COUNCIL COMMUNICATION

DATE:

02/03/2003

SUBJECT: FINAL READING OF ORDINANCE NO. 2003-O-030

Amending the City of Laredo Code of Ordinances by adopting Chapter 18, Sections 18-2-1 and 18-2-2, games and amusement devices, requiring a permit for establishments operating certain game and amusement devices; requiring payment of fee prior to issuance of permit; repealing all ordinances in conflict herewith and providing for publication and effective date. (As amended)

INITIATED BY:

Larry Dovalina, City Manager

STAFF SOURCE:

Cynthia Collazo, Assistant City Manager

Veronica Urbano, Acting Budget Director

PREVIOUS COUNCIL ACTION:

City Council held a public hearing and introduction of this ordinance on January 27, 2003.

BACKGROUND:

The City of Laredo, a home-rule city, is permitted by state law to regulate and monitor all forms of amusement redemption machines.

An exact amount of amusement redemption machines in Laredo could not be obtained through the State Comptroller’s Office due to the Texas Occupation Code, Subchapter C – Confidentiality of Certain Information, Section 2153.101 – Information from License Application, Part (a) which states “Except as provided by subsection (b), the information contained in a license application is confidential.”

Yet, it is estimated that there is a significant number of amusement redemption machines, which are found in various locations throughout the city. Therefore, further increased regulation and accountability of amusement redemption machines is necessary to monitor any potential criminal activity.

Many cities and counties in Texas have seen an influx of establishments with amusement redemption devices in a short period of time. To date, the cities of Kingsville and Portland, Texas have implemented a permitting fee that aids in the cost of the inspections of these establishments.

Regulation of the land use will be addressed in a separate ordinance amending the land development code at a later City Council meeting.

The City Secretary’s Office would be responsible for the issuance of the amusement redemption machine permit. In addition, City staff would be responsible for the regulation and inspection of these establishments.

FINANCIAL:

With a preliminary count of 1,750 amusement redemption machines, at a permit fee of $25 per machine, this will generate an estimated additional source of revenue of $43,750. The estimated revenue of $43,750 may increase depending on any additional counts of machines.

RECOMMENDATION:

Staff recommends that City Council approve this ordinance.

ORDINANCE NO. 2003-O-030

WHEREAS, the City of Laredo, a home-rule city, is permitted by state law to regulate and monitor all forms of amusement redemption machines; and,

WHEREAS, an exact amount of amusement redemption machines in Laredo could not be obtained through the State Comptroller’s Office due to the Texas Occupation Code, Subchapter C – Confidentiality of Certain Information, Section 2153.101 – Information from License Application, Part (a) which states “Except as provided by subsection (b), the information contained in a license application is confidential”; and,

WHEREAS, it is estimated that there is a significant number of amusement redemption machines, which are found in various locations throughout the city. Therefore, further increased regulation and accountability of amusement redemption machines is necessary to monitor any potential criminal activity; and,

WHEREAS, regulation of the land use will be addressed in a separate ordinance amending the land development code at a later City Council meeting; and,

WHEREAS, the City Secretary’s Office would be responsible for the issuance of the amusement redemption machine permit; and,

WHEREAS, City staff would be responsible for the regulation and inspection of these establishments; and,

WHEREAS, the City Council held a public hearing and introduction of this ordinance on January 27, 2003; and

NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LAREDO, TEXAS:

Section 1: Sections 18-2-1 and 18-2-2: Games and Amusement Devices of Chapter 18, Licenses, Permits and Miscellaneous Business Regulations, of the Code of Ordinances of the City of Laredo, Texas, shall be adopted to read as follows:

18-2-1 AMUSEMENT REDEMPTION MACHINE DEFINED

(A) Definitions.

(1) “Amusement Redemption Machine” – An amusement redemption machine is a skill or pleasure coin-operated machine that is designed, made, and adapted solely for bona fide amusement purposes, and that by operation of chance or a combination skill and chance affords the user, in addition to any right of replay, an opportunity to receive exclusively non-cash merchandise prizes, toys, or novelties, or a representation of value redeemable for those items.

(2) “Coin operated Machine” – A coin-operated machine includes a machine or device operated by the payment or insertion of paper currency or any other consideration.

(3) “Representation of Value” – A representation of value includes a gift certificate or gift card that is presented to a merchant in exchange for merchandise.

(B) Excluded Machines. An amusement redemption machine does not include:

(1) a machine that awards the user non-cash merchandise prizes, toys, or novelties solely and directly from the machine, including claw, crane, or similar machines; nor

(2) a machine from which the opportunity to receive non-cash merchandise prizes, toys, or novelties, or a representation of value redeemable for those items, varies depending upon the user’s ability to throw, roll, flip, toss, hit, or drop a ball or other physical object into the machine or a part thereof, including basketball, skeeball, golf, bowling, pusher, or similar machines.

18-2-2 LOCAL PERMIT FEE FOR AMUSEMENT REDEMPTION MACHINE PREMISES PERMIT

(A) Fee. An owner, operator, or lessee of premises on which an amusement redemption machine is made available to others shall be required to secure a permit by paying to the city an annual inspection and amusement redemption machine premises permit fee of $25 per amusement redemption machine.

Expiration and renewal. Permits issued under Sec. 18-2-1 (a) shall automatically expire on the anniversary date of the issuance of the permit, which has been set at April 1^st for existing businesses, except as otherwise stated herein. Such permit shall also automatically expire if the holder thereof sells, transfers equity, or otherwise disposes of such devices. The City shall not refund any portion of an amusement redemption machine premises permit fee after the permit is issued, nor shall it prorate or reduce in amount any fee due to the City.

(B) Sealing. The City shall have the authority to seal any coin-operated machine located at an establishment for which an amusement redemption machine premises permit fee has not been secured. A $20 fee will be charged for the release of each machine sealed for non-payment of said amusement redemption machine premises permit fee.

(D) Revocation of Permit. The City Manager may revoke any permit to maintain and operate premises on which an amusement redemption machine is made available to others when the licensee has been found guilty by a court of competent jurisdiction of violating any provisions of this article. After such conviction, the license may be reissued if the circumstances leading to conviction have been remedied and the premises are being maintained and operated in full compliance with law and this article. Provided, however, that an owner, operator, or lessee of premises on which an amusement redemption machine is made available to others, who is found to be in violation of this ordinance based on a finding that the number of amusement redemption machines exceeds the number for which the premises is permitted shall be required to pay an amount equal to twice the difference of the original permit fee and the permit fee required for the number of machines actually on the premises.

Section 2: All Ordinances or parts of Ordinances in conflict with this Ordinance are repealed to the extent of such conflict only. Further that all ordinances affecting same shall remain in full force and effect.

Section 3: If for any reason any section, paragraph, subdivision, clause, phrase, word or provision of this ordinance shall be held invalid or unconstitutional by final judgment of a court of competent jurisdiction, it shall not affect any other section, paragraph, subdivision, clause, phrase, word or provision of this ordinance, for it is the definite intent of this City Council that every section, paragraph, subdivision, clause, phrase, word or provision hereof be given full force and effect for its purpose.

Section 4: This Ordinance shall be codified and become effective on March 28, 2003, which is sixty (60) days from the introduction of the public hearing.

PASSED BY THE COUNCIL AND APPROVED BY THE MAYOR ON THIS 3rd DAY OF FEBRUARY 2003.

_______________________

ELIZABETH G. FLORES

MAYOR

ATTEST:

_______________________

GUSTAVO GUEVARA, JR.

CITY SECRETARY

APPROVED AS TO FORM:

_______________________

JAIME L. FLORES

CITY ATTORNEY