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HomeMy WebLinkAboutA002 - Letter from Scott Nichols [l L [L To Mayor and city council 4-29-15 APR 3 0 2015 Last night at the council meeting, I had hoped to help you all understand t e huge burdMtheERâ–ºc CITY OF AMES, IOWA second hand goods bill would cause me. Instead I learned that no speaking was al gave me the impression this bill is a done deal, and I will have to wait 6 months after passing it to complain.That is not acceptable. My business probably does 70-80%of the gold and silver bullion business in Ames. Therefore I will have to suffer 70-80`Yo of the burden.To not be listened to makes me angry.The following is a written document that I wanted to convey to you all last night. The last 2 weeks since I spoke at the meeting, I have spent hours analyzing how this bill will affect my small business. I now realize that as stated above, I will be the one to suffer the most of any business in Ames. In fact the bill almost seems to target me. After that I really dug in. I read and reread the bill dozens of times. My conclusion is that this bill is extremely bad for my business.The two most startling things are the invasion of privacy of my customers, and the electronic filing and photography of bullion items I purchase. I estimate I will have to file 1000 to 2000 each year depending on market conditions. My business is unique to Ames. I believe you all are making a decision without even a remote understanding of what I do. I fear you passing this bill.Therefore I am going to share with you council members some personal information. Please do not spread this information around. I am not a pawn shop. Pawn shops operate with very high margins. Last year I purchased some silver dollars from a man for$20 each.As he left, he thanked me and told me a pawn shop had offered him $5.At the time I was selling these for a 20% markup or$24. Presuming the pawn shop would sell them for the same price they are working on a 500%markup. My typical margin on large gold and silver sales is 2-3%. For an ounce of gold currently worth about$1,250 my goal is to make$25. 1 am not a pawn shop,yet this bill treats me like one. I serve a much different, but important,service to Ames. 1 offer investments in gold and silver bullion. Some customers buy/sell me a single silver dollar,and some buy/sell huge quantities of bullion that are financial transactions more like a stock purchase/sale. I am the only business in Ames to offer this,yet you want to make my job harder than any other bullion dealer in Iowa. I estimate that 80%of my buys would qualify as bullion in this bill, and I would have to put them on the website. In the last 7 years, my son and I have sold $10,000,000 in bullion. I estimate that to be about 10,000 transactions.Over time these buyers will become sellers,and I will have to go through the photo/filing ordeal on thousands of transactions. Most of these sellers are remembered by myself and my son as previous customers,yet I still have to file as if they were possible thieves. Virtually all gold and silver bullion coins look exactly alike and cannot be identified. For example, we sell hundreds of US Mint gold eagles,Canadian Mint maple leafs, and South Africa krugarands. Each of these is exactly the same except for the date, but millions were made of each date. An example in silver is the US Mint silver eagle. Last year the US mint produced 45 million of these and I 4 . 1 sold probably 10,000.Yet if a person brings one of these in to sell, I have take a photo, collect the seller's name, address, driver's license and upload this to the internet. I buy silver eagles almost every day. These coins alone will cause 100s of reports per year, but the pictures will all be the same. This is an unwarranted claim on my time for totally useless information. This bill seems to be designed to catch a few stupid and petty criminals. Yet it interferes with my ability to do honest business. A pawn shop customer is perhaps desperate and broke. My average customer is the working man: a saver and investor that has extra money to invest. Average people like bus drivers,cafeteria workers, plumbers. My customers that make 5 and 6 figure investments are lawyers, businessmen,doctors,farmers and bankers. Do you really believe you have the right to make me give the police these people's investment choices? Many of my customers are repeat customers. I know them well. The majority are some degree of Libertarian,and they don't trust the government. They're very private. Most have asked if I have to report to any government agency. I have a ten year history of telling thousands of people there is no reporting. This bill will make me a liar. Some of these people will not sell to me once I tell them of this reporting requirement. I will lose them to Des Moines, Fort Dodge, etc, and I will lose profit opportunities. My more extreme customers don't trust government or banks. A few keep all their money in cash, silver,and gold. I have a retired businessman who comes in every week to cash in some silver or gold to pay his bills. IF he continues to come to me, I'll have to make 52 photo internet reports per year of basic gold and silver that can never be proven as stolen. This bill also makes me less competitive. I draw people from Des Moines in the south, Mason City north,Tama east and Carroll to the west. In this area, no town or city has any regulation at all. Des Moines only regulates jewelry with a 7 day hold. I know my customers, and I know some will object to their personal info being given to the police. I will lose these customers forever to other dealers. Regarding scrap jewelry, I have decided if you pass this bill, I will quit buying silver scrap and low value gold scrap. I will give up these profit opportunities to avoid the reporting regulations. I will then have to refer these people to pawnshops where they get less money or to my competition in Des Moines. This can lead potentially to losing customers. I ask you: Is this good as a community to have local businesses send customers to places they get less return on their investment or to spend their money in Des Moines? As you can see,this bill will be a huge burden for me in my business. It will cost me in terms reporting time. I estimate 40-80 hours per year on roughly 1,000 purchases. Should I have to give up my annual vacations to make time for uploading unused information for the police dept? It will cost sales as it makes me less competitive with dealers in neighboring communities. I will lose profit possibilities as it is not worth my time to do the reporting on low value items. It will force my customers that I have accumulated over 10 years to go to businesses in other towns to satisfy their needs.Some of my more Libertarian customers will leave me as they won't want the police involved in their personal financial decisions. This bill is a disaster for me.Ames is a very safe and low crime town compared to Des Moines where they don't abuse their business people like this will do to me.There is no need for this bill other than government shifting their work and responsibility's to me. All the above are facts, now I want to tell you how this makes me feel.As the largest dealer in bullion items in Ames I feel like I have been targeted. I will have to report as much as 3/of the entire cities total bullion purchases. I feel picked on and feel I did not receive enough time to understand the consequences of this disaster of a bill. I never expected that after 25 years in business in Ames and with a great relationship with the police that I would be rewarded with this atrocious burden of a bill. It was only out of curiosity that I stumbled into the city manager's office and asked for a copy of the bill. I spoke of concerns at that evening's meeting but at the time did not understand the quagmire of useless work and the cost of sales, buys and profits this bill forces on me. Most of my fears about this bill are caused by one tiny part of the bill.That is the reporting requirements on bullion items. If you would exempt bullion from reporting in the same manner as coins I could live with the rest of this skunk. I absolutely FEAR this bill and BEG you not to pass it. Scott Nichols Chester's Coins 221 Main St Ames, IA 50010 515-232-9222 Ps I think I covered all my major concerns but if anything needs clarified please ask. I am almost always in the store Tue-Fri 10-530 Sat 10-4 Police Chief Charles Cychosz 4-29-15 1 am writing about the second hand goods bill that is being forced down my throat by your department. I am the owner of Chester's Coins and am in agony over this bill. I probably sell 70-80%of the gold and silver in the town of Ames.That means I bear 70-80%of the bullion reporting required by this bill. I never even saw a copy of this bill until 2 weeks ago. I spoke at the city council the same day I got a copy. I should've received a copy from your dept before well before this first reading. Now it seems that I'm showing up late for the battle. At that time I didn't even have a clue how much this will damage my business. Now that I understand, I am appalled. I now call this bill:The let's screw Scott Nichols bill. I have included a copy of the letter I am sending to the city council members outlining numerous ways this bill will damage my business. I also propose a compromise that I can accept and still maintain the great relationship I have had with the police dept over the last 20 years. Bullion should be excluded. This bill is a big deal to me. I will have to change totally the way I do just about everything. Instead of a 5 minute interview with the police, I should have been included in putting this together. We could have done a much better job and made a bill that works for both of us. I can't understand why your people compared Ames to Davenport, Dubuque,Council Bluffs and Bettendorf as they are 200 miles away.You might as well have used Timbuctoo. I only care about my competition in Des Moines and Fort Dodge. Neither of these cities have any reporting requirements. Considering how much I have to lose, I feel you owe it to me to consider my compromise offer. Without this concession from you, I will be stuck with this bill that I really cannot live with. How I handle this bill if passed remains to be seen, but I can assure you that if you do not alter the bill, your dept will not receive the same respect or cooperation from me. Scott Nichols owner Chester's Coins and Gifts 221 Main Ames 515-232-9222 Scott@chesterscoins.com