Issue Statement: The City's online utility payments are processed primarily by Value Payment Systems (VPS).  In response to the COVID-19 pandemic, the City made efforts to promote the use of online payment methods to customers.  As a result in June 2020, Oakland Park shifted from customers paying the processing fee to having this fee absorbed by the City.  Based on the increase in online payments, the City Commission authorized expenditures in excess of $25,000 to VPS during FY 2021. 

Continued funding for these fees was included and approved as part of the FY 2022 budget.  Due to changes with the City's enterprise resource planning (ERP) systems (Tyler Munis and Tyler Energov), some transaction channels are now being processed through Automated Merchant Services (AMS), another payment processer utilized by Oakland Park.  Additional changes to transaction channels may be needed in the future to accommodate future changes to the ERP environment.

To ensure payment processing remains uninterrupted for customers, authority is sought from the City Commission to allow expenditures to VPS and AMS for payment processing fees under the terms of the existing City contracts in excess of $25,000 and up to the budgeted availability.

Recommended Action: The City Commission adopt a resolution authorizing expenditure authority in excess of the $25,000 and up to the budgeted availability for online processing fee payments to processors Value Payment Systems and Automated Merchant Systems utilizing the existing City contracts.

Background: The City of Oakland Park's Utility Billing division provides a variety of online payment options to City customers through a utility customer service portal.  The customer service portal's payments are processed primarily by Value Payment System (VPS), one of the few processors supported by the City's Tyler Munis financial platform.  There are processing costs associated with credit card and debit card payment options.  These processing costs charged by VPS were paid directly by customers making payments online as a convenience fee added to applicable transactions.  In response to the COVID-19 pandemic, the City made efforts to promote the use of online payment methods to customers, as well as e-check payments.  These efforts included the operational decision to migrate from having the customers pay the transaction fee to the City paying this transaction fee.  The change was effective in June 2020. 

The City of Oakland Park entered into a service agreement with Value Payment System (VPS) in August 2014 as part of the City's migration to the Tyler Munis Utility Billing platform as part of the second phase of the enterprise resource planning (ERP) implementation.  VPS was one of only a limited number of processing companies compatible with the Tyler Munis ERP specifications at the time. A copy of the service agreement is attached as Exhibit A. 

In 2018, the City entered into an additional payment processing agreement with Automated Merchant Systems, Inc (AMS) as part of the implementation of Energov, another Tyler product used by the Building & Permitting Division and the Community and Economic Development Department. 

During 2021, upgrades to the Tyler Munis financial platform resulted in changes to which payment processors could be utilized for payment processing as part of the integration with Tyler Energov.  As such, the City began to utilize Automated Merchant Services (AMS) for certain transactions, including in-person credit/debit payments and online e-check payments.  

The City shifted the processing model in June 2020 and costs for the remainder of Fiscal Year 2020 remained below the $25,000 expenditure threshold. In December, the City received the first monthly invoice from VPS, which was for approximately $5,400.  In early 2021, the City Commission authorized expenditures in excess of $25,000 to VPS.  The anticipated cost at the time to City was projected to be $64,800.  Due to the higher than anticipated volume of transactions, the actual cost for FY 2021 was approximately $82,000.

It is expected that online payments will grow as a payment channel compared to more traditional payment methods (mailed check, money order, cash). There were 1,014 online utility payments (card only) made in October 2019.  In October 2020, there were a total of 1,342 online payments made (card & e-check), an increase of over 32% from the prior year.  In October 2021, there were 1,508 online payments of all types, a 12% increase over 2020 and a 49% increase over 2019.

Based on the current volume of transactions this fiscal year, it is anticipated that the annual cost of transaction fee payments by the City will exceed $84,000.  This reflects payments to both VPS and AMS.   Funding for these costs was included as part of the FY 2022 budget within the Utility Billing Services division of the Financial Services Department and will continue to be supported in future budgets. 

The intent of this agenda item is to formally authorize future expenditures up to the budgeted availability.   These costs were identified as part of the Business Plan within the Financial Stability and Sustainability Strategic Performance Area. The transaction fees will be paid through revenues derived from the City's Water & Sewer Enterprise Fund's revenues.

The City Commission adopt a resolution authorizing expenditure authority in excess of the $25,000 and up to the budgeted availability for online processing fee payments to processors Value Payment Systems and Automated Merchant Systems utilizing the existing City contracts.