RPU proposes $3 card convenience fee and escalated water-availability fee for 2026 budget

Tim McCullough, general manager for Rochester Public Utilities, briefed the council on two fee proposals RPU intends to include in its 2026 budget package: a flat convenience fee for card-based payments and an updated water-availability fee intended to fund future above‑ground water storage.

Nut graf: McCullough said rising credit-card processing costs and construction inflation have created pressure on utility finances. He told the council that card processing fees are “in excess of $650,000 a year” and that a proposed $3 convenience fee would align those costs to the customers electing card payments; RPU also proposed escalating the per-acre water-availability fee to match a recent general rate increase.

Credit-card payments: McCullough said the share of payments made by card has grown and now represents about 25% of payment revenue while accounting for a disproportionate share of processing costs. “We are entering a phase where the credit card processing fees, are in excess of $650,000 a year,” he said, noting that card processing can be roughly “6 and a half times” more expensive than ACH/bank draft or cash/check for the same revenue.

To move toward a cost‑based approach, RPU recommended a convenience fee of $3 per card transaction rather than a percentage‑based surcharge. McCullough explained legal and practical constraints: state and federal rules limit how surcharges may be applied (for example, surcharges are governed by state statute and cannot be applied to debit-card transactions under federal rules), and the flat convenience-fee model is common in the utility…