The Sioux Falls City Council unanimously approved July 15 an ordinance allowing the city to charge a convenience fee on electronic payments to recover card‑processing costs.
The ordinance, which the administration said takes effect Jan. 1, 2026, is permissive: the city may pass along a processor‑set percentage fee for card payments but will continue to offer free alternatives such as ACH, check or cash. Director Pritchett said the city now pays more than $800,000 annually in card processing costs and that shifting fees to users who choose card payments aligns with practices elsewhere and avoids placing those costs on taxpayers or other ratepayers.
Under the ordinance the city will charge a single convenience fee channel for government payments (online and other permitted channels) and present the fee prior to processing; customers must accept the fee during the transaction and the amount will be shown separately on receipts. Pritchett said the city plans a phased implementation across multiple software systems, with particular attention to utility accounts and recurring payments; the ordinance gives staff time to coordinate software updates and customer communications and permits deferral for individual departments if technical issues arise.
Council members discussed protections for customers who might have medical or other special circumstances and said staff will work through fine points during the implementation window. Councilor Barranco said the change is intended to prevent large card‑processing charges from being borne by taxpayers and called the ordinance “a permissive authority” that remains adjustable in practice.
The ordinance passed unanimously on a roll‑call vote. City staff said they will publish implementation timelines, send notices so customers may switch to free payment options, and aim for citywide consistency beginning Jan. 1, 2026 while permitting rolling implementation where necessary.