized, in writing on company letterhead, to sell the item on behalf of the owner: • Amplified restrictions on purchases of catalytic converters and HVAC components (Catalytic Converters - receipt for the removal of the catalytic converter or the title of the car that from which it was removed) (HVAC – purchased from a licensed business or employee & verification form stating components legally removed) • All records maintained onsite for two years

14. What is a short term loan establishment? • A business (other than a bank or a savings and loan association) engaged in providing short-term loans of money of an original term of less than 31 days such as payday loans, signature loans, title loans (to vehicles, boats or other personal property, but not real estate), check-cashing loans, small loans and other similar loans • The payday loan industry is termed by many as “predatory lending”

15. Why should short term loan establishments be regulated? • Seriously?!! • Missouri Legislature passed laws that allow a lender to charge fees and interest up to 75% of the amount of the loan - on a two-week loan that translates into a 1,950% annual percentage rate (APR) which is the highest allowed among the 43 states that have either banned or set APR caps on payday loans. • Since enactment of these laws, payday loans made to consumers average more than 400% APR according to the state’s Division of Finance • The lax payday loan laws in Missouri have made the state attractive to lenders. Among the nine states that border Missouri, only Tennessee has more payday loan locations (1,481) than Missouri (1,275) with the next highest being Kentucky with 785 • The APR allowed by Missouri’s statutes of 1,950% based on a two-week loan of $100 is by far the highest of the nine states that border Missouri. The next highest is Arkansas which allows an APR of 520%. • The Consumer Federation of America says that “payday loan borrowers are typically female, make around $25,000 a year, are renters, and more likely to be minorities than the general population.”

16. Why and how are short term loan establishments regulated in Kansas City, Missouri? The KCMO City Council found and concluded: • That lending and marketing practices of short term loan establishments can result in serious financial hardships to some of its citizens, particularly its elderly and low income citizens, from which they cannot extract themselves, perpetuate poverty and the dependency upon public financial assistance, housing, health care and social services • The proliferation over the past several years of short term loan establishments in certain areas of the city cause or contribute to the deterioration of those commercial and residential areas • The patterns of this proliferation suggest the industry's targeting of low-income citizens who are most likely to suffer financial hardship as a result of the lending practices offered by short term loan establishments • The further regulation of short term loan establishments is necessary for the promotion and protection of the public health, safety and welfare of its citizens and the the city's interests to maintain the quality of its commercial and residential neighborhoods • Short term loan establishments in KCMO must pay $1000 per year for a permit, cannot be located within one mile of another short term loan establishment or pawnshop, and cannot be located within 1,000 feet of a property which has been designated as a landmark or historic district.

17. Why are businesses that sell tobacco regulated? • To ensure that cigarettes are not being sold to minors – Regulated Industries began conducting minor compliance checks in March of 2013 – To date, minor compliance checks have been made at 144 businesses and 47% of those businesses sold tobacco products to minors • To prevent individual cigarettes from being sold to the public • To prevent synthetic drugs from being sold to the public

18. Requirements for individuals who work in regulated businesses • Before anyone can work in KCMO as a driver of a commercial vehicle, work as a waiter, waitress or doorman where alcohol is sold, or work as an adult entertainer or adult entertainment manager at an adult entertainment facility, they must apply for and receive the corresponding permit or certificate and pass a background check • The requirements for passing a background check vary for each industry and are in place to provide for public safety

19. How can a regulatory agency be effective when dealing with violations? Although summonses can be written, Regulated Industries has found it to be most effective by using other methods to deal with ordinance violations which include: • Initial warning • Informal Disposition • Suspension of license, permit or certificate • Revocation of license, permit or certificate

20. Initial Warning • Typically given to any first time offender of a particular violation • A face to face meeting is generally held between the R.I. manager and the offender • The manager discusses the violation with the offender and explains what will happen if there is a repeat violation in the future • A face to face meeting assures that the offender fully understands the severity of the violation, understands what is expected of them in the future and what the punishment will be if there is a repeat violation

21. Informal Disposition • As written in ordinance, an informal disposition is the stipulation, consent order or default, or agreed upon settlement of a contested case between the manager and the violator • An informal disposition works best if you have an ordinance in place to allow for this option • Must have a system in place of adjudicating the case otherwise – a board or hearing officer that can listen to any disputed violation or case • A far superior method of handling violations as opposed to issuing a summons and getting a maximum conviction of $500 - restaurant in KCP&L district • By far the most powerful tool in your tool belt when dealing with ordinance violations

22. Suspension of license, permit or certificate • A suspension allows you to deal directly with the violator rather than going through the court system • Should have set guidelines in place prior to dealing with ordinance violations – example: A second violation of minors purchasing alcoholic beverages = 2 day full closure of business, or, 6 day suspension, or, agreed upon assessment of $1,500, or, hearing for 12 day suspension • The suspension offered should be reasonable and fit the crime – that is a 45 day suspension for a first time sale of alcoholic beverages to a minor would be extreme • Don’t bark unless you can bite – Fully understand the extent of the violation and be confident that the suspension you present is reasonable • Be prepared to have a hearing

23. Revocation of license, permit or certificate • The revocation of a license, permit or certificate should only occur through a hearing before a board or hearing officer • You should only seek a revocation after you have tried on multiple occasions to correct the violations through a suspension or some other sort of disciplinary action – warning, multiple suspensions, probationary period… • Before you decide to move for revocation of a license or permit, reach out to the community and all other possible resources (Police Department, Fire Department, Health Department, Codes Administration…) to see if there are any other ongoing issues with the business • Review your case to make sure you feel that the request for a revocation is reasonable • Make sure you can live with the consequences of losing a hearing to revoke a license or permit – Holiday Convenience hearing

24. What are the benefits of having a regulatory agency • Free up the police department from directly overseeing and dealing with the issues that surround unique businesses • Create experts in house to deal with those unique businesses and fully understand the ordinances that regulate them which leaves them better prepared to deal with the challenges those businesses may present • Provide citizens with a specific agency to answer questions and handle complaints involving those businesses and you have staff readily available to investigate those complaints and have the ability to report back to citizens within a quick time frame • Create the ability to deal directly with the employees and owners of the business without going through the court system

25. Questions