HomeMy WebLinkAboutItem 2d: Contract with HP Enterprise Services for Electronic Bill Payment Services 4of AR 9C 9
or,A.1.I ,
,O
U~ r F9111";:$:74ike
0
„, .
STAFF REPORT
Administrative Services Department
DATE: February 21, 2012
TO: Mayor and City Council
FROM: Hue Quach, Administrative Services Director 4'
Shannon Huang, Financial Services Manager -surer.
SUBJECT: AUTHORIZE THE CITY MANAGER TO AWARD A THREE YEAR
CONTRACT TO HP ENTERPRISE SERVICES, LLC WITH THE OPTION
TO RENEW FOR TWO MORE YEARS FOR ELECTRONIC BILL
PAYMENT SERVICES
Recommendation: Approve
SUMMARY
In an effort to provide more efficient and convenient payment services to the City's utility
customers, staff requested proposals from vendors who could provide a hosted
Payment Card Industry Data Security Standard (PCI-DSS) compliant electronic bill
payment service. All services including both hardware and software will be
implemented and maintained by the vendor. This functionality will provide additional
payment channels to our customers, while increasing efficiencies within the Financial
Services Division.
Staff received proposals from four vendors and has reviewed their services and
products. It is recommended that the City award the electronic bill payment service
contract to HP Enterprise Services who proposed the overall lowest costs to our
residents.
DISCUSSION
The City supplies water and sewer services to approximately 15,000 households in the
City, and accepts payments by credit card, check and cash through mail or at the City
Hall Cashier counter. Automatic debit services are also available to our customers
currently by setting up automatic ACH transfers in their bank accounts. The new
electronic bill payment service will accept credit card and e-check through the Internet
and payment by phone (IVR) services 24/7.
Page 1 of 4
The advantage of using a hosted online payment system is that the entire payment
transaction is conducted on a secure site managed by payment experts who are
compliant with all required regulations. No confidential information, such as credit card
numbers, will be stored on City servers or viewed by City staff. The payments can be
made 24/7 from anywhere, and the payments can also be pre-scheduled to avoid any
late fees.
Staff requested proposals from vendors who provide a hosted PCI-DSS compliant
electronic bill payment service and received four responses. Staff tested and reviewed
each product and service with all the vendors. It appears that all four vendors can
provide the following required services:
• The payment application must be accessible via a link on the City's website and all
electronic bill payment customers must be serviced via hosted application entirely
run on vendor's domain security certificate and Payment Card Industry Data Security
Standard (PCI-DSS) compliant infrastructure.
• The vendor application must be able to interface securely with the City's billing
system.
• The application must be able to accept either a one-time payment with at least two
pieces of verified information or payments made by enrolled customers who have
setup user ID and password using their e-mail for correspondence. The system
shall also allow users with multiple accounts to use one payment account, and
schedule future payments. The application shall also maintain payment history for at
least six months.
• The application must provide the configure option to pay an amount other than the
account balance or to only accept payments of the exact account balance.
• The application must supply an interface for City customer service personnel to
administer the application via web, and require no software to be installed. It should
also provide a daily report of payments.
• The application must have the capacity to be extended to other type of payments
including parking citation and miscellaneous receivable.
Staff gathered additional information relating to online credit card costs and surveyed
other governmental entities' online payment practice. Survey responses indicate that
90 percent of the surveyed agencies request their customers to pay for the convenience
fees, which are mostly in the range of $2.95 to $4.95 per transaction for all payment
types including e-checks.
As staff is planning to implement online payment option for water and sewer charges
first and then expand the service to parking citation and miscellaneous receivables, the
vendors were requested to propose their costs for all three types of payments on a
convenience fee basis. Users will be required to pay a transaction fee that is disclosed
Page 2 of 4
upfront prior to the authorization of any payments to the hosting vendor for using this
service. The entire amount of the convenience fees will be collected by the vendor with
the City only receiving payments for city charges.
A summary of the proposed costs is listed as follows:
Table I
Convenience fee Summary
Per transaction Utility Parking Citation Misc. Billing
HP Enterprise $2.95/$2.50 for e-check $2.00/$2.50 for e-check $4.25/$2.50 for e-check
Official Payment $2.95 $3.95 $4.95
Paymentus $3.50 capped at$300 per $2.95 capped at$300 per $3.95 capped at$300 per
transaction transaction transaction
Best Practice $3.95 $3.95 $3.95
All costs are guaranteed for six months. The vendor may adjust the convenience fees
depending on the volume of payments and the average per transaction amount.
However, prior to any fee adjustments, the vendor is required to notify the City with the
reasoning for an adjustment.
Staff would like to recommend using the services provided by HP Enterprises Services
who has proposed the lowest overall costs. HP Enterprises was first established in
1994 and has provided web payment services to more than 400 clients nationwide
including higher education and state and local government. Staff also contacted other
public agencies that currently work with HP to inquire on the vendor's services and
received positive responses.
There will be no upfront implementation or monthly processing costs charged by HP
Enterprises Services. However, additional programming charges that is estimated to
not exceed $3,000 may be required to establish the interface between our existing
billing system and HP's application.
FISCAL IMPACT
The programing costs for the interface between the City's existing billing systems and
the payment vendor's web system has been included in the General Fund budget for
FY2011-12. There is no additional cost anticipated after the implementation.
Page 3 of 4
RECOMMENDATION
Authorize the City manager to Award a three year contract to
HP Enterprise Services, LLC with the option to renew for two
more years for electronic bill payment services
APPROVED:
Donald Penman
City Manager
Page 4 of 4