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HomeMy WebLinkAboutEnact Ordinance to Regulate Shoppoing Cats in the City - Contracting for a Municipal Retrieval ServiceREQUEST: SUBMITTED BY: DATE: CONTENTS: Recommendation: CITY OF PALM DESERT DEVELOPMENT SERVICES STAFF REPORT Regulate Shopping Carts in the City by Enacting an Ordinance and Contracting for a Municipal Retrieval Service Gary Rosenblum, Risk Manager May 26, 2005 Business and Professions Code Section 22435-22435.7 By Minute Motion: 1) Approve an ordinance that requires retailers to generate and implement a shopping cart loss prevention and collection system; 2) approve the development and execution of a contract with a shopping cart retrieval service; and 3) approve a business license fee to pay for shopping carts retrieved through the City contractor that is applied six months after the Shopping Cart Loss Prevention Program Ordinance goes into effect, and only if a retailer's own program is not keeping their shopping carts off City streets and sidewalks. Executive Summary: There are shopping carts continually abandoned around the City. The number of carts collected by Public Works averages from 30-40 per week. The main concern with carts is blight, and secondarily public safety and employee safety. Abandoned shopping carts are not homogeneous throughout the City. There are general "hot spots" where carts will continually be abandoned, with occasional carts found in other areas. There are two integrated methods for reducing or eliminating shopping carts from the streets of the City. These are prevention and collection. Retailers are currently completely responsible for choosing the methods for prevention, and collection is also at their option. Implementing strong prevention methods will reduce the number of shopping carts taken off property, but will not eliminate abandoned shopping carts, so retrieval services are still needed. Therefore, the recommendation is to approve an ordinance that requires retailers to generate and implement their own shopping cart loss prevention and retrieval program, and approve a contract for a City shopping cart retrieval service that is paid by retailers through a business license fee assessed only if their own programs are not keeping the shopping carts off City streets and sidewalks. Background: Shopping carts are being continually abandoned around the City. A few stores have contracted with a service to collect and retrieve their carts. All other carts that are not picked up by the service are being retrieved by City employees on an approximately weekly basis. Shopping Cart Ordinance Page 2 of 6 May 26, 2005 The number of carts collected by Public Works averages from 30-40 per week. Resident calls to Code Enforcement or field observations about these carts are forwarded to Public Works, but depending on the day of the call, the actual retrieval may not occur for a week or more because Public Works can only schedule this work one day per week. Carts that are not retrieved quickly become a visual nuisance and are a potential hazard to vehicle traffic, bikes, golf carts, pedestrians and parked vehicles, especially at night. There are times Code Enforcement will move the cart out of a particularly dangerous location, but it remains at that spot until it is picked up by Public Works. While the City has an interest in collecting the carts quickly to reduce blight, it is not the best use of City resources to collect the carts, which are the private property of the stores. Also collecting and holding the cart is subject to State law (see attached), and would require significant additional City resources to manage. There are some slight liability risks to the City (injury or property damage from a cart left on the streets for days), worker compensation risk from employees handling the heavy carts, and property risk from stores claiming we damaged their carts. These risks are small, and have not yet resulted in any claims at this time. Therefore, the main concern is blight. The problem of shopping carts being taken from store properties and abandoned is not homogeneous throughout the City wherever there are retail stores. The key determinant of whether the carts are taken from the property is whether the store location is within walking distance of either residential populations that tend not to drive cars, or close to well utilized bus stops. If almost all of the store's customers use vehicles to come and go, the number of lost shopping carts is greatly reduced. Therefore, there are general "hot spots" where carts will continually be abandoned with occasional carts found in other areas. There are two integrated methods for reducing or eliminating shopping carts from the streets of the City. These are prevention and collection. Prevention would include all actions taken to keep the shopping carts from being taken from the store property. These actions include consumer information signs and postings both in the store and on the carts, physical barriers like fencing, and "smart carts" that contain electronic equipment that recognizes a property boundary and lock the cart wheels when it reaches the boundary limit. Most stores in Palm Desert currently use polite information postings like "return carts here for your safety and convenience." They do not use stronger warning signage that states, "Do not remove carts -it is against the law." Stores can post security guards to stop customers who attempt to remove carts, they can fence the boundary to prevent carts from passing through (although auto driveways provide gaps), security deposit systems like are in place at airports for luggage carts, rental or sale of carts for offsite use, or physical attachments to carts that act to stop carts at installed barriers. Collection methods are the actions taken by retailers to retrieve the carts once they have left the property. These include self -collection where store employees retrieve them, contracted retrieval, where a specialty company is hired to retrieve them, and passive retrieval, where the store allows the local entity to collect and return them. The cost of retrieval is for labor (both searching, picking up and logging them back in at the store) vehicle costs, and when contracted, usually established on a per cart basis. Therefore, stores that decide to pay to retrieve their carts usually also invest in prevention. Stores that wish to maintain reduced costs will tend to not invest in either prevention or collection and shift the burden to other Shopping Cart Ordinance Page 3 of 6 May 26, 2005 entities that will be forced to retrieve the carts because no one else will. Another strategy is not to have carts. This is the most effective method for eliminating the costs associated with cart retrieval, but reduces convenience for customers. Retailers in some locations outside Palm Desert utilize employees to hand carry purchases to valet parked cars which eliminates the cost of shopping carts, but incurs substantial labor costs. Some retailers have a corporate -wide process to reduce shopping cart loss. Others leave the decisions to individual store managers. Many Cities in California have passed shopping cart ordinances to address the problem of abandoned shopping carts. The two main methods of control in current ordinances are to allow the City to perform cart impounding and collect fines, and to require businesses to implement specific cart loss prevention methods. Both of these approaches have drawbacks, but if modified, requiring retailers to have a prevention program has the least drawbacks. Cart impounding is controlled under California State law (Business and Professions Code Section 22435-22435.7, see attachment). The law, written to favor retailers, makes impounding carts (i.e. taking possession of the carts and requiring retailers to come to the impound location and retrieve them or face a fine) impractical and resource intensive. Cities that impound shopping carts either immediately or after the "3-day rule", must provide notice to each retailer, and wait for them to collect the impounded carts. Carts not retrieved after the 3rd day of impound after notice is given can impose a fine (not exceeding $50) only if it is the 4t' occurrence of impounded carts not retrieved after 3 days within a six-month period. Retailers collecting carts within 3 days after the notice is received cannot be fined, and do not tally an "occurrence" towards their 3 "free" occurrences. If the cart is not retrieved in 30 days, it can be sold or disposed. The drawbacks to this program are clear. It creates an adversarial relationship between Cities and their businesses, and it requires the City to have an impound, notice and fine bureaucracy. It requires that the City handle, store, and track every cart, and it requires that the City manage the cost and storage and disposal of carts that are either picked up quickly without fine, or completely abandoned and not picked up at all. Notices must be sent and tracked and carts must be tracked for each notice and for their timing from the point of notice. Occurrences of 3-day exceedences must be tracked to determine if it is the fourth in six months or not. When faced with the daunting task of impounding the carts under California law, many cities have been using a Prevention Plan Ordinance. The ordinance requires that retailers generate a plan that utilizes prevention systems and the City often specifies certain programs and procedures. For example, in Las Vegas retailers are required to use "smart carts." (Despite the technology, "smart carts" still get taken and abandoned.) Some cities allow retailers to "opt out" of the prevention plan requirement by joining a municipal "shopping cart program" by paying a uniform fee for the municipal retrieval service. Retailers may end up paying a fee and not having all that many carts taken, resulting in a fee for not much service. California Shopping Cart Retrieval Corporation (CART) is a Southern California organization that specializes in cart retrieval services. CART provides municipal service to 27 California cities, CART also contracts directly with many stores to retrieve their carts, sometimes at the corporate level and sometimes at the individual store level. They are currently contracted to Shopping Cart Ordinance Page 4 of 6 May 26, 2005 retrieve carts in Palm Desert for Albertsons, Ralphs, Sav-On Drugs, Trader Joes and Vons. It is typical that CART is contracted with both a city and many stores within the same city. They utilize the same staff to collect and return the carts. The only difference having contracts with stores, is that they may require different number of sweeps per week than a municipal contract. For example, CART may contract with a store to pick up carts twice a week, while the city requires CART to pick up and return carts 5 days a week. Under this scenario, some days, the city will pay for retrieval while other days the store will pay. The recommendation in this report for the City of Palm Desert uses several elements of existing prevention programs and retrieval programs. However, there are several modifications that would make the overall program more business friendly, reduce the resources expended by the City, and result in rapid response to citizen complaints through an aggressive program of collection and return of all carts in the City. Having a unified contract service to handle abandoned carts will significantly reduce the City's employee injury and liability risks and provide a significantly improved one -call service to residents. CART has estimated a typical per cart cost of $3 with no additional fees or charges. At our current rate of 40 carts per week this would result in a $480 per month or $5760 annual cost. The 40-cart estimate is based on a current situation where there is no cart loss prevention program in place in Palm Desert. CART's experience with other cities shows that a cart loss prevention ordinance will reduce the overall number of carts that need to be collected and paid for. The cost for the municipal service can be paid either entirely by the City, or mostly by the retailers who use shopping carts in the City, depending on the method the City chooses to structure the program. Some cities have a unified fee equal for all retailers who use shopping carts. I propose a pro -rated fee based on "usage" of the service. Usage of the municipal retrieval service is defined by carts that were not prevented from leaving the property and not picked up by the retailer's actions. It is likely that incurring an additional charge from the City above and beyond the pure cost for the service will encourage some retailers to be more active in reducing cart loss. My recommendation, therefore, is to enact a shopping cart ordinance that requires retailers to prevent shopping cart loss through any means they see fit, and contract for a municipal cart retrieval service that is funded only by retailers whose cart loss prevention programs are ineffective (and thus out of compliance with the ordinance) when they renew their business licenses. Retailers with effective programs would pay no fee. An "effective program " could also defined as ranging from "zero tolerance" to a small cushion of 12-24 carts per year. Following is the recommended action in detail: 1. City Ordinance This ordinance would require two basic things from businesses that use shopping carts; 1) obtain an annual City Permit for shopping carts; and 2) an annual renewal of the permit at the same time the business license is renewed. Shopping Cart Ordinance Page 5 of 6 May 26, 2005 The requirements for the permit are the following: a. The business has six months from the date of the ordinance to establish and implement an "effective program" to limit shopping carts from being taken off their business property. The ordinance will define an "effective program" as a certain number of carts retrieved by the City from by the City's cart retrieval contractor from six months following enactment of the ordinance to the date of the retailer's next business license renewal. An "effective program" also consists of the following: i. The business must identify every cart with the name of the business that is responsible for the carts. ii. The business must utilize effective methods to inform the customers that it is against California Law and City Ordinance to remove a cart from the property. iii. The business must actively prevent carts from leaving their property and search for and retrieve their carts taken off the property within 24 hours. b. Renewal of permits for "ineffective" programs require payment of an annual City Cart Retrieval Program "fee", which is the cost to the City to retrieve the carts from that particular business over the course of the year (information collected and reported by the City contractor), plus $100 to cover the City's annual administrative costs. 2. Contract Cart Retrieval Service The City locates and contracts with a shopping cart retrieval service company that will provide the following: a. Ongoing daily or every other day shopping cart search and retrieval service. b. A per -cart fee structure. c. A cart pickup hotline phone number for residents to report carts for retrieval within 24 hours of the call. d. Monthly invoices to the City providing detailed accounting of exactly which businesses the retrieved carts are coming from. e. If no carts are retrieved for a significant period of time, the contract does not expire, but remains in effect as a contingency contract that can be revived at a single call notice. f. No minimum fee. The City's service contractor would begin work for the City when the ordinance is enacted. Retailers have six months after the ordinance is effective to organize and implement their "performance based" shopping cart retrieval programs and obtain an initial permit. The City will not expend resources to review or approve any details as to how the programs are designed or implemented. The City assesses performance effectiveness of the programs at the time the business licenses are renewed beginning six months after the ordinance is effective, and the assessment is based solely on performance. Shopping Cart Ordinance Page 6 of 6 May 26, 2005 Under this plan, the City will pay for the contracted shopping cart retrieval service for six months. The cost of carts retrieved through the City's service after six months; however, will be offset by requiring the businesses that do not have effective programs to reimburse the City for the service we provided them on a "per cart" basis, plus an administrative fee. Code Compliance can be asked to consult with retailers who are not meeting the basic level of ordinance requirements six months after the ordinance is in effect. The additional fee recovers the cost of administration of the program and Code Compliance resources expended. The City therefore will provide the service "free" to City businesses during the six- month "implementation period", and after that, charge businesses back for the cost to City for their "ineffective programs." After six months the program should begin to pay for itself. This fee structure is not prohibited by California law because the City is returning the shopping carts without taking "possession" of them, and are therefore not "impounding" them and imposing a fine for their return. The law allows for cities to recover the cost of retrieval programs. The main features of the recommended program are that it is fair to businesses and it gets the carts off the streets quickly with a minimum of City effort. This plan is performance oriented for retailers. They set up their own programs the way they see fit with minimum performance specifications from the City. Businesses incur a differential cost to the City only if their program is "ineffective" in allowing carts to be taken off their premises. If they wish to hire a retrieval service, post guards, buy "smart -carts," put up signs, have fences, or do nothing, it is up to them. If they do nothing and they lose two or three carts a year, their fee to City will be minimal. If they decide to have no program and hundreds of carts need to be retrieved each year by the City contractor, they will pay several hundred dollars when they renew their business license and perhaps think twice about not having a program. The business that invests in an effective program will renew their permits at no additional cost. Most importantly, the carts will be off the City streets within a day or two without using a lot of City resources. / A Submitte Gary Rose�bfum Risk Manager Approval: A Carlos Ortega City Manager Depa ent H o er Cr ACM for ve i ment Services FindLaw for Legal Professionals - Case Law, Federal and State Resources, Forms, and Code FindLaw for Legal Professionals - Case Law, Federal and State Resources, Forms, and Code FindLaw I For the Public For Business I For Corporate counselRegister/login to My FindLaw Federal Law State Law Case Summaries Search U.S. Code U.S. Supreme Court My current location: San Bernardino, CA I Change Location FindLaw : FindLaw California : Codes and Statutes California code : Business and Professions code California Codes California Business and Professions code BUSINESS AND PROFESSIONS CODE SECTION 22435-22435.8 22435. As used in this article: (a) "Shopping cart" means a basket which is mounted on wheels or a similar device generally used in a retail establishment by a customer for the purpose of transporting goods of any kind. (b) "Laundry cart' means a basket which is mounted on wheels and used in a coin -operated laundry or drycleaning retail establishment by a customer or an attendant for the purpose of transporting fabrics and the supplies necessary to process them. (c) "Parking area" means a parking lot or other property provided by a retailer for use by a customer for parking an automobile or other vehicle. 22435.1. The provisions of Section 22435.2 shall apply when a shopping cart or a laundry cart has a sign permanently when to it that identifies the owner of the cart or the retailer, or both; notifies the public of the procedure to be utilized for authorized removal of the cart from the premises; notifies the public that the unauthorized removal of the cart from the premises or parking area of the retail establishment, or the unauthorized possession of the cart, is a violation of state law; and lists a valid telephone number or address for returning the cart removed from the premises or parking area to the owner or retailer. 22435.2. It is unlawful to do any of the following acts, if a shopping cart or laundry cart has a permanently affixed sign as provided in Section 22435.1: (a) To remove a shopping cart or laundry cart from the premises or tail parking area of a reestablishment with the intent to temporarily or permanently deprive the owner or retailer of possession of the cart. (b) To be in possession of any shopping cart or laundry cart that has been removed from the premises or the parking area of a retail establishment, with the intent to temporarily or permanently deprive the owner or retailer of possession of the cart. (c) To be in possession of any shopping cart or laundry cart with serial numbers removed, obliterated, or altered, with the intent to temporarily or permanently deprive the owner or retailer of Page 1 FindLaw for Legal Professionals - Case Law, Federal and state Resources, possession of the cart. (d) To leave or abandon a shopping cart or laundry cart at a location other than the premises or parking area of the retail establishment with the intent to temporarily or permanently deprive the owner or retailer of possession of the cart. (e) To alter, convert, or tamper with a shopping cart or laundry cart, or to remove any part or portion thereof or to remove, obliterate or alter serial numbers on a cart, with the intent to temporarily or permanently deprive the owner or retailer of possession of the cart. (f) To be in possession of any shopping cart or laundry cart while that cart is not located on the premises or parking lot of a retail establishment, with the intent to temporarily or permanently deprive the owner or retailer of possession of the cart. 22435.3. Any person who violates any of the provisions of this article is guilty of a misdemeanor. The provisions of this section are not intended to preclude the application of any other laws relating to prosecution for theft. 22435.4. This article shall not apply to the owner of a shopping cart or laundry cart or to a retailer, or to their agents or employees, or to a customer of a retail establishment who has written consent from the owner of a shopping cart or laundry cart or a retailer to be in possession of the shopping cart or laundry cart or to remove the shopping cart or laundry cart from the premises or the parking area of the retail establishment, or to do any of the acts specified in Section 22435.2. 22435.5. (a) In any civil proceeding, any shopping cart or laundry cart which has a sign affixed to it pursuant to Section 22435.1 shall establish a rebuttable presumption affecting the burden of producing evidence that the property is that of the person or business named in the sign and not abandoned by the person or business named in the sign. (b) In any criminal proceeding, it may be inferred that any shopping cart or laundry cart which has a sign affixed to it pursuant to Section 22435.1 is the property of the person or business named in the sign and has not been abandoned by the person or business named in the sign. 22435.7. (a) The Legislature hereby finds that the retrieval by local government agencies of shopping carts specified in this section is in need of uniform statewide regulation and constitutes a matter of statewide concern that shall be governed solely by this section. (b) A shopping cart that has a sign affixed to it in accordance with section 22435.1 may be impounded by a city, county, or city and county, provided both of the following conditions have been satisfied: (1) The shopping cart is located outside the premises or parking area of a retail establishment. The parking area of a retail establishment located in a multistore complex or shopping center shall include the entire parking area used by the complex or center. (2) Except as provided in subdivision (i), the shopping cart is not retrieved within three business days from the date the owner of Page 2 Forms, and code FindLaw for Legal Professionals - Case Law, Federal and State Resources, Forms, and Code the shopping cart, or his or her agent, receives actual notice from the city, county, or city and county of the shopping cart's discovery and location. (c) In instances where the location of a shopping cart will impede emergency services, a city, county, or city and county is authorized to immediately retrieve the shopping cart from public or private property. (d) Any city, county, or city and county that impounds a shopping cart under the authority provided in subdivisions (p) and (c) is authorized to recover its actual costs for providing this service. (e) Any shopping cart that is impounded by a city, county, or city and county pursuant to subdivisions (b) and (c) shall be held at a location that is both: (1) Reasonably convenient to the owner of the shopping cart. (2) open for business at least six hours of each business day. (f) A city, county, or city and county may fine the owner of a shopping cart in an amount not to exceed fifty dollars ($50) for each occurrence in excess of three during a specified six-month period for failure to retrieve shopping carts in accordance with this section. An occurrence includes all shopping carts impounded in accordance with this section in a one -day period. (g) Any shopping cart not reclaimed from the city, county, or city and county within 30 days of receipt of a notice of violation by the owner of the shopping cart may be sold or otherwise disposed of by the entity in possession of the shopping cart. (h) This section shall not invalidate any contract entered into prior to June 30, 1996, between a city, county, or city and county and a person or business entity for the purpose of retrieving or impounding shopping carts. (i) Notwithstanding paragraph (2) of subdivision (b), a city, county, or city and county may impound a shopping cart that otherwise meets the criteria set forth in paragraph (1) of subdivision (b) without complying with the three-day advance notice requirement provided that: (1) The owner of the shopping cart, or his or her agent, is provided actual notice within 24 hours following the impound and that notice informs the owner, or his or her agent, as to the location where the shopping cart may be claimed. (2) Any shopping cart so im ounded shall be held at a location in compliance with subdivision (e�. (3) Any shopping cart reclaimed by the owner or his or her agent, within three business days following the date of actual notice as provided pursuant to paragraph (1), shall be released and surrendered to the owner or agent at no charge whatsoever, including the waiver of any impound and storage fees or fines that would otherwise be applicable pursuant to subdivision (d) or (f). Any cart reclaimed within the three -business -day period shall not be deemed an occurrence for purposes of subdivision (f). (4) Any shopping cart not reclaimed by the owner or his or her agent, within three business days following the date of actual notice as provided pursuant to paragraph (1), shall be subject to any applicable fee or fine imposed pursuant to subdivision (d) or (f) commencing on the fourth business day following the date of the notice. (5) Any shopping cart not reclaimed by the owner or his or her agent, within 30 days of receipt following the date of actual notice as provided pursuant to paragraph (1), may be sold or disposed of in accordance with subdivision (g). 22435.8. This article shall not invalidate an ordinance of, or be construed to prohibit the adoption of an ordinance by, a city, Page 3 FindLaw for Legal Professionals - Case Law, Federal and state Resources, Forms, and code county, or city and county, which ordinance regulates or prohibits the removal of shopping carts or laundry carts from the premises or parking area of a retail establishment except to the extent any provision of such an ordinance expressly conflicts with any provision of this article. Previous Return to TopNext Sponsored Links Find a Lawyer: our free service locates Bankruptcy, Criminal, DUI, Immigration, Personal Injury, Taxation, or Trademark lawyers in your area who can help you with your legal issues. 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