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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />SEPTEMBER 4, 2012 <br />CLERK OF COUNCIL USE ONLY: <br />TITLE: APPROVED <br />RESOLUTION TO EXTEND THE SUSPENSION OF ❑ <br />CREDIT CARD /ELECTRONIC FUNDS TRANSFER ❑ <br />TRANSACTION FEE ❑❑ <br />-' 1 <br />jf,,lTY MANAGER <br />RECOMMENDED ACTION <br />As Recommended <br />As Amended <br />Ordinance on 1st Reading <br />Ordinance on 2nd Reading <br />Implementing Resolution <br />Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Adopt a resolution to extend the suspension of the credit card and electronic funds transaction <br />fee through June 30, 2013. <br />DISCUSSION <br />The Treasury Division of the Finance and Management Services Agency is responsible for <br />maintaining all banking related transactions for the City. A component of banking is payment <br />processing. Currently, Municipal Utility Services customers are able to pay their utility bill by <br />check, cash, credit card or on -line with the use of a credit card or a debit to their bank account <br />through an Electronic Funds Transfer. The City charges $3.54 for the use of credit card or on- <br />line payment services. <br />Payees are reluctant to use on -line payment services when a fee is involved and resort to paper <br />and mail methods. Paper processing is very labor intensive and costly. A reduction in staff <br />through attrition has necessitated revisiting labor intensive processes for alternatives. To <br />accommodate requests for on -line services and to encourage on -line payment, staff <br />recommended a six month moratorium of the credit card /electronic funds transaction fee in <br />February, 2012. Staff was to report back to the City Council with a recommendation as to <br />continuing a moratorium of the fee. During the six month moratorium, payments via on -line have <br />increased from 18.29% to 83 %. Payments processed via check(s) are down from 18.4% to <br />10.3 %. This trend is precisely the momentum needed to shift payment processing from paper to <br />automation which coincides with the direction that the Treasury Division desires to take. A <br />noticeable reduction in walk -in traffic has been experienced since the moratorium of the fee was <br />implemented. Staff has reported improved customer service and satisfaction due to the reduced <br />walk -in traffic and lines. <br />Overall, the removal of the credit card /on -line payment processing fee has resulted in increased <br />automated payment processing, resulting in providing customers with services that industry is <br />recognized as providing as a cost of doing business, and eliminates the need to hire staff for <br />manual processing. We have received positive comments relating to the moratorium of the fee <br />and have included some of those comments (exhibit 2). <br />55A -1 <br />