City staff sought council authorization to execute a change order with Focus Merchant Services LLC that increases the existing credit‑card processing and merchant services contract by 25 percent, bringing the total not‑to‑exceed amount to $4,500,000 to cover rising usage through the fiscal year.

A staff presenter summarized the request: "This is just adding 25% to the already authorized amount to get us through the fiscal year," and said the original 10‑year contract totaled $3,600,000. Staff explained the increase reflects higher volumes of residents paying by card.

Council members asked several technical questions about how fees are calculated. Staff said interchange fees charged by card networks (Visa, Mastercard, American Express and Discover) are passed through by the card processor, which then charges its own processing fee on top. The staff presenter noted that the city currently recoups 2 percent of the card fee from customers for most payments but does not pass the full surcharge: "We pass on 2%. 2% is what it is right now." The presenter estimated the municipality still covers approximately 1.5 percentage points of the typical 3.5 percent total cost (the exact number varies by card type) and said council could consider adjusting the pass‑through rate during the budget process.

Council also clarified scope: the contract amendment covers all city payments except the municipal court, which remains under a separate arrangement. Staff advised that the $4.5 million total will be spent over roughly seven years given current usage patterns and that the city plans to issue a new request for proposals next year.

The credit‑card contract change order was listed on the consent agenda; council approved the full consent package later in the meeting by motion, which included items 11 through 24 (the consent motion was made by Council Member Klein, seconded by Council Member Palacios and passed unanimously with Council Member Christopher Axberg absent). The transcript contains no separate roll‑call vote on the card contract.

Why it matters: rising card use increases processing costs for non‑cash payments; choices about pass‑through rates affect municipal revenue and resident costs. The item raises trade‑offs between convenience, city budget exposure and customer charges.

What's next: staff said they will take card processing back to procurement in the next fiscal cycle and recommended council consider fee‑pass‑through policy as part of the budget process.