Camarillo City Council
AGENDA REPORT
Date: August 27, 2025
To: Honorable Mayor and City Councilmembers
From: Greg Ramirez, City Manager
Submitted by: Dave Klotzle, Public Works Director
Subject: Contactless Credit/Debit Card Transit Fare Payment System Agreement – Enghouse, Inc. and Discounted Transit Fares for Veterans
BACKGROUND
The City of Camarillo’s FY 2025/26 Strategic Plan Council Goals and Objectives, includes Objective 4.4, which is to “Evaluate potential measures to improve public transit.” One such measure is to make it easier for passengers to pay for transit services. Currently, passengers are not able to pay their transit fare with a credit or debit card when boarding fixed route (bus) or dial-a-ride services. Several transit operators in Ventura County have expressed interest in accepting credit cards for bus fare payment. The Ventura County Transportation Commission (VCTC) has been working with the California Integrated Travel Project (Cal-ITP) to implement credit card payments for bus services.
In 2021, the State Department of General Services (DGS) issued Requests for Proposals for the three categories of services required to implement contactless payment for transit fares. DGS awarded Master Service Agreements (MSA) to three vendors (INIT, Kuba, and SC Soft) for payment acceptance hardware devices (Category A), and to four vendors (INIT, Bytemark, Enghouse, and Littlepay) for transit processor services for fare calculations (Category B). In addition, MSAs were awarded to Elavon and Fiserv for payment processing services (Category C). The DGS procurement process and executed MSAs are all compliant with Federal Transit Administration (FTA) requirements.
With assistance from Cal-ITP, VCTC staff solicited proposals from all available state contractors with DGS MSAs for payment hardware and processing services. VCTC received two proposals for payment acceptance devices from Kuba, Inc., and SC Soft, Inc.; and two proposals for transit processor services from LittlePay and Enghouse.
VCTC evaluated all proposals and selected Kuba, Inc. as the preferred vendor for payment acceptance devices (Category A). Of the proposals received, Kuba’s proposal
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included the most detailed project implementation timelines and work plans.
For the transit processor services (Category B), VCTC staff selected Enghouse, Inc. After speaking with the vendor, receiving a demo, and leaning on the technical guidance from the Cal-ITP team, VCTC staff believes Enghouse will be most appropriate to implement Ventura County’s complex fare structure not only for the VCTC Intercity service, but will be best positioned to implement a multi-operator open payment system countywide.
Furthermore, Enghouse is waving numerous integration costs and one-time fees in their proposal and has a low-cost transaction processing fee at 1.4% of revenue collected versus 2.25% that would be collected by LittlePay, who submitted a competing proposal.
For the final element of the contactless payment system, VCTC staff recommended awarding the payment processor services (Category C) to Elavon. At the time VCTC requested proposals for Categories A and B, Elavon was the only vendor available with a DGS MSA to provide payment processing. While there is now an additional payment processing company, staff determined that the competitor’s timeline to integrate with the transit processor was not desirable. Elavon’s cost to process a transaction between the patron’s bank and a transit agency’s bank is $0.03 per transaction, but Elavon will also pass through variable costs known as interchange and card network fees. The fixed amount of $0.03 is established in Elavon’s MSA and will not change for the life of the five- year contract. The variable fees are entirely dependent on two factors: the type of card being used and the transaction value. The average transaction cost for other similarly sized transit agencies as VCTC that have procured vendors through DGS MSAs is $0.12.
Due to Elavon’s process of assigning merchant ID’s to new merchants within 90 days of revenue collection, Elavon’s contract cannot be executed until 90 days before launch of the new payment system and thus, the Elavon contract must be signed at a later date closer to the launch of the contactless payment system.
A contactless payment system for transit vehicles offers an opportunity for passengers to pay their fare using a debit or credit card, along with digital bank cards that can be stored in Apple and Google wallets. This not only adds another way to pay but also reduces the extra step that currently exists for passengers who want to pay with a credit/debit card or other contactless payment method. Currently, VCbuspass offers a way to pay using a card or app, but passengers first need to obtain a physical card or download the app and then load funds before boarding. This current process can present obstacles and add steps to using transit, which requires more planning and can make using transit less attractive, especially for new riders and/or those unfamiliar with fares and payment options. By contrast, contactless payments allow transit agencies to leverage global payment standards and accept physical and digital bank cards. This benefits riders as it facilitates little to no up-front planning when deciding to use transit and allows the use of payment options readily at hand.
In 2024, the Ventura County region was awarded Regional Early Action Planning (REAP) funds to collaboratively deploy contactless payment technology across the region’s transit Contactless Credit/Debit Card Agreement
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operators. Eight transit operators in the Ventura County region plan to implement contactless payment for transit services with support from VCTC.
DISCUSSION
Staff recommends the City participate in the statewide contactless payment effort with VCTC and enter into an agreement with Enghouse Inc. to provide the cloud-hosted transit processor software to calculate fares for each ride (Attachment 1).
Using funding provided by REAP, Camarillo Area Transit (CAT) will equip four fixed route vehicles with the open payment devices and retain one additional device as a spare. The equipment will enable the collection of both standard CAT fares ($1.00) and discount groups ($0.50), currently established as seniors and riders with disabilities. As part of the countywide effort to implement the contactless payment system, the transit agencies recommend having similar discounted fare categories. Staff recommends adding Veterans to the CAT $0.50 discount category for the fixed route and trolley service to match other transit agencies’ discounted fares The proposed transit fare resolutions add the Veteran category at the $0.50 discounted fare for fixed route (Attachment 2) and trolley service (Attachment 3).The proposed Veteran fare is recommended to become effective October 1, 2025, to provide time to update CAT transit brochures and interior bus signage.
Upon approval of the proposed Enghouse agreement and CAT fare resolutions, the countywide contactless credit/debit card transit payment process will be implemented as follows.
1. The payment devices will be supplied, installed and maintained by Kuba, Inc., through a five-year contract held solely by VCTC. VCTC has agreed to contract directly with Kuba Inc. on behalf of the region, thereby assuming responsibility for invoices related to capital expenses and ongoing monthly costs through the contract term. All agencies will be included in training and will have access to Kuba support throughout the term.
2. The cloud-hosted transit processor software used by the payment devices to calculate fares will be supplied and maintained by Enghouse, Inc. under a five- year contract. VCTC has agreed to assume responsibility for invoices related to any one-time costs related to implementation and eligibility verification. Enghouse will charge each agency a fixed fee of no more than 1.68% of fare revenue collected through the contactless payment system (to be deducted from collected fares prior to deposit to the City). Maintaining a direct contract with Enghouse will ensure each agency will have direct access to a personalized dashboard with only their own fare products to manage.
3. Upon approval by the City Council, the City Manager will negotiate and execute a five-year contract with Elavon to be the fare payment processor at a $0.03 fixed fee for each fare transaction, plus any fees levied by the passenger’s credit/debit Contactless Credit/Debit Card Agreement
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card and bank, all to be paid by the City. A direct contract with Elavon for each transit agency is necessary to ensure fare revenue goes directly to each agency.
The fees will be deducted from collected fares prior to deposit to the City.
Since it is difficult to predict the volume of fares that will be paid using the contactless system, the proposed agreements with Enghouse and Elavon do not include a not-to- exceed amount; instead, payments are based on a percentage of total revenue collected or a fixed fee for each transaction respectively. Staff estimates the total fees associated with credit/debit card transactions for Enghouse and Evalon will average approximately $700 per year. All transaction fees would be deducted from fare revenues deposited from the vendors. It is proposed that credit/debit card fees will not be passed on to transit passengers. The City’s separate RideCo dial-a-ride trip scheduling software program also has the capability to accept credit card payments. Staff intends to also activate the RideCo credit card payment option, effective September 1, 2025, and similarly, not pass on transaction fees to passengers as they are not considered a significant revenue loss.
Upon City Council approval and execution of the vendor agreements, it is expected to take three to four months to order, install, integrate, and test the equipment and software.
The goal is for the contactless payment system to be available to CAT customers in early 2026.
FISCAL IMPACT
Transaction fees estimated to be approximately $700 per year will be deducted from fare revenue to the City.
CEQA DETERMINATIONS
Staff has determined, in accordance with Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines that processing contactless credit and debit card transactions is not subject to CEQA review because it can be seen with certainty that there is no possibility that the Agreement may have a significant effect on the environment. The activity is to process contactless credit and debit card transactions.
Similarly, staff has determined, in accordance with Section 15061(b)(3) of the CEQA Guidelines that adding Veterans to the discount group for fixed route and trolley service is not subject to CEQA review because it can be seen with certainty that there is no possibility that reducing transit fare will have a significant effect on the environment. The fare reduction could encourage public transit use, a benefit to the environment.
RECOMMENDATION
1. Find the Agreements for processing contactless credit/debit card transactions is exempt from review under the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the CEQA Guidelines; and
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2. Find the addition of Veterans to the discount group for fixed route and trolley service exempt from review under CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines; and
3. Authorize the City Manager to execute Agreement No. CC-2025-168 with Enghouse Inc. to be the cloud hosted transit processor software used by the payment devices; and
4. Authorize the City Manager to negotiate and execute an Agreement with Elavon to be the payment processor no sooner than 90 days before launch of service; and
5. Adopt a Resolution modifying Camarillo Area Transit Fares, adding Veterans to the fare discount rate of $0.50 per trip for fixed route trips; and
6. Adopt a Resolution modifying Camarillo Area Transit Trolley Fares, adding Veterans to the fare discount rate of $0.50 per trip for trolley trips; and
7. Waive credit card user fees to all transit users for all transit-related services.
ATTACHMENTS
1. CC Agreement No. 2025-168
2. Fixed Route and Dial-A-Ride Fares Resolution
3. Trolley Fares Resolution
REFERENCE MATERIALS – AVAILABLE FOR REVIEW AT CITY HALL None