Up until 2009, pawnbrokers and secondhand shops were regulated under Chapter 5.36 of the Municipal Code, while precious metal and gem dealers were regulated by Chapter 5.40. In February 2009, Ordinance 5444 was passed, adding criminal background checks to the process of licensing business including pawn shops and precious metal and gem dealers. During the course of passing the ordinance, concern was raised with the background checks on precious metal and gem dealers and with the effects of licensing on transient shows. The City Attorney and Police Chief met and came up with eight Options for Precious Metals and Gems Licensing. The City Council opted for repealing Chapter 5.40 entirely with Ordinance 5487. There were concerns about criminals taking advantage of the dealers no longer having to keep records, as seen in this Rapid City Journal article, but the general feeling was there was little sale of stolen property to the dealers.
Precious Metal and Gem dealers operated without licensing or record keeping for four years. In 2013, Assistant City Attorney Ryan Sole started working with law enforcement, private citizens, and industry representatives for their input in crafting Ordinance 5938; in a memo to the Legal and Finance Committee, he explained how the ordinance would allow the city to again license precious metal and gem dealers, as well as update the language in Chapter 5.36. The changes can be seen in a red-lined version of the Ordinance. Besides extending the definitions of the chapter to include precious metal and gem dealers, the ordinance added a requirement to photograph items purchased and hold them for five days, to aid the police in recovery of stolen property (Chief Allender also wrote a letter supporting the ordinance for its aid in finding and recovering stolen property).
Passing Ordinance 5938
Ordinance 5938 was introduced at the June 12, 2013 meeting of the Legal and Finance Committee. Based on input from local pawnbrokers and anticipating more discussion, it was continued to the June 26 meeting. At the June 26 meeting, several local business owners and hobbyists spoke on the ordinance, mostly about the added restrictions. The measure was continued to the August 14 meeting. Discussion continued at the August 14 and August 28 meetings, with the ordinance sent to the full City Council after each meeting.
The full Rapid City Council first addressed Ordinance 5938 at its August 19 meeting. Assistant City Attorney Ryan Soye had written a memo explaining changes asked for by the Legal and Finance Committee. One change would have eliminated photographing of wedding bands, but the City Council chose not to keep this exception and passed the ordinance for its first reading. The ordinance received its second reading on September 3rd, at which time a sunset amendment was attached, requiring the ordinance to be re-examined in a year. With the amendment approved, the ordinance was given a second reading and passed into law.
During the life of the ordinance, many pawnbrokers and jewelry sellers offered suggestions and comments. The owner of Fair Deal Pawn and Gun provided a lengthy public opinion, both on the effects repealing Chapter 5.40 had on his business, and the nature of crime. Jewelry store owners weighed in early in the process. Other comments can be found the minutes of the City Council and Legal and Finance Committee.
The archive contains additional material on this subject, pulled from news sources and government documents.