CC MEETING: MAY 21, 2013
DATE: May 2, 2013
TO: Leonard Martin, City Manager
FROM: Priscilla Robinson, City Treasurer
Title
Consider A Resolution Authorizing The City Manager To Approve A Contract To Renew Services For Merchant Credit Card Processing Services With Fifth Third Bank In An Amount Not To Exceed $250,000 Annually.
Body
BACKGROUND:
The Treasury Division sent out Request for Proposals (RFP) for Merchant Credit Card Services to various providers for response by October 25, 2012. The City received seven responses from: BB&T, Fifth Third Bank, Bank of America, Amegy Bank, First Data, Merit Card, and Lexis/Nexis. The RFP's were analyzed by staff and a final decision was made to award the contract to Fifth Third Bank.
The contract is being awarded based on proven excellent customer service, knowledge about the industry, best cost, fraud control, and strong financial background.
The City Attorney's office opinion in the past contract, and still remains, is that management should consider and the following issue before entering into this contract:
"Credit Card companies are given unilateral right to change the term of the contracts". It is completely out of Fifth Third Bank's control and jurisdiction how credit card corporations structure their interchange fees and consequently change those fees and pass them through to the vendors. It will take changes to credit card by-laws to change this part of the contract. Currently all municipalities accepting credit cards have the similar clauses in their contracts. In order to remove this clause from the contract national changes in credit card by-laws must happen.
FINANCIAL IMPLICATIONS:
Using prior year actual credit card processing expenses and keeping a similar fee structure with convenience fees collected by Municipal Court, Utility Customer Service, Building Inspection and miscellaneous revenues, staff estimates that current credit cards fees will approximate $150,000 annually.
...
Click here for full text