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CITY COMMISSION AGENDA ITEM |
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Department: |
Finance |
Commission Meeting Date: October 4, 2016 |
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Staff Contact: |
Bryan Kidney, Director |
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Recommendations/Options/Action Requested: |
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Authorize the City Manager to modify a contract with Paymentus Corporation for the purpose of moving to an absorbed model for credit card processing fees for the City. |
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Executive Summary: |
The City entered into an agreement with Paymentus in May 24, 2011 for processing credit card payments for utilities, ambulance, and solid waste services. The contracted rate is $3.25 per credit card transaction and limits transactions to $200. The $3.25 per transaction is currently paid for by the customer. The current agreement goes through the end of 2018.
In an effort to increase the number of customers who pay by credit cards instead of mailing checks or needing to come into the office, Finance proposed absorbing the fees in the 2017 budget. The City has been negotiating fees and different level of services with the current provider this year. We believe the renegotiated contract and fee levels are good.
The new agreement extends the contact to 2020 but reduces the credit card processing fees to $1.95/transaction from $3.25/transaction, and reduces the cap from $200/transaction to $2500/transaction. This will allow the City to absorb transaction fees under the proposed 2017 budgeted amount.
The City also negotiated two additional services as part of the contract.
The City will now have the opportunity to push notifications to delinquent account holders and give them the opportunity to pay over the phone before they are disconnected for nonpayment. Paymentus is offering this service free for the first 1,000 messages. This would cost $.09/call beyond 1000 messages per month. We typically have 800 delinquent accounts each month, which would incur no additional monthly fees.
Paymentus also will be providing an enhanced customer service portal that will give customers an opportunity to better manage their accounts and payments online. The current online payment opportunities can be confusing and unwieldly for customers.
The goal for our department is to have all changes completed by the end of 2016. There will be a communications push to inform customers of these changes. |
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Strategic Goal Area: |
Other |
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Fiscal Impact (Amount/Source): |
The fiscal impact to the City is estimated to be no more than a net $150,000 increase. This amount is included in the 2017 Finance budget. |
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Attachments: |
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