Council approves Paymentus contract and asks staff to review payment fee policy

The council approved an annual authorization with Paymentus Group, Inc. for payment-processing services at its May 6 meeting, while asking staff to analyze the city’s payment-fee structure and alternatives to reduce the fiscal impact on the municipal budget.

Erin Bader, Director of Exceptional Services, told the council that Paymentus has provided processing services since 2014 and that the council previously directed staff to absorb convenience fees charged to customers. She said online and card-payment adoption has increased markedly and that the city’s cost to absorb those convenience fees is now significant: staff described the annual Paymentus-related cost at roughly $500,000. Bader said the city uses multiple processors for different payment streams (utility billing, animal control, recreation and municipal court) and that a more complete analysis would require additional work.

Councilmembers discussed options. Some asked staff to explore behavior-based approaches to reduce fees, such as promoting ACH/auto-draft (which staff said carries a nominal fee — cited in the meeting as roughly $0.30 per transaction) or passing fees to customers. Councilmember Felter and others encouraged examining what peer cities do and assessing the overall financial trade-offs. Councilmember Gilmore urged staff to include comparisons with sister municipalities. Staff told the council they have begun benchmarking and will return during the budget process with recommendations.

Despite concerns about costs, several council members emphasized the customer-service benefit of fee absorption, noting that for some residents a credit card or online payment provides an accessible way to meet obligations. The council approved the Paymentus authorization on a unanimous roll-call vote (6-0) and directed staff to prepare a broader analysis for the budget cycle.