Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Payment Processing Fees topic
No spam. Unsubscribe anytime.
Tumwater staff weigh passing credit-card fees to customers after Tyler payments rollout
Summary
City staff told the Budget & Finance Committee that implementing the Tyler Technologies payment platform would increase merchant fees slightly and invited discussion of passing those fees to users; no final decision was made and staff will prepare option breakdowns and messaging for council review.
City of Tumwater staff briefed the Budget & Finance Committee on Jan. 24, 2025 about the likely cost and equity implications of switching to the Tyler Technologies payment platform and the possibility of passing credit-card fees on to customers.
Troy (city finance staff) told the committee the city currently absorbs credit-card merchant fees and that those costs amount to about $250,000 per year for utilities alone. He said the Tyler system would increase that cost by roughly $10,000 to $12,000 annually compared with current processing, and that the vendor’s business model combines card fees with an additional fee to Tyler for its integrated cashiering services.
Staff said the city now caps card payments for building permits at $1,500 to avoid large merchant fees on high-value permits. On the development/permit side, staff said contractors have asked to be allowed to pay by card for convenience and reward points; staff suggested passing fees for those transactions would likely be accepted by customers who value the convenience.
For utility billing, staff and committee members discussed equity considerations: the current practice of the city absorbing fees effectively spreads the cost among all ratepayers, including customers who do not use credit cards. Staff said lower-income customers who pay by cash, check or direct bank withdrawal would not incur card fees if the city passed them to payers.
Committee members and staff explored alternatives and implementation details discussed at the meeting:
- Autopay and direct bank-account payments (often free or a flat $1 e-check) were identified as lower-cost options; staff noted some customers already enroll in autopay using bank account information. - The new Tyler platform offers multiple payment methods; some (e.g., e-check) carry lower fees (staff cited a $1 fee example) while credit-card transactions carry higher percentage fees (staff estimated 3–3.5 percent on typical cards). - Staff described the choice as partly operational (how payments are processed) and partly policy (whether council should be briefed and approve a pass-through policy). Karen (city attorney) said the decision would be administrative but rises to the level of council consideration.
Several council members recommended incentives to encourage lower-cost payment methods (for example, a small bill credit for switching to bank-account payments). Privacy and consumer-protection concerns were raised over bank-account debit as an alternative to credit cards; staff said such options already exist for many customers and are in use through autopay.
No formal change was approved at the committee meeting. Staff committed to producing a breakdown of payment methods, fee levels, and implementation options along with a communications strategy and to brief the full council for additional direction.
A staff representative noted the city could apply different rules by payment category (for example, passing fees for community-development/permit payments while retaining existing practice for residential utility payments), and committee members requested specific cost comparisons for each payment type before any final decision.
