Administrative
Report
H.9., File # 23-7205 Meeting Date: 11/21/2023
To: MAYOR AND CITY COUNCIL
From: EUGENE SOLOMON, CITY TREASURER
TITLE
APPROVE AN ADDENDUM TO THE CARD SERVICES AGREEMENT WITH GLOBAL PAYMENTS DIRECT, INC. FOR CREDIT CARD PROCESSING FEES TO BE PAID BY THE CARDHOLDER IN THE AMOUNT OF 3% PER TRANSACTION, AND AUTHORIZE THE MAYOR TO EXECUTE ON
BEHALF OF THE CITY
EXECUTIVE SUMMARY
Visa allows qualified agencies to register for the Visa Government and Education Payments Program (Program). The Program enables these agencies to charge cardholders a service fee for making a payment by credit card. If the City of Redondo Beach successfully registers under the Program, Global Payments will charge cardholders both the amount of their payment and a separate service fee. The service fee will be 3% of the primary transaction amount, but this is subject to change upon 15 days' notice. Global Payments will charge cardholders the service fee only while the City of Redondo Beach is registered under the Program.
BACKGROUND
Staff has been looking to reduce the transaction/processing costs associated with credit card purchases. With the approval of this addendum, Global Payments will have the ability to charge a 3% transaction fee directly to the cardholder and will allow the City to retain the full amount of the primary transaction. Upon execution of the Agreement, City staff will post notice(s) at the payment counter to make cardholders aware of the additional service fee.
COORDINATION
This recommendation was coordinated with the City Treasurer's Office, the Financial Services Department, and the Information Technology Department. The addendum to the Agreement was approved as to form by the City Attorney' s Office.
FISCAL IMPACT
The cost savings to the City will be approximately $50,000 annually, as the City' s credit card transaction costs will be reduced to $0. The addendum with Global Payments will allow the charges to be transferred to the credit card user in the form of a 3% service fee. The Financial Services Department budgeted $50,000 for transaction fees in Fiscal Year 2023-24.
APPROVED BY:
H.9., File # 23-7205 Meeting Date: 11/21/2023
Mike Witzansky, City Manager
ATTACHMENTS
· Agmt - Card Services Agreement - Service Fee Addendum · Agmt - Global Payments Direct, Inc., January 3, 2017
· Merchant Application - Global Payments