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Home My WebLink About25C - AGMT MERCHANT PAYMENT SRVSREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 6, 2017 TITLE: THIRD AMENDED AGREEMENT FOR MERCHANT PAYMENT SERVICES WITH TRANSFIRST, LLC (STRATEGIC PLAN NO. 4, 1; 7, 5F) / o CITY ANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to execute a third amended agreement with TransFirst, LLC for a one year extension of TransFirst, LLC's existing cashiering credit card merchant payment services agreement, effective July 1, 2017 through June 30, 2018, for an amount not to exceed $165,000 subject to non -substantive changes approved by the City Manager and City Attorney. 2. Authorize City staff to release a Request for Proposals (RFP) for integrated cashiering merchant payment processing before December 31, 2017. DISCUSSION The Treasury & Customer Service Division of the Finance and Management Services Agency ("Treasury") is responsible for maintaining all monetary transactions related to City services. Currently, customers may utilize a credit card to pay City assessed taxes, permits, fees, fines and other monies due to the City. Acceptance of a credit card as payment involves utilizing a merchant payment processor such as TransFirst, LLC ("Trans First"). TransFirst presents credit card payments on behalf of all City facilities integrated into the citywide cashiering system. In March 2012, City Council authorized a moratorium on the imposition of City credit card processing fees in order to promote electronic payments by customers. In seeking to reduce associated costs to the City, Treasury, in March 2013, approached the City's cashiering merchant payment processor, TransFirst, and negotiated a reduction in the TransFirst discount fee from 1.5% to 0% resulting in a savings of over $55,000. TransFirst agreed to maintain the reduced rate for the life of its agreement with the City. Thereafter, in lieu of releasing an RFP for continuing merchant payment processing services, City Council, in June 2013, instead authorized a three-year agreement with Vizant Technologies, LLC, ("Vizant") ending December 2016, for continuous credit card processing costs reduction analysis. 25C-1 Third Amended Agreement for Merchant Payment Services with TransFirst, LLC June 6, 2017 Page 2 This agreement with Vizant was entered into in recognition of the highly commoditized nature of credit card merchant payment processing, services in which price, among competent service suppliers, is typically the primary component of the selection process. The agreement authorized Vizant to lead a City RFP in the event their analysis indicated a potentially realizable long-term savings by re -bidding credit card merchant processing services. During the term of this agreement Vizant's continuous analyzes indicated that no long-term net costs savings could be realized when comparing potential competing providers against TransFirst's reduced credit card merchant payment processing rate. On that basis, City Council in June 2015, approved a First Amended Agreement with TransFirst (Agreement #A-2015-117) to extend the term of the existing agreement with TransFirst (Agreement #A-2014-071) through June 30, 2016 with a further option exercisable by the City Manager to extend the agreement by letter for one additional year from July 1, 2016 through June 30, 2017. The First Amended Agreement included an annual 'expenditure cap of $95,000. However, due to the rapid growth in credit card payments made by residents and businesses, both in terms of number of transactions and sales volume, staff anticipated that the annual cap might be exceeded. As such, on June 21, 2016, the annual cap amount was increased to $165,000 per year via a Second Amended Agreement (Agreement #A-2014-148). On June 27, 2016, the City exercised its option to extend the underlying TransFirst agreement to June 30, 2017. Subsequently, in February 2017, the Police Department replaced its parking citation processor, Phoenix Group, with a new processor, Data Ticket, Inc. (Agreement #A-2017-026) requiring an upgraded integration with the City's city-wide cashiering system and payment kiosk for which TransFirst is incorporated as credit card merchant processor. Therefore, staff recommends extending TransFirst's contract for one additional year to allow the City time to fully assess the upgraded functionality of the system prior to issuing an RFP before December 31, 2017, in connection with future merchant payment services commencing July 1, 2018. STRATEGIC PLAN ALIGNMENT Approval of this item assists the City in meeting Goal #4 City Financial Stability, Objective #1 (maintain a stable, efficient and transparent financial environment) and Goal #7 - Team Santa Ana, Objective #5F (explore opportunities to engage with outside agencies, both private and public, to share information and increase efficiencies). FISCAL IMPACT Funds up to the annual amount of $165,000 in account no. (various -62300) are budgeted and available, upon Council approval for FY 2017-18 on an allocated basis in various departmental accounts. 25C-2 Third Amended Agreement for Merchant Payment Services with TransFirst, LLC June 6, 2017 Page 3 APPROVED AS TO FUNDS AND ACCOUNT: l�hS�t� y r Francisco Gutierrez, Executive Director Finance and Management Services Agency EXHIBIT: 1. Third Amended Agreement F -Al CAVAM 25C-3 25C-4 EXHIBIT 1 THIRD AMENDMENT TO AGREEMENT THIS THIRD AMENDMENT TO AGREEMENT, is entered into on this 60' day of June 2017, by and between TransFirst, LLC, (hereinafter "Consultant"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (hereinafter "City"). RECITALS: A. The parties entered into a payment processing service agreement (Agreement 4A- 2014-071) dated April 18, 2014 (hereinafter "said Agreement") by which Consultant has provided payment processing services to the City. B. The parties subsequently entered into a First Amendment to said Agreement (A-2015- 117) on June 17, 2015 to increase the Compensation and Term of said Agreement. C. The parties subsequently entered into a Second Amendment to said Agreement (A- 2016-148) on June 21, 2016 to increase the Compensation of said Agreement. D. In accordance with the terms and conditions of said Agreement, the parties wish to amend the Term of said Agreement to provide for a one (1) year extension beginning July 1, 2017 and ending June 30, 2018. E. The parties also wish to amend and add Compensation for the extended Term. WHEREFORE, in consideration of the covenants contained in said Agreement, and subject to all the terms and conditions of said Agreement, except those amended in the aforementioned First and Second Amendments to said Agreement, the parties agree as follows: 1. The parties hereto now desire to amend Section 3. of said Agreement (TERM). This Third Amendment to Agreement shall commence on July 1, 2017 and terminate on June 30, 2018, or unless terminated earlier in accordance with Section 12 of said Agreement. 2. The parties hereto now desire to amend Section 2. of said Agreement (COMPENSATION) to extend the increase in annual compensation agreed to by the parties pursuant to the Second Amendment to Agreement to include the one (1) year extended term of this Third Amendment to Agreement. The total sum to be expended under the amended term of said Agreement shall not exceed $165,000. 3. This Third Amendment to said Agreement must be signed below and may be signed in counterpart and delivered by fax, emailed as a PDF (Portable Document Format) file attachment, or by other means that displays the original or a copy of the signatures. Any subsequent amendments may be signed and delivered in the same manner. 1 25C-5 IN WITNESS WHEREOF, the Parties hereto have executed this Third Amendment to Agreement on the date and year first written above. ATTEST: CITY OF SANTA ANA MARIA D. HUIZAR CYNTHIA J. KURTZ Clerk of the Council Interim City Manager APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney Lisa Storek Assistant City Attorney RECOMMENDED FOR APPROVAL: TRANSFIRST, LLC. Francisco Gutierrez, Execrative Director Finance & Management Services Agency 3 25C-6 Name: Title: Tax ID#