Prepay Day Arrives in Coon Rapids

New gasoline payment ordinance taking effect August 1 is first in Minnesota

COON RAPIDS, Minn. -- When the ordinance goes into effect August 1, Coon Rapids will become the first city in Minnesota to implement a prepay gasoline law, reported ABC Newspapers. The ordinance was adopted by a five-to-two vote of the Coon Rapids City Council on February 1.

The new law has an exception to the prepay requirement: "If business owners enter into a civil agreement with customers ... 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."

Most gas station operator-owners in Coon Rapids strongly oppose the ordinance, offered by Councilmember Bruce Sanders, said the report. The city council gave operators and owners the opportunity in late January to state their case and offer alternatives, which included a civil process to deal with gasoline no-pay driveoffs.

The Minnesota Legislature also made an unsuccessful effort to scuttle the ordinance when legislators entered bills 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 Governor Mark Dayton, the report said.

Police Chief Brad Wise, who initiated the ordinance as a crime prevention tool to minimize the number of no-pay driveoffs from Coon Rapids retail fuel businesses--492 in 2010 and 481 in 2011--sent a letter to all owner-operators in the city earlier this month to remind them of the impending start date and urging compliance.

In the letter, delivered by Community Policing Officer Terry Thomton to 26 stations, Wise drew attention to the exception. "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 the exception, the police department said that it will conduct spot checks, said 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 ordinance is crime prevention, according to Wise. Responding to driveoff reports has also been a drain on police resources and led to a spike in the city's crime rate, he said.

In January, owners/operators raised concerns that the ordinance would result in a loss of business and higher costs in credit-card fees. They said the jump in credit card use caused by a prepay ordinance would increase business costs.

Rick Dehn of Dehn Oil in Anoka, which owns Foley Quick Mart, a Marathon station, was one of the owner/operators to speak out against the ordinance in January. He has not changed his position, he told the paper.

While he will not incur any costs switching all his pumps to prepay, Dehn anticipates losing business because Foley Quick Mart is only a mile from Blaine, which does not mandate prepay.

"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% of his customers use credit cards to prepay at the pump, while the other 50% come into the store, said Dehn. Requiring prepay will mean increased credit card use and higher fees, he 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.

Dehn said he remains opposed to the ordinance and is also confused by the "exception" provision, for which he is seeking clarification, he said.

The Minnesota Legislature did pass legislation this past session backed by owners/operators that no longer requires the employee to make a positive identification in a photo lineup to prosecute driveoffs, Dehn said. It puts in place a civil process, whereby the employee makes a note of the license plate, and if there is a no-pay, the business sends a letter to the plate owner, demanding payment within 30 days, he said.

Response has been good when that has occurred, he said.

The case turned over police for prosecution only if payment is not made; however, Wise said that he has been told by the city attorney's office that it would be unlikely that a case could be prosecuted under those circumstances.