Santa Fe committee approves $120,000 budget amendment to cover Wells Fargo credit-card fees

The Santa Fe Public Works and Utilities Committee voted to approve a budget amendment adding $120,000 to cover excess credit-card processing fees charged to the city by Wells Fargo.

The change, listed on the agenda as item 7x, passed on a roll-call vote with all members present voting yes. The amendment was described in committee as necessary because credit-card usage this fiscal year has exceeded the amount originally budgeted.

“To date this fiscal year, the credit card usage has exceeded what was originally budgeted, which means more credit cards are being used throughout the city, generating additional fees that the city covers,” said Matt Bonhoeffer, accounting officer for the city of Santa Fe. Bonhoeffer said the requested funds are intended “to cover the excess credit card fees projected to finish out the fiscal year.”

Committee members pressed staff for details about who uses the city’s merchant accounts and what the city pays per transaction. Bonhoeffer said the cards in question are constituent-facing payment methods — used for parking, business permits, lodgers tax and utility payments — and that fees are assessed to the city for each swipe. He estimated an average fee of about 3.5 percent but said fees vary by card type and transaction size.

Councilor Michael Garcia asked whether the city has considered shifting the fee to customers. “Have we thought about instituting a process where the consumer pays the fee?” Garcia asked, noting private utilities sometimes charge a convenience fee for credit-card payments. Bonhoeffer said finance staff have begun exploring a convenience-fee model for some transactions but that parking transactions and merchant-service contract requirements make the issue more complex.

Councilor Lee Garcia and others noted technical and contractual complications, including differences among card networks (debit, Visa, Discover, American Express) and integration with the city’s payment software. A committee member said Wells Fargo is the city’s merchant of record and that the larger banking relationship — which covers deposits, processing and other services — makes a vendor change difficult and that several years likely remain on the contract.

The roll call recorded “yes” votes from Councilors Castro, Michael Garcia, Romero Worth, Lee Garcia and Chair Chavez. No dissenting votes were recorded.

Committee members asked staff to provide additional detail on historical fee totals and the length of the Wells Fargo contract. Bonhoeffer and other staff said they would supply a breakdown of prior years’ credit-card fees and clarify the remaining contract term.

The committee approved the budget amendment and moved on to other business.