Placement: Consent Agenda
Action Requested: Motion / Vote
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Approve Amendment #1 to Contract #20210100 with Invoice Cloud, Inc. for Electronic Bill Presentment and Payment Services for the Utility Systems Department.
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Submitted By: Kevin R. Matyjaszek, Utility Systems Director
Strategic Plan Link: The City’s Mission to be financially responsible.
Summary Brief (Agreements/Contracts only)
1. Prepared by: Utility Systems Department (“USD”)
2. Parties: City of Port St. Lucie and Invoice Cloud, Inc., a Florida registered foreign corporation (“Vendor”)
3. Purpose: This Amendment to Contract #20210100 allows the rates for processing credit and debit card transaction fees, Electronic Fund Transfer (“EFT”), and Automated Clearing House (“ACH”) to “pass through” the costs to customers that were previously incurred by the USD for processing certain utility payments.
4. New/Renewal/Modified: Modified.
5. Duration: The Contract continues for a period of three years from December 13, 2022. The Contract automatically renews for additional successive three-year terms unless terminated.
6. Benefits to Port St. Lucie: The USD will no longer absorb the costs of the credit card, debit card, and other convenience fee transactions when electronic payments are made by its customers.
7. Cost to Port St. Lucie (Annual and Potential): The current model estimates an average expenditure to the City of $1,630,180.64 over 12 months. This Amendment, if approved, will result in an annual savings of $1,597,056.64. The cost of the services is anticipated to be reduced to $33,124.00 for a 12-month period.
Presentation Information: N/A
Staff Recommendation: Move that the Council approve Amendment #1 to Contract #20210100 to transfer the cost of processing credit card, debit card, and other transaction fees to the customer.
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve Amendment #1 to Contract #20210100 with Invoice Cloud, Inc.
2. Move that the Council not approve Amendment #1 and provide staff with direction.
Background: The City Council approved Contract #20210100 at its November 8, 2021 Regular City Council meeting. The USD currently absorbs the costs of all electronic payment transaction fees.
Issues/Analysis: To avoid any transaction fee, the customer can mail in or drop off a check at one of the two dedicated payment drop boxes located at the City Hall complex.
Financial Information: The reduction in the USD’s absorption of transaction fees will result in an estimated net savings of approximately $138,300.00 per month or $1,597,056.64 per year. If approved, the charge to the customer for paying their utility bill using a credit, debit card, or digital wallet transaction would be 2.75% of the bill amount with a $1.95 minimum fee. The transaction fee for the average usage monthly bill of $91.81 (5,000 gallons of usage) would be $2.43. Additionally, the EFT and ACH transaction fees will increase from $.50 to $.95 per transaction.
Other Local Utilities who pass through the fees to their customers:
St. Lucie County BOCC Auto Pay - Fees paid by SLC through invoice by Processor
In-House Payments $2.25 convenience fee added manually
*City of Vero Beach $4.95 per transaction
*Using Invoice Cloud to process payments
The Building Department uses Paymentus to process their credit card transactions with a 2.35% fee charged to customers.
USD Customers will see a separate charge on their credit/debit card statements.
Example:
City of Port St. Lucie 800-XXX-XXXX $ 100.00
Invoice Cloud 800-XXX-XXXX $ 2.65
Special Consideration: It is anticipated the USD will likely experience a payment shift away from customers making electronic payments to ACH payments or physical checks so they can avoid the fees. Should the increase in physical check payments be significant, it will increase the time spent by City staff to process payments.
Location of Project: Utility Service Area
Attachments:
1. Amendment #1 to Contract #20210100 Signed by the Vendor.
2. The original contract.
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 23212-04
Legal Sufficiency Review:
Reviewed by Alyssa Lunin, Deputy City Attorney. Approved as to Legal form and sufficiency by James D. Stokes, City Attorney.