Agenda Item 8EAGENDA ITEM:
AGENDA I'rmm o RE
OCJOIMMR 14, 2013
CITY COMMISSION MEETING
STAFF REPORT
1. To authorize staff to sign a contract with BiIl2Pay, an
automated payment processing company, to implement an
Interactive Voice Response (IVR) system and a web hosted
payment portal,
2. To implement a convenience fee for all credit card
transactions.
SUBMITTED BY: Nelson Van Liere, Finance Director
DATE: September 9, 2013
STRATEGIC PLAN LINK: N/A
BACKGROUND: The City currently accepts payments for various transactions by a number
of methods. We accept cash, checks, credit cards, direct debit (automatic withdrawal from
your checking account), on -line banking checks and wire transfers. We also accept these forms
of payments through the mail, over the counter, over the phone, in the night drop box and
directly from the bank
Over the past few years, the number of transactions that occur over the phone has grown
significantly to about 1,300 per month. Phone transactions also peak on due dates as
numerous customers try to get through at the same time. The City's phone system cannot
support the number of calls without moving to an automated system. An automated system
will benefit the City by allowing unlimited simultaneous calls and it will free up the customer
service representatives to transact business with the walk -in customers without the phone
interruptions. Automation will also free up some time to devote to the back -room
reconciliations that have grown since we began taking credit cards. We would like to begin by
implementing automation of the payment processing functions by way of the following.
Create an IVR which is an automated phone payment taking system. This will allow
customers to pay bills 24/7 from anywhere. This will free up our customer service
representatives to better serve the customers at the counter and free up the phones
for other business during peak times.
II. Create a WEB page where our utility customers can go to pay their utility bills on -line
with an account number. This also enables 24/7 availability.
Consider a convenience fee for credit card payments. Currently the City pays all
credit card fees of about $28,000 per year.
AGENDA ITEM # 8E
OCTOBER 14, 2013
Bill2Pay pricing includes the phone service, programming fees, 24/7 customer support and data
transmission capabilities for reports of daily activity. Their program is also available for staff to
use when needed to look up customer payments throughout the day. Our current phone
system is overloaded on a regular basis on critical due dates. An additional benefit of selecting
Bill2Pay is that they also serve JEA customers. This means that some of our customers may
already be familiar with the service when paying their electric bill. Over time, people have
moved from doing business in person to the use of computers and phones. It is in the City's
best interest to move in that direction as well to save time, to be more accurate, and to be
more convenient for the customers. Our neighboring cities already provide these services.
Payment Processing Convenience Fee Options:
Option 1 Make no changes and continue business as usual. We will pay about
$28,000 in credit card fees.
Option 2 Pass the fees on to the customer with a minimum fee of $2.50 and a fee
of $2.50 per $100.00 of charges. This fee will include charging the customer the
credit card fee that the City now pays. This option will save the City from paying the
$28,000 in credit card fees, but will require a onetime set -up fee of $8,000. JEA and
Jacksonville Beach use this option.
Option 3 Charge no convenience fee. This option will mean the City will pay 2.6%
of every charge. This will increase our annual fees to about $50,000 from 28,000
including the set -up costs.
Option 4 A hybrid option where the City is charged the $2.50 / $100.00 of credit
card charges as in Option 2, but we then charge the customer a portion of that.
Charging $1.25 to the customer would result in the City splitting the cost with the
customer and would be approximately what we are currently paying.
BUDGET:
Currently, the budget has $28,000 included for the credit card fees. Bill2Pay requires $8,000 to
develop the programming for the IVR. Depending on the option chosen 2, 3, or 4, for the
convenience fee, the total cost to the City will vary as shown above.
RECOMMENDATION: Authorize the City Manager to enter into a contract with Bill2Pay, an
automated payment provider, to develop and implement an IVR, WEB page payment option
and implement these services to include a convenience fee (Option 2), for credit card
payments.
REVIEWED BY CITY MANAGER: