Fremont City Council Meeting: 11/19/24 07:00 PM
3300 Capitol Avenue Div/Dept: Finance Department
Fremont, CA 94538 Category: Agreements and Contracts
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5307) DOC ID: 5307
Updated: 11/15/2024 10:39 AM by Dina Lewis Page 1
CREDIT CARD PAYMENT PROCESSING AGREEMENT - Authorize the City Manager, or Designee, to Enter into a Service Agreement with Tyler Technologies, Inc. for Credit Card Payment Processing.
Contact Persons:
Name: David Persselin
Title: Finance Director
Div/Dept: Finance Department
Phone: 510-494-4631
E-Mail: [email protected]
Executive Summary: The City is in the process of a planned upgrade from Tyler Cashiering 2019 to Tyler Cashiering 2024 as part of our ongoing software maintenance and support contract. The upgrade will require the City to change credit card payment processors, and staff is recommending that the City enter into an agreement with Tyler Technologies, Inc. for its Tyler Payments solution.
BACKGROUND: The City’s Finance Department provides central cashiering services and collects payments for a variety of services by cash, check, and credit cards. City staff uses the Tyler Cashiering system to process those payments. Tyler’s financial management systems are based on an “evergreen” model in which frequent updates to the software are made as part of the user’s maintenance contract. The City’s 2019 version of Tyler Cashiering has now been superseded by Tyler Cashiering 2024, which staff is in the process of implementing.
Although Tyler Cashiering currently supports multiple payment processing platforms, Tyler will be limiting the number of providers with the implementation of Tyler Cashiering 2024.
Currently only two options are available for credit card processing, Tyler Payments and Open Edge.
DISCUSSION/ANALYSIS: Open Edge is a commercial credit card processor owned by Global Payments Integrated. Tyler Payments is a credit card processing solution designed specifically for the public sector.
Although staff estimates that Tyler Payments will probably cost the City more in payment processing fees than Open Edge, Tyler Payments will seamlessly integrate with the City’s Tyler Munis financial management system and eliminate the need for custom integrations from third-party providers. The higher cost of the Tyler Payments system will likely be offset over time by reduced support and upgrade costs. Staff accordingly recommends that the City enter into a three-year agreement with Tyler Technologies, Inc. for credit card payment processing services using its Tyler Payments product. After the initial three-year term, the agreement is renewable on an annual basis.
The recommended agreement includes a fee of 0.50% per transaction plus $0.50 in addition to the standard credit card interchange rates and processing fees from the merchant bank.
Council Staff Report (ID # 5307) Meeting of November 19, 2024 Updated: 11/15/2024 10:39 AM by Dina Lewis Page 2
The contract also includes the one-time purchase of eight credit card terminals for $3,352 with recurring annual services fees for the terminals of $1,440.
FISCAL IMPACT: Since credit card payment processing fees are paid from revenues collected and depend on the volume of transactions and customer card types, there is no not-to-exceed amount for the fee. The FY 2024/25 adopted operating budget includes appropriations for credit card fees estimated to be sufficient to accommodate the Tyler Payments agreement as well as the hardware purchases.
ENVIRONMENTAL REVIEW: Action on this item represents a fiscal, organizational, and/or administrative governmental activity that will not result in physical changes in the environment. Therefore, it is not a project subject to review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378.
ATTACHMENTS: None.
RECOMMENDATION: Authorize the City Manager, or designee, to enter into an initial three-year agreement, with subsequent annual renewals, with Tyler Technologies, Inc. for services related to credit card processing through the Tyler Payments software solution.