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FIRST, ask them what specific ordinance/code specifies that you cannot have chickens. Do NOT get rid of your chickens or even remove them from your yard without verifying that they are illegal. This means that once you have the reference to a specific ordinance or section of code that you need to actually read it (and all other related code). Just because Animal Control wants them gone does not mean that they have the right to dictate that.
Be polite, and be agreeable about wanting to comply with the law, but be firm that you need to see the actual wording of the code. You also need to look up the definition of livestock and pet to see if chickens are listed as livestock or not, and if there are specifics in the definition of "pet" that would allow or disallow your chickens to be included.
Next, you do NOT want to re-invent the wheel by creating new ordinances specifically for chickens (or any other single species). A nuisnace is a nuisance because it affets other people in a negative manner. The CAUSE of the nuisance is irrelevant--it could be a barking dog, loud power tools or a wild party at 3am. So, the important thing is to list how the CURRENT ordinances address any perceived nuisances that chickens might create.
Most communities require that animals/pets not be "at large," meaning that you must keep them on your property. HOW you do so is your responsibility. The same should apply to chickens. If you can keep them free-ranging inside your yard, then that should be sufficient; requiring that they be in an enclosed pen is not only overkill, but you will split the people who would like to see chickens being legal. I know I would VEHEMINANTLY oppose any suggestion that would tell me that they must be in an enclosed pen when I can keep them on my property without such.
I would also vehemintly oppose the idea of a permit.
Three complaints and you're out goes against the very fabric of our legal system. ANYONE can complain about anything. Whether that complaint is justified is another matter entirely.
Nuisances are primarily noise (time of day can figure into this), odor, health or safety concerns and unsightly buildings or property. CHances are very strong that your current code adequately addresses each of these--you just need to show how that code applies to chickens and how already existant remedies also apply.
ok, i P.M.ed you.