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AGENDA ITEM <br />Prepared By: RJO Reviewed By: DJR Approved By: DJR <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />1. Purpose. The purpose of this agenda item is to gain council approval for the institution of a <br />convenience fee for credit card transactions. <br /> <br />2. Background. The City has been accepting credit card payments for payments since 2010. When a <br />credit card payment is accepted, the City is charged a processing fee by our credit card processor. <br />Governmental entities have the ability to charge a convenience fee to recover these costs. At the time that <br />the decision to accept credit card payments was made, the Council decided not to charge a convenience <br />fee. As the use of credit cards has increased, the amount of the convenience fee has grown significantly. <br /> <br />Last month, a single credit card transaction resulted in a $1,500 processing fee. This transaction led to <br />staff initiating a review of the amount being paid for credit card processing. For the first ten months of <br />2019 the amount paid for processing fees totals $32,492.46. By year’s end this amount will be <br />approaching $40,000. The institution of a 2.75% convenience fee would cover the amount of the current <br />processing fee expenditures. <br /> <br />Customers will, and currently have, the ability to pay for their services through alternative methods that <br />would not incur a convenience fee. These include payment by check or cash, and ability to pay by direct <br />debit of their bank account. The direct debit option is available for selection when the online payment <br />screen is accessed. <br /> <br />A portion ($3,661.86) of the processing fees that have been charged to the City in 2019 are at the golf <br />course. Because the golf course is more retail in nature, and customers would not expect to have a <br />convenience fee added to their payment, staff is not recommending that a convenience charge be applied <br />at that location. <br /> <br />3. Cost. There is no cost to this action. It will result in an increase of revenue that will offset <br />expenditures. <br /> <br />4. Staff Recommendation. Staff recommends the addition of a convenience fee of 2.75% effective <br />January 1st 2020. This fee will be added to the 2020 fee schedule. <br /> <br />COUNCIL ACTION REQUESTED <br />Motion to approve the institution of a convenience fee on non-retail credit card transactions. <br /> <br /> <br /> <br />Item No.: 4 Date: November 12, 2019 <br />Item Description: Credit Card Convenience Fee <br />Presenter: Ron Olson <br />Finance Director <br />Agenda <br />Section: <br />Consent Agenda