Credit Card Payment Processing Service Fees

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Virginia Haynes
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1 CITY OF KINGSTON REPORT TO COUNCIL Report No.: TO: FROM: RESOURCE STAFF: Mayor and Members of Council Desirée Kennedy, City Treasurer Pat Carrol, Manager of Taxation and Revenue DATE OF MEETING: April 15, 2014 SUBJECT: Credit Card Payment Processing Service Fees EXECUTIVE SUMMARY: The City of Kingston previously entered into an agreement with Paymentus (Canada) Corporation to provide on-line property tax and Utilities Kingston bill payment services as a convenience to customers. The customer is responsible for paying a convenience fee to Paymentus for the use of the on-line payment service. Recent notification received from Paymentus indicated that a change to some credit card companies rules will only permit service providers to apply a service fee to a credit card when a local law (by-law) or regulation exists. Because the Council motion approving the agreement with Paymentus was passed before this notification was received, an additional by-law is now required in order to provide the service as originally intended in the agreement. Financial Services is requesting that Council authorize a by-law to permit a service fee to be charged by a third party service provider, where payment card transactions are used to remit payments to the municipality under a third party agreement. RECOMMENDATION: THAT a by-law be presented and given three readings at the same meeting to authorize where a payment card, specifically VISA, MasterCard, or any other payment card authorized for acceptance, is used to pay for the services listed in Schedule A to the draft by-law to establish a service fee for payment card processing services attached hereto, the payment card processing service fee be charged in addition to the originating charge. Council Meeting 15 April 15,

Payment Processing Service Fees EXECUTIVE SUMMARY: The City of Kingston previously entered into an agreement with Paymentus (Canada) Corporation to provide on-line property tax and Utilities Kingston

2 REPORT TO COUNCIL Report No.: April 15, Page 2 - AUTHORIZING SIGNATURES: Desirée Kennedy, City Treasurer Gerard Hunt, Chief Administrative Officer CONSULTATION WITH THE FOLLOWING COMMISSIONERS: Cynthia Beach, Corporate & Strategic Initiatives Lanie Hurdle, Community Services Denis Leger, Transportation, Facilities & Emergency Services N/R N/R N/R Jim Keech, President and CEO, Utilities Kingston (N/R indicates consultation not required) Council Meeting 15 April 15,

Administrative Officer CONSULTATION WITH THE FOLLOWING COMMISSIONERS: Cynthia Beach, Corporate & Strategic Initiatives

3 REPORT TO COUNCIL Report No.: April 15, Page 3 - OPTIONS/DISCUSSION: On October 15, 2013 Council approved the following recommendations from Report No Delegated Approval and Signing Authority Paymentus. 1. THAT Council approve the addition of a credit card payment solution for utility and property tax customers who choose to pay the associated convenience fee, with the potential to expand to other services upon review. 2. THAT Council waive the requirement under By-law No. 98-1, requiring the Mayor and Clerk to sign all agreements binding the Corporation, and delegate authority to the City Treasurer to execute all related service agreements with Paymentus (Canada) Corporation, subject to the satisfaction of the Legal Services Department. As a result of this approval, the City entered into a contract with Paymentus (Canada) Corporation, a third party service provider who offered a no-cost solution to the City whereby those who chose the option of using their credit card for payment would be required to pay any associated convenience fees. Subsequent to signing the above contract, Paymentus notified its customers that recent changes to some credit card companies rules would only permit service providers to charge a service fee on certain credit cards where a local regulation or by-law was passed. The recommendation in this report authorizes service fees to be charged to a credit card holder by a third party service provider for payment card services. It is necessary that the by-law be given three readings in order to provide these on-line credit card payment services as soon as possible. EXISTING POLICY/BY LAW: Pursuant to Section 391 of the Municipal Act, 2001, local municipalities are authorized to impose fees or charges on persons for services or activities provided or done by or on behalf of the municipality. The service fees contained in this report are intended to implement the terms and conditions of the City s contractual agreement with the third party payment processing service provider. NOTICE PROVISIONS: Not applicable ACCESSIBILITY CONSIDERATIONS: This report may be available in alternative formats upon request. FINANCIAL CONSIDERATIONS: There are no financial implications with respect to this report. The fees associated with credit card payments will be paid by bill payers who choose to use this optional payment method. Council Meeting 15 April 15,

THAT Council approve the addition of a credit card payment solution for utility and property tax customers who choose to pay the associated convenience fee, with the potential to expand to other

4 REPORT TO COUNCIL Report No.: April 15, Page 4 - CONTACTS: Desirée Kennedy, City Treasurer, extension 2220 Stephen Dickey, Deputy Treasurer, extension 2370 Pat Carrol, Manager of Taxation and Revenue, extension 2468 OTHER CITY OF KINGSTON STAFF CONSULTED: Hal Linscott, City Solicitor and Director of Legal Services Karen Matheson, IS Project Manager Randy Murphy, Chief Financial Officer, Utilities Kingston EXHIBITS ATTACHED: Exhibit A: Draft By-Law to Establish a Service Fee for Payment Card Processing Services Council Meeting 15 April 15,

Pat Carrol, Manager of Taxation and Revenue, extension 2468 OTHER CITY OF KINGSTON STAFF CONSULTED: Hal Linscott, City Solicitor and Director

5 Report No.: Exhibit A DRAFT BY-LAW NO XXX A By-Law to Establish a Service Fee for Payment Card Processing Services PASSED: WHEREAS on October 15, 2013 Council approved the addition of a credit card payment solution for customers who choose to pay an associated convenience fee; and WHEREAS Council would like to establish a service fee for payment card processing services with respect to property tax payments, Utilities Kingston bill payments and other services; NOW THEREFORE BE IT RESOLVED that the Council of the Corporation of the City of Kingston hereby enacts as follows: 1. Where a payment card, specifically VISA, MasterCard or any other payment card authorized for acceptance is used to pay for the services listed in Schedule A attached hereto, the payment card processing service fee is authorized to be charged in addition to the originating charge. 2. This By-Law shall come into force and take effect on the date of its passing. GIVEN ALL THREE READINGS AND PASSED: CITY CLERK MAYOR Council Meeting 15 April 15,

choose to pay an associated convenience fee; and WHEREAS Council would like to establish a service fee for payment card processing services with respect to property tax payments, Utilities Kingston

6 Schedule A By-Law No XXX Service/Payment Type Service Fee Third Party Service Provider Property Tax Billing 2.65% Paymentus (Canada) Corporation Utilities Kingston Billing Flat fee of $4.95 (Flat fee is based on a maximum utility payment amount of $200.00; multiple payments may be made) Paymentus (Canada) Corporation Council Meeting 15 April 15,

Billing 2.65% Paymentus (Canada) Corporation Utilities Kingston Billing Flat fee of $4.

Mayor and Members of Council Cynthia Beach, Commissioner, Corporate & Strategic Initiatives

CITY OF KINGSTON REPORT TO COUNCIL Report No.: 14-073 TO: FROM: RESOURCE STAFF: Mayor and Members of Council Cynthia Beach, Commissioner, Corporate & Strategic Initiatives Peter Huigenbos, Manager, Real