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HomeMy WebLinkAbout1995-01-17; City Council; 12981; AUTHORIZATION TO ACCEPT CREDIT CARDS IN PAYMENT OF CITY FEES, CHARGES, TAXES, AND SERVICES RENDERED BY THE CITY"r. fx t%. 2 z 0 F 0 a $ z 3 8 w Y GI Ut GAKLSBAU - Auk BILL 1 AB# la:4R/ TITLE: DEPT. HD. - CITY ATTY 1 MTG. 1-1 3- 95 DEPT. Fjfl AND SERVICES RENDERED BY THE CITY CITY MGR. c RECOMMENDED ACTION: AUTHORIZATION TO ACCEPT CREDIT CARDS IN PAYMENT OF CITY FEES, CHARGES, TAXES, -. Adopt Resolution No. 9 5- '0 authorizing the acceptance of credit cards in payment of City fees, charges, taxes and services rendered by the City. ITEM EXPLANATION: The California Government Code authorizes cities to accept credit cards for any of the following upon approval of its City Council: 1. The payment for the deposit of bail or for any fine for any offense not declared to be a felony. 2. The payment of a filing fee or other court fee. 3. The payment of any towage or storage costs for a vehicle which has been removed from a highway, or from public or private property, as a result of parking violations. 4. The payment of child, family, or other spousal support, including reimbursement of public assistance, related fees, costs, or penalties, with the authorization of the card holder. 5. The payment for services rendered by any city, county, city and county, or other public agency. 6. The payment of any fee, charge or tax due to a city, county, city and county, or other public agency. The City has accepted credit cards in payment of recreation fees at Harding Center, Stagecoach Park, Calavera Park and the swimming pool since 1989. Staff is now requesting authorization to accept credit cards for any fee, charge, tax or service rendered by the City which is allowable under the Code. The acceptance of credit cards in payment of City services and charges will provide a number of benefits to the City and its citizens and customers. First, it provides better customer service by offering other options for payment and allows those individuals that cannot afford to pay a bill in full to pay over time. Staff receives numerous requests to extend the payment schedule for certain billings over a period of time. Handling these individual payment plans take an enormous amount of staff time to set up and monitor. Credit card payment would be a much more desirable option for the City. The acceptance of credit cards will also help the City in its collection efforts. Often times people that cannot afford to pay a bill in full will not pay at all. By offering them the option of paying by credit card, the City is able to collect the debt immediately with a minimum of effort. Also, by using the Electronic Draft Capture (EDC) option available to us, the City will be able to verify the credit card immediately and will be paid by the credit card processor within 48 hours. This allows us to start earning interest on the funds sooner and puts all of the responsibility for collection on the credit card company rather than on the City. e 0 PAGE TWO OF AGENDA BILL NO. I a, 5 8.1 Ld Although staff is asking for authorization to accept credit cards for all uses authorized by the Code, credit cards will initially be accepted only at the current recreation sites and City Hall. They will not be accepted for payment of water bills. Staff will evaluate the program and the acceptance and use by our customers after it has been in place for a number of months. Then, if the program is considered acceptable to the City and the citizens, we may expand it to include the water district, the safety center, and the community development departments. FISCAL IMPACT: The cost to the City for accepting credit cards is based on the discount rate charged by the credit card processor and the cost of the EDC equipment. Staff talked with a several vendors and found that the discount rate for our volume of business would be around 1.75% with no charge for the equipment. This means that the City would pay a fee of 1.75% of any amounts charged by credit card in payment of City fees or taxes. The discount rate currently paid on the recreation charges is 4.6%. It is much higher due to two factors: one, we are not using EDC but rather a more manual system which means higher handling costs and thus a higher discount rate, and two, the average balance for recreation charges are low (about $40). The higher the average balance charged, the lower the discount rate. Thus, by allowing higher balance bills to be paid by credit cards (such as ambulance bills which have an average balance of $300), the City can lower its discount rate on all charges. For fiscal year 93-94, about 20% of the recreation fees were paid by credit card resulting in discount fees to the City of $7,500. Assuming that 20% of business licenses and ambulance fees also pay by credit card, the discount fee to the City using EDC (including recreation) would be about $8,000. Thus, for a minimal increase in expense, the City could offer its citizens the convenience of using credit cards for certain City charges. As stated earlier in this report, the program may be expanded to include all City charges if it is found to be effective and desirable. Any increased costs and/or increased revenues would be included in the budget at that time. The Government Code does allow for a City to impose a fee for the use of credit cards in the amount of the costs incurred by the city (including the discount rate) in providing for payment by credit card. Staff is not recommending the imposition of a fee at this time as it would discourage the use of credit cards and may not be understood by the customers causing dissatisfaction with the City’s services. After Council’s approval of the acceptance of credit cards in payment of City charges and fees, a contract with a credit card issuer will be necessary which contains all elements required by Government Code Section 61 59(c) regarding, among otherthings, presentment, acceptability and payment of drafts. EXHIBITS: 1. City Council Resolution No. 01 5 -I o authorizing the acceptance of credit cards in payment of City fees, charges, taxes and services rendered by the City. ? I " 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 0 0 RESOLUTION NO. 95-10 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE ACCEPTANCE OF CREDIT CARDS IN PAYMENT OF CITY FEES, CHARGES, TAXES AND SERVICES RENDERED BY THE CITY WHEREAS, the California Government Code, Chapter 2.5, Section 6159 (the Code) authorizes cities to accept credit cards in payment of any of the following: 1. The payment for the deposit of bail or for any fine for any offense not declared to be a felony. 2. The payment of a filing fee or other court fee. 3. The payment of any towage or storage costs for a vehicle which has been removed from a highway, or from public or private property, as a result of parking violations. 4. The payment of child, family, or other spousal support, including reimbursement of public assistance, related fees, costs, or penatties, with the authorization of the cardholder. 5. The payment for services rendered by any city, county, city and county, or other public agency. 6. The payment of any fee, charge or tax due to a city, county, clty and county, or other public agency; and WHEREAS, the Code states that a city desiring to authorize the use of a credit card pursuant to Section 61 59 shall first obtain the approval of its City Council; and Ill Ill ?a - 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Q e WHEREAS, the City of Carlsbad desires to authorize the use of credit cards pursuant to Section 6159. NOW, THEREFORE, BE IT RESOLVED by the City Council of the Crty of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the City Council of the City of Carlsbad does hereby authorize the use of credit cards for all purposes as set forth in the California Government Code, Section 6159. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council on the 17 th day of JANUARY , 1995, by the following vote, to wit: AYES: NOES: None ABSENT: None Council Members Lewis, Nygaard, Kulchin, Finnila, Hall ATTEST: UR .Pz ALETHA L RAUTENKRANZ, City Clerk (SEAL)