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									                                                                        CC MTG DATE: 04/01/08
                                                                        ITEM:        7-B

                                    CITY OF SHOW LOW
                                STAFF SUMMARY REPORT
AGENDA TITLE:        PUBLIC HEARING and Consideration of Ordinance No. 2008-05
                     Amending Article 15-1, Zoning Ordinance, of the Show Low City Code by
                     Amending Sections 15-1-21 and 15-1-60 Regarding Non-Chartered
                     Financial Institutions (Justen Tregaskes)


I MOVE to read Ordinance No. 2008-05 by title only since all Council members have a copy.

I MOVE to adopt Ordinance No. 2008-05.

At its meeting of March 25, 2008, the Planning and Zoning Commission voted 5 to 1
(Commissioner Isaacs opposed and Commissioner Leech was absent) to approve the
proposed changes to subsections 15-1-21 to create a definition of “non-chartered financial
institutions” and 15-1-60 to restrict non-chartered financial institutions to the C-2 zoning district
as a conditional use only and require a minimum of 1,320 feet between uses. The
Commission’s action included forwarding this recommendation to the City Council. Currently,
the Zoning Ordinance does not address non-chartered financial institutions.

Non-chartered financial institutions are also known as payday-loan or auto title-loan centers
that offer small, short-term loans that often have interest rates exceeding 400%. Typical
payday loan customers are those with cash flow problems, few lower-cost borrowing
alternatives, and often choose to “roll over” their credits to obtain additional money.

The Federal Trade Commission has issued a consumer alert about payday loans, considered
a form of sub-prime lending. There are strict regulations on any Federal Deposit Insurance
Corporation (FDIC) member bank that practices payday lending. The Federal Reserve and the
Office of the Controller of the Currency have banned payday loan practices altogether.
However, non-chartered financial institutions are not members of the Federal Reserve and are
not subject to FDIC regulations.

A non-chartered financial institution is defined as a business that, other than a state or
federally charted bank, credit union, mortgage lender, or savings and loan association, offers
check cashing services, auto title loans, and loans for payment of a percentage fee.
Specifically included are check-cashing businesses that charge a percentage fee for cashing a
check or negotiable instrument and payday-loan businesses that make loans on assignments
of wages received. Automobile dealers are not considered non-chartered financial institutions.

At least seven cities and one county in Arizona have created ordinances that limit the numbers
of these businesses allowed to operate in a certain area by creating a minimum distance,
usually 1,000 or 1,320 feet, between these businesses. The most-used distance is 1,320 feet,
which is a quarter-mile. For example, the City of Goodyear has established that 1,320 feet
between non-chartered financial institutions is the acceptable maximum standard. Some cities
also include a minimum distance of 500 feet from residential zones. In addition, most cities in
Arizona require non-chartered financial institutions to obtain a conditional use permit to
operate. Two cities that do not list non-chartered financial institutions as a conditional use
require special applications that are reviewed and, if appropriate, approved by the planning
and zoning director. A chart outlining these requirements is attached. The proposed changes
to Show Low’s Zoning Ordinance are consistent with those adopted in Goodyear and

Staff has scheduled the public hearing and possible adoption of Ordinance No. 2008-05 for
April 1, 2008. If adopted, the ordinance would become effective 30 days thereafter.

Ordinance No. 2008-05
Chart of requirements by other jurisdictions

                   CITY OF SHOW LOW ORDINANCE NO. 2008-05

         SECTIONS   15-1-21 AND    15-1-60 REGARDING    NON-


NOW, THEREFORE, BE IT ORDAINED by the Mayor and Council of the City of Show
Low, Arizona as follows:

Section 1

Section 15-1-21, Generally, of the Show Low City Code shall be amended by the
addition of a definition for non-chartered financial institutions as follows:

Non-chartered financial institution: Any business, including accessory uses,
other than a state or federally chartered bank, credit union, mortgage lender or
savings and loan association, that offers check cashing services, vehicle title
loans, and loans for payment of a percentage or graduated fee. Specifically
included are check cashing and pawn shop businesses that charge a percentage
or graduated fee for cashing a check or negotiable instrument and “payday loan”
businesses which make loans upon assignment of wages received, or
businesses that function as deferred presentment services. Automobile dealers
shall not be considered non-chartered financial institutions.

Section 2

Subsection (C)(1), Conditional uses, of Section 15-1-60, C-2 zone, general commercial,
of the Show Low City Code shall be amended to limit non-chartered financial institutions
to the C-2 zoning district only as a conditional use and require a minimum of 1,320 feet
between uses as follows:

Non-chartered financial institutions, provided they shall not be located within one
thousand three hundred twenty (1,320) feet of the same type of use.
Measurement shall be in a straight line from parcel boundary to parcel boundary,
including non-chartered financial institutions outside city limits.

Section 3

Any person found guilty of violating any provisions of this ordinance shall be guilty of a
civil violation, except where otherwise specifically provided. Civil violations are
punishable by a maximum fine of up to $2,500.00 as provided in section 1-8-1(a) of the
City Code and A.R.S. §9-240. Each day that a violation continues shall be a separate
Section 4

If any section, subsection, sentence, clause, phrase, or portion of this ordinance is, for
any reason, held to be invalid or unconstitutional by the decision of any court of
competent jurisdiction, such decision shall not affect the validity of the remaining
portions thereof.

PASSED AND ADOPTED this 1st day of April, 2008, by the Mayor and Council of the
City of Show Low, Arizona.

                                                Rick Fernau, Mayor


Ann Kurasaki, City Clerk


K. Kane Graves, City Attorney

City of Show Low Ordinance No. 2008-05                                             Page 2
   City          Zoning          Use
                 District       Permit          Separation Requirements                       Notes
Avondale                                     Shall not be within 1,320 feet of
                                             the same use whether or not it is
                                                                                    Measured in a straight
                                             located in the same city. In
                                                                                    line from the nearest
                   C-2          Required     addition they may not be located
                                                                                    property line of each
                                             within 1,320 feet of a tavern,
                                             bar, cocktail lounge or an adult
Goodyear                                                                            An application for the
                                                                                    establishment of a NCFI
                                             A proposed NCFI shall not be
                                   Not                                              must be submitted and
                                             located within 1,320 feet (one-
                   C-2          Required                                            reviewed by the
                                             quarter mile) from any other
                               (see notes)                                          Community Development
                                                                                    Directory or their
              C-2, C-3, C-4,                 May not be located within 1,000        Measured in a straight
              C-5, PI-1, and    Required     feet of the same use whether or        line from lot line to lot
                    I-1                      not it is located in the same city.    line in any direction.
Phoenix                                                                             Measured from the
                                             Shall not be located within 1,320      exterior walls of the
                                  Not        feet of the same type of use or        buildings in which the
                                Required     within 500 feet of a residential       businesses are conducted
                                             use.                                   or proposed to be
County                                       1,320 feet from all other NCFI         Measured from site
                  CB-2                       and 500 feet from all residential      boundary to site
                               (type III)
                                             zones.                                 boundary.

South                                                                               Measured from lot line to
                                             No NCFI use will be within 1,000
Tucson                                                                              lot line. NCFI group
                                             feet of any other NCFI, nor be
                                   Not                                              application required; the
              SB-2, SB-2A,                   within 500 feet of any residential
                                Required                                            Zoning Administrator has
               and SI-1                      zone, public playground, and/or
                               (see notes)                                          7 working days to grant
                                             park. No more than one NCFI is
                                                                                    or deny a NCFI group
                                             allowed per lot.
Tempe                                        Shall not be within 1,320 feet of
                                             another NCFI measured by a             These requirements shall
                All except
                                             straight line in any direction         also apply to NCFI which
                residential     Required
                                             from lot line to lot line. Nor shall   are ancillary to another
              zones and C-1
                                             they be located within 500 feet        existing or permitted use.
                                             of a residential zone.
                                             Separation between facilities of
               C-2 and C-3      Required     1,320 feet and 500 feet between
                                             the facility and residential zone.

Show Low
(proposed)                                                                          Measured from parcel
                                             Shall not be located within 1,320
                   C-2          Required                                            boundary to parcel
                                             feet of another NCFI.

* NCFI= Non-Chartered Financial Institutions

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