In 2017, the City's utility billing system provider, Superion (now known as Central Square), announced it would no longer support the transaction manager solution for its customers. This means that the City must transition to another solution that could be integrated into the Central Square system. The Water Department determined that the Paymentus transaction manager best fulfills future growth needs to provide more state-of-the-art payment processing services for utility customers. Also, as a member of Central Square's third-party solution provider programm, Paymentus provides trusted, compliant, seamless integration with the current billing system.
Staff recommends execution of a contract with Paymentus to promote faster, more secure, and cost-effective payment processing. Paymentus provides an integrated solution, which allows for more customer engagement with a full-service mobile solution, online Quick Pay access, paperless billing, IVR-telephone access and in-person payment processing. In addition, the full-service mobile payment solution allows the City to gain the ability to utilize text-to-pay and offer outbound messaging via phone, text and email.
Paymentus will allow for real-time payment processing and will also streamline daily reconciliation by eliminating end of day batch settlements, promoting timely revenue postings to the General Ledger. Financial reporting will be simplified and will enable more efficient partnering with one vendor instead of the five currently used.
In addition, Paymentus provides a fully-hosted reliable platform that meets all Payment Card Industry (PCI) compliance standards to reduce, or eliminate the PCI security concerns. Paymentus will not charge any fees related to the initial setup and personalization of its standard service for any of the billing and payment solution interfaces.
For each payment transaction, Paymentus charges a transaction fee. The fees will be determined by two categories which include "qualifying" bank cards and "non-qualifying" specialty pre-paid cards. The annual cost is estimated to be $3,020,845.00.
This estimate is based on August 2018 transaction volumes with a projected 15% annual increase in credit card usage, based on the trend experienced over the last five years. Below is a comparison of costs for qualifying bank cards and checks fees.
|Current Cost Per Transaction|| -|
|Credit Card Cost per Transaction || $1.48|
|Check Cost per Transaction|| $1.02|
Estimated total cost per transaction
| || |
|Proposed Cost per Transaction|| -|
|Credit Card Cost Transaction|| $1.53|
|Check Cost per Transaction|| $0.40|
Estimated total cost per transaction
INTERLOCAL PURCHASE - State Law provides that a local government purchasing an item under an interlocal purchasing agreement satisfies state laws requiring that the local government seek competitive bids for purchase of the item. The North Richland Hills Contract (NRH Contract) that the City is using as an Interlocal Purchasing Agreement was competitively bid.
SUCCESSOR CONTRACTS: To facilitate planning and budgeting, staff would prefer to have annual Agreements that align with the Fiscal Year. However, the NRH Contract is out of alignment with the City's Fiscal Year. In order for this Agreement to align with the City's Fiscal Year, adoption of this Mayor and Council Communication (M&C) authorizes (i) a series of Purchase Agreements, each of which will align to a term of the NRH Contract to ensure legal authority exists for the contract, and (ii) an annual spend amount, future years of which would be subject to City Council appropriation. In the event that the NRH Contract is not renewed, staff would cease purchasing at the end of the last Purchase Agreement coinciding with the valid NRH Contract. If the City Council were to not appropriate funds for a future year, staff would stop making purchases when the last appropriation expires, regardless of whether the then-current Agreement has expired.
ADMINISTRATIVE AMENDMENT: an administrative change order or increase may be made by the City Manager in the amount up to $100,000.00 and does not require specific City Council approval as long as sufficient funds have been appropriated.
M/WBE: A MBE/SBE goal is not assigned when purchasing from an approved purchasing cooperative or public entity.
TERM: Upon City Council approval, this Agreement shall begin on December 1, 2018, and end on November 30, 2019.
RENEWAL OPTIONS: The purchase of the Paymentus Transaction Manager and payment services under this Agreement may be renewed in accordance with the NRH Contract which automatically renews for successive three (3) year periods unless writen election not to renew is provided six months prior to the end of such renewal date. This action does not require specific City Council approval provided that the City Council has appropriated sufficient funds to satisfy the City's obligations during the renewal term.