HomeMy WebLinkAbout40-12 RESOLUTIONRESOLUTION NO. 40-12
A RESOLUTION TO REPEAL RESOLUTION NO. 117-00 AND TO
AUTHORIZE THE ADMINISTRATION TO FORGO REQUIRING
CUSTOMERS USING A CREDIT OR DEBIT CARD TO PAY A
"CONVENIENCE FEE" FOR SUCH USAGE
WHEREAS, the administration believes it would be more efficient and cost effective to
end the requirement of the current "convenience fee" charged to credit and debit card customers.
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby repeals
Resolution No. 117-00 and authorizes the Administration to forgo requiring customers using a
credit or debit card to pay a "convenience fee" for such usage.
PASSED and APPROVED this 21st day of February, 2012.
APPROVED: ATTEST:
By:
LI $ ELD N, Mayor
By: (bran
LISA BRANSON, Deputy City Clerk
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Paul A Becker
Submitted By
City of Fayetteville Staff Review Form
City Council Agenda Items
and
Contracts, Leases or Agreements
2/21/2012
City Council Meeting Date
Agenda Items Only
Finance
Division
Action Required:
Finance and Internal Services
Department
This request is to rescind Resolution 117-00 which would allow the Adiministration to eliminate the convience fee for
payments received by the City through the Cities financial system. This would result to the initial loss of approximately
$103,000 but would encourage efficiencies in procceing payments and result in the delay of future staff increases.
$103,000
Cost of this request
Account Number
Project Number
Budgeted Item
Category / Project Budget
Program Category / Project Name
Funds Used to Date Program / Project Category Name
Remaining Balance Fund Name
Budget Adjustment Attached
Department Director
City Attorney
'2-1-10 II Previous Ordinance or Resolution #
Date
—l—cz
Date
,l-2pi
Finance and Internal Services Director Date
Original Contract Date:
Original Contract Number:
Received in City 02-07-12 A11:00 R C V D
Clerk's Office
ttikA
Comments:
Revised January 15, 2009
THE CITY OF FAYETTEVILLE, ARKANSAS
DEPARTMENT CORRESPONDENCE
www.accessfayetteville.org
CITY COUNCIL AGENDA MEMO
To: The City Council
Thru: Mayor Jordan
From: Paul A Becker
Date: 2/7/2012
Subject: Elimination of the credit card convenience fee for credit card payments
PROPOSAL:
As you are well aware, the most frequent complaint we all receive concerning the billing system is "why the
City charges a convenience fee for the use of a credit card". Since Mayor Jordan was elected he has been
communicating his desire to eliminate this fee. Additionally, most of you as Council members have expressed
to the administration the desire to eliminate this fee. Although, I initially recommended the fee be eliminated as
a part of a rate change, because of new systems developed by the City which expand the ability of citizens to
pay amounts due the City by credit card, I now believe and have recommended to the Mayor that this is the
appropriate time to eliminate the fee. The Mayor has always supported the elimination of the fee as many of you
have. To accomplish this, resolution 117-00 must be rescinded by the Council.
The arguments against the use of a convenience feel are as follows:
• The processing cost to the City are reduced if an account is paid by credit card since there is
little manual handling required.
• If the City is truly supporting a greener economy, the avoidance of a credit card fee
encourages the use of a check which must be mailed requiring the use of paper. Thus
requiring less paper, mail processing, routing, and transportation to City Hall or Post Office to
mail the payment.
These are strong reasons that support the need to eliminate the convenience fee.
RECOMMENDATION:
Therefore, on behalf of Mayor Jordan, I am requesting the City Council rescind resolution 117-00 which
would allow us to eliminate the convenience fee on credit card payments paid through City maintained systems.
BUDGET IMPACT:
The initial impact of this request will result in a loss of $103,000 in convenience fee collections. However,
the elimination of the fee will encourage the use of credit card payment which will reduce the need for manual
intervention. This will in turn defer the need to expand personnel to accommodate our growing customer base to
future periods. It will also reinforce the Cities commitment to encourage the reduction of paper used associated
with payment by check.
RESOLUTION NO.
A RESOLUTION TO REPEAL RESOLUTION NO. 117-00 AND TO
AUTHORIZE THE ADMINISTRATION TO FORGO REQUIRING
CUSTOMERS USING A CREDIT OR DEBIT CARD TO PAY A
"CONVENIENCE FEE" FOR SUCH USAGE
WHEREAS, the administration believes it would be more efficient and cost effective to
end the requirement of the current "convenience fee" charged to credit and debit card customers.
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby repeals
Resolution No. 117-00 and authorizes the Administration to forgo requiring customers using a
credit or debit card to pay a "convenience fee" for such usage.
PASSED and APPROVED this 21st day of February, 2012.
APPROVED: ATTEST:
By: By:
LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
FAYETTEVILLE
THE CITY OF FAYETTEVILLE, ARKANSAS
KIT WILLIAMS, CITY ATTORNEY
DAVID WHITAKER, ASST. CITY ATTORNEY
DEPARTMENTAL CORRESPONDENCE
LEGAL DEPARTMENT
TO: Lioneld Jordan, Mayor
Don Marr, Chief of Staff
Paul Becker, Finance Director
Marsha Hertweck, Accounting Director
Rainy Laycox, Billing and Collection Manager
FROM: Kit Williams, City Attorney `' - ----�
DATE: January 6, 2010
RE: Requiring Service Charge Payment for Credit Card Use
A decade ago, Budget Director Stephan Davis wrote a memo to Mayor
Hanna and the City Council supporting the allowance of use of credit cards by
water and sewer customers. In this memo, Mr. Davis stated categorically:
"The City isprohibited by state statute from absorbing
the discount fees assessed by credit card companies
for transactions paid with credits cards."
In 2006, I was asked about this and informed the Billing and Collections
Manager and Accounting Manager that the statute cited by Mr. Davis in support of
his statement did not "require the City to charge a service fee for credit cards used
to pay water bills."
I did point out that the City policy has been established by Resolution
No. 117-00 which states:
"A convenience fee shall be charged for such use of a
credit (debit) card in the amount more or less equivalent
to the discount fee charged by the servicing bank or
financial institution."
In my memo of September 26, 2006, I then stated:
"We are required to abide by this Resolution. I could find
no absolutely clear statutory requirement to charge a
service fee for water, sewer or sanitation fees in the
Arkansas Code."
It could be argued that without charging this "convenience fee", the City
would not be collecting the minimum rate set by our water, sewer, and solid waste
rate ordinances, even though the customer would be paying the minimum rate.
Our collection would be slightly less than the payments.
A.C.A. §14-234-103 Improvements; issuance of bonds states: "The
ordinance shall fix the minimum rate or rates for water to be collected prior to
payment of all of the bonds ...." (emphasis added) Without charging the existing
"convenience fee", the City would technically not be collecting the minimum rate.
This chapter of the State Code deals primarily with bonds for water works and
their repayment. The more detailed sewer requirements are found in A.C.A.
§ 14-235-223 which uses "paid" rather than "collected."
CONCLUSION
Unless allowing the use of credit card payments without the additional
"convenience fee" would endanger our water revenue bond payments, I do not
believe there is a statutory requirement for such "convenience fee."
In my memo of September 26, 2006, I then stated:
"We are required to abide by this Resolution. I could find
no absolutely clear statutory requirement to charge a
service fee for water, sewer or sanitation fees in the
Arkansas Code."
It could be argued that without charging this "convenience fee", the City
would not be collecting the minimum rate set by ourwater, sewer, and solid waste
rate ordinances, even though the customer would be paying the minimum rate.
Our collection would be slightly less than the payments.
A.C.A. §14-234-103 Improvements; issuance of bonds states: "The
ordinance shall fix the minimum rate or rates for water to be collected prior to
payment of all of the bonds ...." (emphasis added) Without charging the existing
"convenience fee", the City would technically not be collecting the minimum rate.
This chapter of the State Code deals primarily with bonds for water works and
their repayment. The more detailed sewer requirements are found in A.C.A.
§ 14-235-223 which uses "paid" rather than "collected."
CONCLUSION
Unless allowing the use of credit card payments without the additional
"convenience fee" would endanger our water revenue bond payments, I do not
believe there is a statutory requirement for such "convenience fee."
RESOLUTION NO. 117-00
SCANNED
MICROFILMED
A RESOLUTION ALLOWING CREDIT /DEBIT CARDS TO BE
USED WHEN MAKING CERTAIN PAYMENTS TO THE CITY
OF FAYETTEVILLE, AND ESTABLISHING A CONVENIENCE
FEE FOR SUCH USE.
WHEREAS, §34.02, Collection of Funds, of the Code of Fayetteville, provides that the
department of finance shall have the responsibility for collection of funds for the City of Fayetteville
in accordance with the rules and regulations adopted by the City Council, and;
WHEREAS, the City Council wishes to amend the rules and regulations to allow for the use
of credit/debit card and to establish a convenience fee for such use.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF FAYETTEVILLE, ARKANSAS:
Section 1. Credit/debit cards may be used for the payment of utility deposits, monthly utility
bills, municipal court fines and fees, park fees, and other City fees. A convenience fee shall be
charged for such use of a credit/debit card in an amount more or less equivalent to the discount fee
charged by the servicing bank or financial institution.
AND APPROVED this 15th day of August , 2000.
APPROVED:
By:
411
By: 1r �f�% , % ci ✓�
eather Woodruff, City
Fre Hanna, Mayor