Council: Let customers pay fees for credit card payments
By Jon Hawley
Tuesday, September 11, 2018
Elizabeth City's utility customers will continue to be charged fees if they pay their monthly bills with credit or debit cards, City Council agreed last week.
The city's payment vendor, Official Payments, will continue charging customers $6 if they pay bills with credit cards, $4 if they pay with debit cards and $2 if they pay with electronic checks.
City Manager Rich Olson and Finance Officer Suzanne Tungate reported in July that Official Payments recently raised those fees, prompting the city to shop for other vendors with lower processing costs. Olson and Tungate recommended the city switch to Wells Fargo, which would have only charged $1 for e-checks and $3 for debit and credit cards. However, the city, not customers, would have to make those payments.
Fourth Ward Councilor Johnnie Walton urged fellow councilors to get more price quotes, expressing concerns about the city absorbing potentially $54,000 a year in processing fees. Customers with credit cards should be able to afford those fees, Walton said. He also encouraged the city to get quotes from local banks.
On Thursday, Olson and Tungate reported that only one bank provided them a quote: First Citizens Bank. They also reported First Citizens proposed charging fees based on a percentage of each transaction. Percentage-based charges can be larger than flat fees, which is why the city has sought to avoid vendors who request them, they said.
That prompted Olson and Tungate to stand by their original recommendation of Wells Fargo.
Olson acknowledged $54,000 would be a significant amount for the city to pay. He also said many city customers don't have credit or debit cards.
Walton argued in earlier meetings the city paying the fees wouldn't help its poorest residents, particularly those who struggle to avoid cutoffs due to late payments.
However, Olson reiterated that, by absorbing the fees, the city would encourage customers to pay online or over the phone, freeing up an estimated $15,225 in staff time for customer service representatives. He said he hoped to double that amount in three years.
Olson also said the city would not seek layoffs if it switched to Wells Fargo; the extra staff time would go to helping customers with problems.
On Thursday, other councilors came out against the city absorbing the fees.
Fourth Ward Councilor Darius Horton said paying with a credit card is an option, not a requirement, so the city shouldn’t have to pay the fees associated with it.
Third Ward Councilor Rickey King, the council’s mayor pro tem, and First Ward Councilor Billy Caudle also questioned why the city is encouraging credit card payments at all. King said his utility bill is drafted from his bank account; the city needs to encourage customers without checking accounts to open one and set up bill drafting too, he said.
Olson noted bank drafts happen automatically on a set date — giving customers little flexibility if they need to delay a payment. Some lower-income customers rely on credit cards just to “float,” or buy time, before paying a bill, he said.
Nevertheless, councilors agreed to let customers continue to pay the fees. Because staying with Official Payments required no action, councilors didn't hold a formal vote.
Tungate also said that, once the city switches to a new billing software through Tyler Technologies, customers can pay bills through the company’s online portal. However, that will add another $1.25 to processing fees, she said.