|
ITEM 14 |
City Council Memorandum Management Services Memo No. MS 24-001
|
Date: |
July 20, 2023 |
To: |
Mayor and Council |
Thru: |
Joshua H. Wright, City Manager Dawn Lang, Deputy City Manager - CFO Kristi Smith, Financial Services Assistant Director |
From: |
Danielle Wells, Revenue and Tax Senior Manager |
Subject: |
Agreement No. MS2-920-4380, with Invoice Cloud, Inc., Electronic Payment Acceptance Solution |
|
|
|
Proposed Motion: |
Move City Council approve Agreement No. MS2-920-4380, with Invoice Cloud, Inc., for the electronic payment acceptance solution, in an amount not to exceed $490,000 per year, for a period of five years, with the option to extend for up to five one-year periods. |
Background/Discussion: |
As a Community of Innovation, there is a desire to ensure a wide variety of electronic payment options for the City's customers. The City offers a broad range of services to its residents, businesses and visitors. The City accepts payments in a decentralized manner at numerous facilities, which has expanded over time (currently at about 668,000 transactions annually). The City's existing vendor, Invoice Cloud, Inc., has served as the electronic payment web portal solution since 2013 and, after conducting a Request for Proposal (RFP) process, staff recommends continuing with this company. The solution allows customers to make one time and recurring payments using debit cards, credit cards, direct bank debits, Apple Pay, GooglePay, Venmo, PayPal, and PayPal Crypto currency wallet (Bitcoin, Ethereum and Litecoin). Invoice Cloud allows for mobile payment options like pay by text, the ability to combine payments from multiple areas of the City and pay them in a shopping cart experience, and integration with various other software systems. Additionally, Invoice Cloud is a third party hosted solution that is compliant in Payment Card Industry (PCI) and Data Security Standards (DSS), ensuring no personal credit card or banking data is stored on City servers and eliminating the need to invest in and maintain additional infrastructure. Because the Invoice Cloud third party solution is already in place, it is fully integrated with the City’s Oracle financial system to post payments to its appropriate revenue accounts, including an administrative platform for reconciliation and simplification of refund and dispute resolution. This solution allows customers to make a payment at any point in time and have support for customers available 24/7/365. Invoice Cloud's current fees include a fixed monthly fee allowing for unlimited users and paperless billing and transaction fees, which vary under two models: City absorbs fee or customer pays (service charge). Invoice Cloud is currently used for utility bills, business registration fees, specialty license fees, airport fees, building permit fees, fire permit fees, and miscellaneous accounts receivable payments, among other applications. |
Evaluation: |
On December 21, 2021, City staff issued Request for Proposal No. MS2-920-4380, for the electronic payment acceptance solution. Notification was sent to all registered vendors. Four proposals were received from the following offerors: Government Brands, LLC Invoice Cloud, Inc. JPMorgan Chase Bank, N.A. Paymentus Corporation The Evaluation Committee evaluated the proposals and recommends award to Invoice Cloud, Inc., which submitted the most advantageous offer to the City in accordance with the evaluation criteria. |
Financial Implications: |
Under the current and future transaction fee model, the City has the ability to pass on costs by charging a service fee for certain transactions (2.95% of transaction total with a $1.00 minimum, or $0.95 for electronic bank account debit) or absorb the fees for certain services. Service fees are charged to customers paying Development Services permits (including impact fees) and Airport deposits, leases and permits. Invoice Cloud's fees are absorbed by each utility (Water, Wastewater, Reclaimed Water and Solid Waste), Tax & License, Fire, Police, and Accounting insurance and donation transactions. Transaction fees absorbed by the City are netted against revenues and under this contract, credit card and EFT/ACH transaction fees will stay the same as the prior contract, while Interactive Voice Response (IVR) services for either payment option will increase by $0.10 per transaction. These price changes were deemed by staff to be reasonable, as it will add approximately $700 per month to the current monthly average of $32,500, representing a 2.2% increase from current costs. The monthly Invoice Cloud administration fee remains at $2,500, allowing for unlimited users and paperless billing and the monthly transaction fees incurred by the City across all funds. Customers paying their utility bills represent about 98% of the total fees. The first two years of the contract are set, and Invoice Cloud can raise the rates by no more than 3% in the third through fifth years of the contract. The City also retains the right to extend the contract for up to five additional one-year renewals after the initial five-year term. The final value of the contract will vary depending on the amount of usage by customers paying their bills through Invoice Cloud, as the contract cost is partially based on a per-transaction fee. |
|
Fiscal Impact |
|
|
|