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-m'r"~ Cit)' of Palo Alto ~ ".11 ~ ______ C_iry-=-'_~_llll1_a_ger~s Report
TO: HONORABLE CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT: FINANCE
AGENDA DATE: DECEMBER 19, 1994 CMR:535:94
SUBJECT: ADOPTION OF RESOLUTION AUTHORIZING THE lJSE OF
CREDIT CARDS AS A MEDmM OF PAYMEl'o' A;,"1) THE
L'I1POSITION OF A FEE FOR THE USE OF A CREDIT CARD
RE...Q!JJ'sr
The purpose of this rt'J:ort is tv rcqut,·"t Cuunci!\ ;ldilti1ion elf " Re',,~hrli,,"'rj \\[I:ch
authorizes the use of (,'redit c.l1'ds as ~1 mcdturn Ofj:18ymi."'il' for ":)~' Ito;. c'hlJ~':: I.'; I", d:i~'
the Cit)'. The Resolution will (ihn provid~ iOi" !he irnr('~i(i')Ti ('(i-t f.;.(' for th:-ll'.\; c~ udlt
cards as a foml Dfpaynlent. Atth,~ugh swffis T;;\.'omml:'m.hllg ar?r<:Y<il fl,r ~cr;cnl u;e {1f
credit cards, it plans to add oniy the Children';) Tl1e.dlre and Budding Inspections at tilt:"
time. A costJbeoefit anal) sis .... \'ill be conducted ofthr;; .)tht"f tacilili~" that accerl payrr,ents.
from the public. After completing the allal~·.;;i<;. st;jfT plaI1s In pll.15C in tht: addlti(t'rJ~1
facililies, as appropriate, based on net""d and m,'H! ..... ,
RECOMMENDA nON
Staffrecommemis that Council adopt a Resolution \;hich autl"lnrii.r?s:
I) The use of credit cards as a medium of payment for any fee. charge. Wx due the
City; and
2) The imposition of a fee for the use of credit cards as a form of p.1)'ment. not to
exceed the cost incurred by the City in providing for payment by credit card.
EXECUTIVE SUMMARY
lhe City has accepted credi~ -cards as a mediurllofpayment for fees and services at Lucie
Stem and Animal Shelter fOT ovCf len years. Credit cards offer <:onveniencc to cLL"lomer."
of City services, and they provide an effective tonn of collecting funds {()r the Ctty_
Under California taw, Section 6159, Council must fonually 3uthcriz~ the m,:; of n I;rcjil
card. as a medium of p:1ymCni ~ctor~ any fee", chargt, or ta.x due [0 the City can b~
CP.fR:5JS:94 Pagt I {If J
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accepted for payment by credit card, Council's authorization \I,.'ilI allm .. ' the City to
continue (ll accept credit card,. Staff will conduct a cosUbenelit anal)'sis and. based on
the results, staff plans to phase in the additional facilities. as appropriate, based on need
and usage.
The referenced law now aHows the City to begin lmposlng fees (includlng administrative)
for the use ofa credit card, pro\!jd~d the fees do not exceed the costs incurred by the City
in providing for payment by credit card. Staff docs not plan on imposing fees
immediately. Fi.rs4 an analysis of the actual costs of accepting (,.'redit card.'i, inducting a
comparison to other methods of p.ymen~ will be conducted. Stair plans to ",'Commend
a fee during the fiscal year 1995·96 budget process, as part of 'he Municipal Fee
Schedule. The fee charged by !nstitutions for rmc~'S5ing credit card paymc!1l'i ranges frurn
2.5 percent to 4.5 pen;:ent of the transaction. depending on whether i( i5 done
electmn!ca!ly Of manually.
POLICY J!1!P Lg':.;JOlONS
Staft"'!s recommendatiCJn will all 0,>,' r.h~ City to continue to ac:cept cr~dii c<luJ.s as 03 rOm1
of payment and provide sUifT \yjth ihe ability to expand [heir usc a<.; aprrclprio(e. in
addition, adoption of this Resolution \\'ill enable staff to include in the Municlpai Fee
Schedule an. adminh:.trntivl fee whi(.;h. by' California law, may n0W be passed through ttl
credit card users.
FISCAL IMPACT
With Ule implementation ()fGovemment Code Sectlon 61S9 that atlows citics to reCOVe-i
credit card process,ng fees, staff an.ticipates recommt""nding a fee with tht" Municipal Fee
Schedule to be proposed with !.he 1995-96 budg,:t. This wili allow staff to recover the
c-Osts involved in prcx;,e5sing credit card payments,
ENVIRONMENT AL_<\.SSESSMENT
The action hereby approved does not constitute a. project u.t'Jdcr the California
Environmental Quality Act, and, therefore, no environmental assef;smcnt is needed.
A'IT ACHllfENT,'J
Resolution
CMR:S3S:94
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PREPARED BY: Lalo Pen", Financial Analyst
DEPARTMENT l-IEAD APPROVAL:
CITY MANAGER APPROVAL:
CC:n'a
CMlt;S3S:94
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FESOLllTJ:ON NO.
RESOL'J'TION OF'. TIlE COlJNCIL-OF TrlE CITY OF PALO AI/TO
AUTHORIZING THE USE OF CREDIT CARDS AS A MEDItJM OF'
PA't"'M:EN? FOR ' •• :NY FEE, CHARC8 OR TA...X DUE TH8 CITY
AND Ati'THORIZING THE IMPOSITION OF A FEE FOR THE
USE OF A GEDIT CAYW IN PAYMENT OF ANY SUCH FEE,
WHEREJ;..S,
the use of creai t
not a5gescs<r..ent~:·
Ccuneil approves
CHARGE Ok TAX
ex) sr i ng La.,... penni t:s a chartered city to accept
caTds in payment of fees, charges, ar~d. t.axes (but
due the elty of Palo Alto, provided the City
oE this medium o[ payment; and
W"'rlERRAS, existing 1 a ... ' further pen~Lil:s a chartered citj~ to
ic:o;pose a !ee for the Uf'o:: of d CL~dit card, provided such fee does
not exceed the cc£ts incul."red by a chan.:.ered city in. providing for
~ytr,.enr-. by crEdit c<irdj
~;-:;o';', 7".?:,..,:-:-,'IRE, U~2 '::o',w':U af ~_h(' C'.i.ty of Palo Idtc dQes
F:FS(~I}.'";; r.S !:o.'i.;.,~, .... ·,:;:
~r.e '.:~e ~1:--~~~-\~'!\-j' ~~r~_'~_lf :;.\t~' ;,\:~~\~~.r;~:r}i":\::.~~;~··:)~'(;~ ~~~ ;~~;,~~~z~~
'i"y f.?~_, '::-";; '-'l..-t.,,:·:, i:':·.::~ujin~l, ;":'.11 n:}r~ J .i,~lit('d to, il f,=,e for'
a r:::,tTi'l c·:::',, 'c"'1':""C'" ."', ;:'~r·:;J ~y 0::: OlD int_,=~.::e'Sl civ::rgf:', or a fJ.r1E',
cJ,,' ttie "~::".y '--'~ !,<-,! .~,~r,:),
2..t;.;..-::r . .l(:~_; __ :: TL:,~ City ('()ullci 1 [urtlJcr app!'oves and
,)iJt.hDri'::-2:-:; ::r-,e Cj ~-y t"I",:'''-l:1q-er Qr fl-2r desionee to e.,;tabllsh a fec to
t:-e se::' [o:rth ir. the 'rcun(cipaJ (ee scl""le:juJe" and the utility rates
and C(,e.rgE-S fo:: tr:f~ us;, of .J, c::-''?jit cz.rd 1!1 pityrr~eIlt of any fee,
char':;e, or t.'D: d,Jl' U---,IO.' City cf Pdlo Alto. Such f,:,,€ shall not
exc0~d the C03~S, in(;1~dln9, but llot lirriitcd to, charges assessed
r),' any f:r • .aTlC.\di JIlo:t_:_t\J'Cion ct('t.inq.;:ls Co. credit c;;l.,rd lssuo::'r-, and
equip:r·ent C08~~, Lllcll:rnc! by tr.c Ciry of Pale-Alto in !.=lroviding for
payment .Dy cr-edi t. card.
SEC!'IQ;\'}. Th,~ Ciry Coufli.:il finds
approved doE's nut corlst itute a pt"cjec:
that the action hereby
under the California
Enviro!"J1"r€ntal Q .... ality Act.
Ih~ODUCED ~l) PJLSSED:
AYES:
NOES :
ABSTE}rTIO~l'S :
ATIEST; APPRC'VED:
\PPi\C.IVED ;:.05 TI) FOR"l:
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