TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Steve Charelian, Finance Director
Emy-Rose Hanna, Revenue Services Supervisor
SUBJECT:Title
Consideration of a Resolution Approving a Five-Year Agreement with Global Payments Direct, Inc. for Credit Card Processing Services for an Estimated Annual Amount of $195,000 (Finance Director Charelian).
A) WAIVE FORMAL BIDDING DUE TO SINGLE-SOURCE PURCHASING
B) ADOPT RESOLUTION NO. 24-0028
Line
_________________________________________________________
Recommended Action
RECOMMENDATION:
Staff recommends that the City Council take the following actions:
a) Waive formal bidding per Municipal Code Section 2.36.140.
b) Approve a five-year agreement for credit card processing services with Global Payments Direct, Inc. for an estimated annual amount of $195,000.
d) Body
FISCAL IMPLICATIONS:
Sufficient funds of $195,000 are currently available within the General Fund Finance Department budget for credit card processing services with Global Payments Direct, Inc. Future years will be budgeted accordingly.
BACKGROUND:
On July 17, 2018, City Council approved a contract with Tyler Technologies for the implementation of new financial and permitting systems (Tyler Munis Enterprise Resource Planning (ERP) and Tyler Energov Permitting Solution).
Since implementation, this technology has provided a reliable cashiering system for daily transactions at the finance counter in City Hall and has provided a secure payment portal through Energov for planning and building permits.
As an industry leader in financial systems, Tyler Technologies continuously provides enhancements and upgrades to their products and offers newer versions of their systems each year. The City’s financial system (Munis Enterprise Resource Planning (ERP)) is currently in version 2019 and needs to be upgraded to version 2021. Additionally, the City’s permitting system (Tyler Energov Permitting Solution) is currently on version 2022 and needs to be upgraded to version 2023.
As the City began planning the upgrade for these two systems to the newer versions, it was determined that Tyler Technologies would no longer support and integrate with the City’s external credit card processor offered by Elavon through US Bank. Instead, Tyler Technologies is requiring the use of Global Payments Direct, Inc. for all clients who seek to upgrade to future versions of their system. Therefore, the City would need to engage in a contract with Global Payments Direct, Inc. before any upgrades can be made to the City’s financial and permitting systems.
It should be noted that Tyler Technologies implemented this change for compatibility reasons and to help streamline payment processing and enhance payment integration.
DISCUSSION:
Founded in 1996, Global Payments Direct, Inc. has been a leading payments technology company delivering innovative credit card merchant services to customers globally. Currently, Global Payments Direct, Inc. services over 4.6 million merchant accounts, over 1,500 financial institutions and over 100 industry types, including governmental entities.
Their technologies, services, and expertise provide a broad range of solutions that enable their customers to operate more efficiently worldwide. Headquartered in Georgia with approximately 27,000 team members worldwide, Global Payments is a Fortune 500 company and a member of the S&P 500, with a worldwide reach spanning over 170 countries throughout North America, Europe, Asia Pacific, and Latin America.
Staff believes it would be advantageous to work with Global Payments Direct, Inc. as they are the only credit card merchant company compatible with Tyler Technologies’ future financial and permitting systems.
Additionally, staff negotiated with Global Payments Direct, Inc. to secure favorable pricing based on a rate of 0.4% per transaction (plus interchange fees), and an authorization fee of $0.12. By comparison, the City’s existing credit card vendor charges a rate of 1.91%-4.61% per transaction (interchange fees built-in) and an authorization fee of $0.19.
Based on preliminary estimates, the City is anticipating an annual savings of $25,000 for the City’s main merchant account used at the Finance counter and an additional annual savings of $25,000 for the City’s Energov merchant account used for planning and building permit payments. However, these annual savings may be offset by the introduction of new payment options that would become available and allow customers to pay online for business licensing, animal licensing, and general billing. These new payment options would become available through Tyler Technologies following an integration with Global Payments Direct, Inc.
It is important to note that if the City were to not engage in a contract with Global Payments Direct, Inc. and decided to continue using the existing credit card processing vendor, Elavon (US Bank), it would create a situation where the City would be unable to introduce future upgrades and enhancements to the City’s financial and permitting systems with Tyler Technologies. In this scenario, the City would continue to use older versions of the financial and permitting systems, which would eventually no longer be supported and maintained by Tyler Technologies.
Additionally, the integration of Global Payments Direct, Inc. would result in the following benefits:
• Improved customer service by offering more options to pay online for business licensing, animal licensing, and general billing.
• Enhanced staff efficiency as online payment options would give customers more autonomy to pay online rather than requiring other forms of payment to be processed in person at the finance counter or a mail-in check to be processed manually by staff.
WAIVE FORMAL BIDDING:
Whenever practical and in the City's best interest, the City may waive formal bidding. This is permissible under the City's Municipal Code, Section 2.36.140. Global Payments Direct, Inc. is considered a single-source vendor as it provides unique and specialized services that other vendors could not fulfill due to compatibility reasons with Tyler Technologies. As such, staff recommends that the City Council approve the five-year agreement with Global Payments Direct, Inc. for credit card processing services for an estimated annual amount of $195,000.
PUBLIC OUTREACH:
After a thorough analysis, staff determined that public outreach was not required for the approval of this contract.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that there is no possibility that the activity may have a significant effect on the environment; therefore, pursuant to Section 15061(b)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.
ATTACHMENTS:
1. Resolution No. 24-0028
2. Agreement - Global Payments Direct, Inc.