Oakland County to shift government-to-government payment model to 3.5% fee, end external revenue sharing
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Summary
The Finance Committee voted to move the county’s government-to-government (G2G) payment service from a tiered per-transaction fee to a flat 3.5% fee, and to stop sharing a portion of processing fees with external agencies; staff said the change is intended to eliminate a growing program deficit.
Oakland County’s Finance Committee voted to change the county’s government-to-government electronic payment contract, replacing a two‑decades‑old tiered per-transaction fee schedule with a flat 3.5% processing fee and ending the practice of sharing collected fees with external agencies.
The change affects county departments, 55 local municipalities (cities, villages and townships) and roughly 83 external agencies that use the county’s electronic payment service. Kim Marango, director of application and client services, said the program has been operating at a deficit because of rising transaction volume and vendor costs: “In 2023, the deficit was $450,000. In 2024, the deficit was $540,000,” she told the committee.
Why it matters: Under the existing arrangement, the county collected fees on small transactions using a tiered structure (for example, a $2.50 fee on payments under $50) and then split the net fees back to the municipality or external agency. Marango said in 2024 the county shared about $706,525 in fees and that roughly $525,000 of that amount went to agencies outside Oakland County.
County staff proposed the 3.5% model for two reasons: to align with industry practice (which is typically a percentage of the transaction amount) and to stop the county sub‑sidizing external agencies with county general fund dollars. Rod (IT leadership) told commissioners the current deficit and outside sharing cannot continue: “We should not be sending tax paying dollars in subsidization to CBTs outside of the county,” he said.
Questions and responses: Commissioners raised several concerns. Some said a 3.5% fee felt steep for residents making small online payments—especially property tax payments that can be large—while others asked that the county present clearer, customer‑facing language explaining the charge as a merchant processing fee and itemizing the portion that covers vendor processing versus county system upkeep.
Staff said departments and Oakland County municipalities will not have to purchase new readers; the county plans to absorb equipment costs for county departments and local municipalities but external agencies will be asked to buy updated credit card readers where needed. Staff also said the county will communicate the change to all participating parties and give external agencies the option to remain on county contract terms or pursue alternative vendors under state law.
Next steps: The committee approved the change and directed staff to provide clearer breakdowns and outreach materials for residents and participating agencies. Commissioners asked for a detailed distribution table of who currently receives what fees; staff agreed to provide the graphs and per‑agency breakdown used during the presentation. The committee vote passed and the change is scheduled to take effect in early 2026, after formal notice and outreach to participating agencies.
Votes at committee: Motion to amend G2G fee structure to a 3.5% flat fee and to cease revenue sharing moved by Commissioner Spitz, supported by Commissioner Taylor; outcome approved and forwarded to full Board of Commissioners.
