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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