06-07-2021 Council Work Session Packet

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WS – Item 3 WORK SESSION STAFF REPORT Work Session Item No. 3 Date: June 7, 2021 To: City Council From: Hannah Lynch, Finance Director Re: Electronic Municipal Payments Background The city’s financial software has recently expanded their cashless payment system to include payments for licenses and fees such as land use application fees, sign permit, park shelter reservation, dog licenses, police report copies, liquor licenses, burning permit, special event permit, etc. Implementing electronic municipal payments for these licenses and fees is already included and integrated with the financial software at no additional cost. The decision that needs to be made is whether the city will cover the credit card transaction fees or if those will be passed through to the customer. Credit card payments are currently accepted for utility bills and building permits. The city pays the credit card fees for utility billing transactions, but passes the fees along to the customer for building permit transactions. Utility billing credit card processing is integrated with the financial software. Each card processed has a $1.00 per transaction fee as well as a fee charged by Visa or Mastercard which is typically $0.65 or $0.75 per transaction. Building permit credit card processing is not integrated with the financial software, but is integrated with the building permit software. The fee passed through to the customer is 3.5% per transaction plus an additional $0.75 if the payment is less than $100.00. There is also an option to process an eChecking or eSavings payment at a flat fee of $1.00 per transaction. Similar to utility billing credit card processing, each card processed for these other municipal payments would have a $0.50 per transaction fee as well as a fee charged by Visa or Mastercard which is typically $0.65 or $0.75 per transaction. It should be noted that Visa and Mastercard dictate that only up to 4% of the transaction can be passed along to the customer in fees so, in order to fully recoup all fees, credit cards payments could only be accepted for municipal payments over $30.00. That would leave transactions such as police and park fees with only the ability to pay by cash or check.