Budget committee delays vote on $37 million CityBase contract extension after concerns over convenience fees

Chair Sandra Lee Feuer on June 3 moved to continue consideration of a proposed amendment to the City and County of San Francisco’s contract with CityBase after supervisors raised questions about who pays credit-card convenience fees and whether the city had obtained the lowest possible rates.

Taejung Shaw of the Treasurer and Tax Collector’s Office told the committee the CityBase enterprise platform is used across multiple departments — for taxes, fees, public-health clinic payments and parking — and supports credit/debit card and eCheck transactions. "To date, we have collected about $4,000,000,000 in taxes, fees, and services," Shaw said, adding that the amount the city paid to CityBase is “less than 0.2% of that $4,000,000,000.” She described the platform’s policy of offering eCheck as a free option for payers and said roughly $13,000,000 of the proposed $37,000,000 contract increase would come from constituent-paid convenience fees while other costs are absorbed by departments.

Feuer and other supervisors pressed Shaw on rates and the equity effects of add-on convenience fees. Feuer said she was "reluctant to vote on this today" and described concerns that convenience fees can disproportionately affect vulnerable residents who carry high-interest credit-card balances. Supervisor Mandelmann asked staff to provide comparative transaction-rate data for neighboring jurisdictions, and Feuer recommended exploring voluntary community-benefits language to include in large enterprise contracts.

Shaw said the city negotiated competitive average rates — citing roughly 2.5% for business taxes and 2.25% for property tax transactions — and noted several jurisdictions (including Denver, Austin and Santa Clara) are piggybacking on the contract. She agreed to check timing constraints related to contract caps and told the committee she would return with comparative rate information.

The committee voted to continue the item for one week to allow staff to supply the requested comparative rates and related details so the full Board could consider the contract before the city reaches the contract cap. The continuation passed on a roll call of supervisors Walton, Mandelmann and Chair Feuer.

What’s next: The Treasurer’s Office will provide requested comparative rate information and timing details on contract caps; the item is scheduled to return to the Budget and Finance Committee before being transmitted to the full Board.