Tigard utility users may need to consider a new way to pay after city councilors discuss adding credit card processing fees to utility bills.
“The city can choose to absorb these costs or pass them directly to customers that choose to pay by card,” Tigard Finance Director Eric Kang said at a Sept. 8 meeting with city councilors. “Part of this discussion is establishing a more clear and more consistent policy framework.”
While the council has not set an implementation timeline, Tigard City Councilors unanimously directed city staff to develop a process for adding credit card processing fees to utility bills at their meeting. City staff recommended the council make this change after estimating it would save the city’s utility system around $300,000 a year.
“The focus and intent behind this staff recommendation is really about influencing or changing customer behavior to use a lower-cost payment method to save the utility system approximately $300,000,” Kang said. “The city does not retain these fees in either payment option, so ideally no one pays the fee.”
Tigard currently absorbs interchange fees, and residents do not see charges when paying utility bills. Kang recommended the city take a hybrid approach, which would increase customers’ bills by 3%, unless they elected to pay with check, e-check or cash; methods that are not surcharged by credit card companies.
Kang explained that the estimated $300,000 the city could save would be achieved only if every utility bill were paid with an alternative to credit cards.
In his presentation at the meeting, Kang said the city could use any recovered funds from fee collection to expand its leak credit program or emergency assistance program.
“We need to make sure there is a no-fee payment method for customers,” Kang said. “That is the reason we are not recommending passing through all the costs.”
Councilors agreed with Kang, arguing that the measure would incentivize users to avoid paying with credit cards, allowing everyone to avoid the fee.
“We’re trying to change overall behavior,” Councilor Faraz Ghoddusi said about the initiative. “And by leaning people towards things like the e-checks, those end up being lower fees.”
Councilor Jeanette Shaw also said she supported the intent of the rate change.
“In the end we don’t want anybody to have to pay a fee, hence why we have this now and this alternative fee approach, which is the e-check,” Shaw said.
Kang told councilors that, in the future, the city could implement an information campaign to make Tigard ratepayers aware of the increase. He did not specify when such a campaign could launch.
While the ideas discussed at the meeting weren’t put on a strict schedule, Tigard Mayor Yi-Kang Hu said residents could receive a refund on their fees for the first “couple months.”
“I will ask that at least for the first couple months, for people who ask questions, you will refund their fee no questions asked,” Hu asked at the meeting. “It will ease the transition pain.”
