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HomeMy WebLinkAbout55A - RESO - EXTEND SUSPENSION TRANSACTION FEESREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: SEPTEMBER 4, 2012 TITLE: RESOLUTION TO EXTEND THE SUSPENSION OF CREDIT CARD/ELECTRONIC FUNDS TRANSFER TRANSACTION FEE j ITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1st Reading ? Ordinance on 2nd Reading ? Implementing Resolution ? Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution to extend the suspension of the credit card and electronic funds transaction fee through June 30, 2013. DISCUSSION The Treasury Division of the Finance and Management Services Agency is responsible for maintaining all banking related transactions for the City. A component of banking is payment processing. Currently, Municipal Utility Services customers are able to pay their utility bill by check, cash, credit card or on-line with the use of a credit card or a debit to their bank account through an Electronic Funds Transfer. The City charges $3.54 for the use of credit card or on- line payment services. Payees are reluctant to use on-line payment services when a fee is involved and resort to paper and mail methods. Paper processing is very labor intensive and costly. A reduction in staff through attrition has necessitated revisiting labor intensive processes for alternatives. To accommodate requests for on-line services and to encourage on-line payment, staff recommended a six month moratorium of the credit card/electronic funds transaction fee in February, 2012. Staff was to report back to the City Council with a recommendation as to continuing a moratorium of the fee. During the six month moratorium, payments via on-line have increased from 18.29% to 83%. Payments processed via check(s) are down from 18.4% to 10.3%. This trend is precisely the momentum needed to shift payment processing from paper to automation which coincides with the direction that the Treasury Division desires to take. A noticeable reduction in walk-in traffic has been experienced since the moratorium of the fee was implemented. Staff has reported improved customer service and satisfaction due to the reduced walk-in traffic and lines. Overall, the removal of the credit card/on-line payment processing fee has resulted in increased automated payment processing, resulting in providing customers with services that industry is recognized as providing as a cost of doing business, and eliminates the need to hire staff for manual processing. We have received positive comments relating to the moratorium of the fee and have included some of those comments (exhibit 2). 55A-1 Resolution to Extend the Suspension of Credit Card /Electronic Funds Transfer Transaction Fee September 4, 2012 Page 2 The Finance and Management Services Agency is aiming towards providing access to Treasury Division services on a 24 hour/seven days a week basis. To accomplish this goal, on-line application and payment of Business Licenses and a kiosk is scheduled to be located at the entrance of City Hall by the end of the year. On-line application and payment of Dog Licenses, Parking Citations, etc. are planned for next year. An interactive voice response system is also planned for these programs. As such, staff recommends continuing the moratorium to lay the groundwork for the success in transitioning to an automated less labor intensive operation. FISCAL IMPACT Salary and benefit costs in the Treasury Division budget to be offset by the revenue suspension in the credit card/electronic funds transfer fees, estimated to be a net zero cost. Francisco Gutierrez Executive Director Finance & Management Services Agency FG/CCD Exhibits 1. Resolution 2. Customer Comments re: Rescinding Credit Card/On-line Payment Fees 55A-2 Lss8/13/12 RESOLUTION NO. 2012-XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA EXTENDING THE SUSPENSION THE CREDIT CARD / ELECTRONIC FUNDS TRANSFER TRANSACTION FEE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. The City Council adopted Resolution 2012-004, on February 21, 2012, suspending the imposition of transaction fees for on-line payments, to encourage City customers to apply for services and pay City utility, permit and license fees on-line. B. The transaction fee suspension was authorized for a six-month trial period after which the Executive Director of Finance and Management Services is to report regarding the effect of the suspension on the number of on-line customers and cost savings to the City. C. The executive director has issued his report finding that during the period that the on-line payment transaction fee has been suspended, on-line payment fees have increased markedly, thus reducing the number of City personnel required to process payments and provide customer services. D. The decrease in revenue as a result of the transaction fee waiver is offset by reduced salary and benefit costs in the Treasury Division budget as more customers are paying bills and obtaining services on-line. Section 2. The City Council hereby suspends the transaction fee imposed on each electronic funds transfer and on each credit card transaction, through the 2012/2013 fiscal year. Section 3. The Executive Director of Finance and Management Services shall provide a report to this City Council in June 2013, regarding 1) the effect of the waiver of electronic funds transfer fees on staff from customers who apply for services and pay Resolution No. 2012-XXX 55A-3 Page 1 of 2 bills on-line instead of coming to City Hall, and 2) the cost savings to the City resulting from the suspension of the transaction fees. Section 4. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of 2012 Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Laura Sheedy Assistant City Attorney AYES: Councilmembers NOES: Councilmembers ABSTAIN NOT PRESENT Councilmembers Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2012-XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Clerk of the Council City of Santa Ana Resolution No. 2012-XXX 55A-4 Page 2 of 2 Customer Comments on Recinding of Transaction Processing Fee Date Acct 03/18/12 19453301 Thank you for removing the internet fee. This is a much easier way to pay. I know the full amount will always be paid on time, even when I go on a vacation. Thank you again. Online payments is a very good idea, especially if there is no charge for doing so. I welcome the offer. It would obviously be more convenient than writing a check and mailing envelope. However, on this statement in which you commendably encourage comments about online payment, I wish you had also 03/26/12 24167300 shown a web address to which I could actually make a payment or post a comment. Even better, could you make this an automatic deduction from a VISA? If the charge for online payment is waived only for six months, I will continue to just write a check (unless the countinuing rise of postage exceed the cost of online payment which might well be the case). As long as there is no fee, I will always pay online. If the fee is removed permanently, I will, in time, go with 03/29/12 22211300 paperless billing. If the fee is reinstated, I will pay by mail. If managed correctly, I know it saves you money with online payments, so the fee is ridiculous in the first place. 03/31/12 26415300 Thank you for finally making it possible, and affordable, to pay online. I have been asking and waiting for approximately ten years for this service. 04/13/12 24863301 Please keep waving the processing fee of 3.54 as I dislike sending in payment via check but will do so because $3.54 to make a payment is too much. Thank you! 04/20/12 23445303 Thank you for removing the service fee to make payments online - very covenient for me. 04/29/12 23826300 1 have been waiting for you to remove the fee if paid on line. On the last bill statement you indicated so. Wonderful and thanks for listening. 05/03/12 34531303 1 just want to say thank you for suspending the processing fee. I pay all my bills online its easy and convenient. Hope you keep it this way. Thank You. I am commenting on the fact that you suspended the processing fee for on line payment. I would always 05/14/12 14184300 pay online if you continued this and you would be able to go paperless on lots of people and save the money if you didn't charge a processing fee. 05/14/12 41377300 Thank You for elimanating the $3.54 on line payment fee, this helps my budget as a senior. I am a new customer and am very please that you ofer an online payment program. However, if you revert 05/22/12 20319302 back to the $3.54 processing fee, it will be cheaper for me to spend 45 cents and mail you a check. I feel that in the end it would be worth your while to continue the service free of charge. Please weigh this information in making your decision after the 6 month moratorium. I want to thank the City of Santa Ana for approving the vote to remove the $3.54 fee to make water 05/23/12 26588300 payments online. I pay ALL of my bills online with no fees so to find out today by Alfonso that the service is no free was very exciting. It saves me time having to drop my payment in the over night drop box. Great job! 05/27/12 25011301 Thank you for waiving the online processing fee! I look forward to paying this bill online as I do with all my others. 06/05/12 22952300 We have used the online payment but don't like the charge 06/11/12 Thank you for allowing payment without additional fee. It is appreciated. 06/24/12 25288300 1 like the online payment ability without have to pay a servcie charge for my utilities. 07/10/12 24149300 1 like this confirm method. Thank you for making your payment process, user friendly. 07/24/12 n/a I really do appreciate the fact that you do not charge for on-line payment. 55A-5 55A-6