10.A.
City Council Meeting - FINAL
- Meeting Date:
- 01/20/2015
- Co-Submitter:
- Candace Schroeder, Senior Procurement Specialist
- From:
- Andy Wagemaker, Revenue Director
Information
TITLE:
Consideration and Approval of Contract: Services Agreement; Utility Payment, Bill Presentment and Notification Services. (Approve Agreement for Payment Processing Services).
RECOMMENDED ACTION:
1) Accept the Proposal and approve the agreement with Paymentus Corporation, for the annual services of Utility Payment, Bill Presentment and Notification Services.
2) Authorize the City Manager to execute the necessary documents.
Policy Decision or Reason for Action:
The City currently utilizes Wells Fargo as the main City payment processor. In conjunction with the implementation of new utility bill and cashiering systems through the Innoprise implementation, staff looked at integrating a new payment processor. This review was mainly driven by additional services that payment processors can now provide. Whereas payment processors used to only process financial transactions, payment processors now provide additional services such as online account management, e-billing, outbound notifications, e-checks, phone payments, among other services. The new features are items that many comparable utilities provide and are features that many City customers expect.
Subsidiary Decisions Points: None.
Subsidiary Decisions Points: None.
Financial Impact:
The City is currently utilizing payment processing services via Wells Fargo. Staff expects costs to decrease on a transaction to transaction level, however overall costs are increasing due to a larger charge volume and the addition of new services. The cost for FY2015 is anticipated to be $152,000. Of this, $113,000 is budgeted and the remaining $39,000 will be funded through contingency. The future annual estimate for these services is $200,000 of which approximately 80% ($160,000) will be recaptured through a cost allocation to the Utility Enterprise fund.
Connection to Council Goal and/or Regional Plan:
Effective governance.
Has There Been Previous Council Decision on This:
No.
Options and Alternatives:
1) Accept the Proposal and approve the agreement with Paymentus Corporation, for the annual services of Utility Payment, Bill Presentment and Notification Services. The City will be able to process payments via new payment channels.
2) Do not accept the Proposal and approve the agreement with Paymentus Corporation, for the annual services of Utility Payment, Bill Presentment and Notification Services. The City will continue to process payments with the current payment channels.
2) Do not accept the Proposal and approve the agreement with Paymentus Corporation, for the annual services of Utility Payment, Bill Presentment and Notification Services. The City will continue to process payments with the current payment channels.
Background/History:
The table below provides a short synopsis of the services that the City is currently able to provide with Wells Fargo as the main City payment processor and the additional services that will be provided when the City moves to a new payment processor.
On November 16th, 2014 staff advertised a Request for Proposals solicitation for procuring the services of Utility Payment, Bill Presentment and Notification Services. A total of two (2) proposals were received on November 26th, 2014 and evaluated with the following criterion: Qualifications and experience, project personnel, presented approach, proposed price/fee structure. The proposal submitted by Paymentus was ranked the highest and determined to be the most advantageous for the City.
| Current Service | Proposed Service | Comments | |
| Online Bill Payments (Utility) | YES | YES | None. |
| Online Bill Payments (Other) | NO | YES | Service enhancement. |
| Mobile Application Payments (Utility) | NO | YES | Service enhancement. |
| Mobile Application Payments (Other) | NO | YES | Service enhancement. |
| Over the Counter Payment (Utility) | YES | YES | None. |
| Over the Counter Payment (Other) | YES | YES | None. |
| Phone Payments (Utility) | NO | YES | Service enhancement. |
| Phone Payments (Other) | NO | NO | The phone system must integrate with an Innoprise program. The City uses many other databases that are unable to integrate with Innoprise. |
| e-Check Payments | NO | YES | Service enhancement. |
| Online Bank Payments | NO | YES | Service enhancement. Currently, the City gets a paper bank check up to seven days after a customer utilizes the "Online Billpay" functionality at his or her bank of choice. This paper check is manually processed by City staff. The payment processor would be able to process these online bank payments far quicker than the current manual paper process. |
| Outbound Customer Notifications (Utility Only) | NO | YES | Service enhancement. The City would be able to send outbound emails, texts, and phone calls to delinquent utility customers. |
| Autopay/Bankdraft Functionality | YES | YES | Service enhancement. Although the City currently provides this service, a significant amount of staff time is required to maintain sensitive information for autopay/bankdraft accounts. The new payment processor would assume all maintenance activities, freeing up City staff to help customers. |
| Online Account Management | YES | YES | Service enhancement. The City currently provides a basic online account management tool for utility accounts. The new payment processor will be able to expand options for the customer, giving the customer better tools to manage an account. Examples of enhanced services include e-check functionality, autopay/bankdraft maintenance, actual bill reproductions, among others. |
| e-Billing (Actual Bill) | NO | YES | Service enhancement. The current e-billing option offered by the City is a text filled email with minimal account details. The new payment processor will be able to send an electronic reproduction of the actual bill that is sent via mail to customers. This enhances the customer service experience by utilizing the same bill image for all customers, regardless of delivery method. |
On November 16th, 2014 staff advertised a Request for Proposals solicitation for procuring the services of Utility Payment, Bill Presentment and Notification Services. A total of two (2) proposals were received on November 26th, 2014 and evaluated with the following criterion: Qualifications and experience, project personnel, presented approach, proposed price/fee structure. The proposal submitted by Paymentus was ranked the highest and determined to be the most advantageous for the City.
| Paymentus | Invoice Cloud | |
| Qualification & Experience | 1 | 2 |
| Project Personnel | 1 | 2 |
| Presented Approach | 1 | 2 |
| Proposed Price/Fee Structure | 1 | 2 |
| Total Ranking | 1 | 2 |
Key Considerations:
The City does not currently offer the varied payment channels, notification methods, and other enhancements that many organizations provide their customers. The services provided by this payment processor will allow the City to meet customer expectations.
Expanded Financial Considerations:
The City is currently utilizing payment processing services via Wells Fargo. Staff expects costs to decrease on a transaction to transaction level if the Paymentus contract is approved. However, the benefit of a new payment processor is in the additional services that the payment processor can provide. With Paymentus, the City will be able to open up a new payment channel (phone payments), new customer notification options (email, text, phone), and new payment options (e-check and credit/debit autopay). With these new options and the associated costs, staff expects costs to stabilize in future years.
If the City chose to remain with Wells Fargo for payment processing, costs will increase and new services would not be offered. The new billing system vendor, Innoprise, would charge an additional $0.20 per transaction and a flat rate of $29.95 per month for utilizing payment processing services from a vendor that is not a Harris Integrated Payment Partner. Those charges would not include any of the other additional services (phone payments, e-checks, etc.) that the City is looking to gain from a new payment processor. Paymentus is a Harris Integrated Payment Partner.
The current year cost is estimated to be $152,000 of which $113,000 is budgeted and contingency will fund the remaining $39,000. Future annual costs are anticipated to be $200,000 and staff anticipate this cost to remain stable. Approximately $160,000 of the estimated payment processing fees will be recaptured with cost allocation to Enterprise Funds in the future.
If the City chose to remain with Wells Fargo for payment processing, costs will increase and new services would not be offered. The new billing system vendor, Innoprise, would charge an additional $0.20 per transaction and a flat rate of $29.95 per month for utilizing payment processing services from a vendor that is not a Harris Integrated Payment Partner. Those charges would not include any of the other additional services (phone payments, e-checks, etc.) that the City is looking to gain from a new payment processor. Paymentus is a Harris Integrated Payment Partner.
The current year cost is estimated to be $152,000 of which $113,000 is budgeted and contingency will fund the remaining $39,000. Future annual costs are anticipated to be $200,000 and staff anticipate this cost to remain stable. Approximately $160,000 of the estimated payment processing fees will be recaptured with cost allocation to Enterprise Funds in the future.
Community Benefits and Considerations:
The community realizes benefits through the enhanced service provision as detailed above.
Community Involvement:
Inform
Expanded Options and Alternatives:
1) Accept the Proposal and approve the agreement with Paymentus Corporation, for the annual services of Utility Payment, Bill Presentment and Notification Services. The City will be able to process payments via new payment channels.
2) Do not accept the Proposal and approve the agreement with Paymentus Corporation, for the annual services of Utility Payment, Bill Presentment and Notification Services. The City will continue to process payments with the current payment channels.
2) Do not accept the Proposal and approve the agreement with Paymentus Corporation, for the annual services of Utility Payment, Bill Presentment and Notification Services. The City will continue to process payments with the current payment channels.