HomeMy WebLinkAboutVIII-12 1st Reading - Fee Schedule - Credit Card Fees
City Council Memorandum
To: Mayor Fasbender & City Councilmembers
From: City Administrator Dan Wietecha
Date: February 5, 2024
Item: Credit Card Fees
Council Action Requested:
Consider first reading of ordinance for technical correction regarding credit card convenience fees.
Background Information:
In December 2023, the City Council adopted an updated Fee Schedule Ordinance, including a new Credit
Card Convenience Fee of 3.7%. With the volume of credit card transactions, the City had been paying
approximately $115K annually under its merchant service agreements and wished to have these costs
covered by the customers electing to use credit cards. The 3.7% figure was based on the average service
fees the City incurs for accepting credit card payments.
The Active-Net billing software used by the Parks Department (recreation programs, Aquatics Center,
and Civic Arena) currently charges a processing fee of 3.12%. This cannot be changed by the City. It can
either be paid by the City or passed on to the customer, but not a different amount such as 3.7%.
State statute provides the City with authority to accept a payment by credit card and to charge
“convenience fees” or “service charges” when a customer elects to use the credit card. State statute limits
these fees on credit card payments to 5% of the purchase price.
There are new notice requirements that cities should be aware of when accepting credit card payments
and adding a surcharge, including:
• When the customer is paying in person, the city staff must inform the customer of the surcharge
both verbally at the time of the sale and by a sign noticeably posted at the point of sale.
• When the customer is paying by computer or mobile device, the city must inform the customer of
the surcharge by clearly posting a surcharge notice during the sale, at the point of sale, on the
customer order summary, or on the checkout page of the website or mobile application.
• When the customer is paying over the phone, the city staff must inform the customer of the
surcharge verbally.
The proposed ordinance removes a specific amount from the Fee Schedule and instead notes that the City
may charge a convenience fee in accordance with the limits and notice requirements of State statute.
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Financial Impact:
Not applicable
Commission Discussion:
Not applicable
Attachments:
1st Reading: An Ordinance of the City of Hastings, Minnesota Amending City Code Chapter 34 – Fees
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First Reading
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF HASTINGS, MINNESOTA
AMENDING HASTINGS CITY CODE CHAPTER 34 – FEES
The City Council of the City of Hastings, Dakota County, Minnesota does hereby ordain as
follows:
SECTION 1. AMENDMENT. The Code of the City of Hastings, County of Dakota, State of
Minnesota, Chapter 34.03 Fee Schedule – Finance, shall be amended by deleting reference to “Credit
Card Convenience Fee” as follows:
34.03 Finance
Credit Card Convenience Fee 3.7%
SECTION 2. AMENDMENT. The Code of the City of Hastings, County of Dakota, State of
Minnesota, Chapter 34.04 Special Or Non-Routine Services By City Departments: Fees shall be
amended by adding Paragraph B as follows:
B. When a customer elects to use a credit card, the City may charge a convenience fee or
service charge in accordance with limits and notice requirements under State statute.
SECTION 3. SUMMARY PUBLICATION. Pursuant to Minnesota Statutes Section
412.191, in the case of a lengthy ordinance, a summary may be published. While a copy of the entire
ordinance is available without cost at the office of the City Clerk, the following summary is approved
by the City Council and shall be published in lieu of publishing the entire ordinance.
The text amendment adopted by the Hastings City Council on
, modifies Section 34.03 and 34.04 City Code regarding
charging a convenience fee or service charge on credit card transactions in
accordance with State statute for limits and notice requirements.
SECTION 3. EFFECTIVE DATE. This Ordinance shall be in full force and effect from and
after its passage and publication according to law.
Adopted by the Hastings City Council on this day of , 2024 by the
following vote:
Ayes:
Nays:
Absent:
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First Reading
Mary D. Fasbender, Mayor
ATTEST:
Kelly Murtaugh, City Clerk
I hereby certify that the above is a true and correct copy of the Ordinance passed to and adopted by
the City of Hastings, County of Dakota, Minnesota, on the day of , 2024, as
disclosed by the records of the City of Hastings on file and of record in the office.
Published in the Hastings Journal on .
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