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Lorain staff say contractor credits are offsetting much of city’s convenience-fee expense; council discusses policy change
Summary
City staff told the finance subcommittee that contractual arrangements with JPMorgan Chase/Paymentus let the city use account credits to offset convenience fees, reducing the general-fund expense; council members discussed whether to pass fees to customers or keep absorbing them to reduce lobby traffic.
Lorain finance staff told the subcommittee their payment contract structure has reduced the amount the city pays directly for credit-card convenience fees and that officials are exploring whether to make fee practices more uniform across departments.Council members asked why convenience-fee expenses appear low in recent years; a finance representative explained the city budgets the full contractual maximum ($160,000) but uses account credits earned through the payment arrangement with JPMorgan Chase and Paymentus to offset the fees. “We’re able to see our accounts and gain credits that we can use then those credits, sort of like an interest, to pay for those convenience fees instead of paying for them out of pocket,” the finance representative said.
The representative said actual expenditures this year were about $14,500 compared with prior years of about $70,000 and explained the new method has saved roughly $55,000 on the water side alone. Staff said the decision to absorb convenience fees historically aimed to reduce lobby foot traffic, freeing billing office staff to process payments instead of handling large walk-in volumes.
Councilwoman Carter said she wants a uniform approach so customers are treated consistently across departments; the finance representative said changing who bears the fee would be a legal and administrative decision that would require input from counsel and more data from the contractor to present a recommendation to administration and council.
City service director said staff is conducting a deeper review of payment platforms across departments to assure consistent, customer-friendly processes and will coordinate with the treasurer, building and planning and the clerk’s office to develop a plan.
