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Columbia City Council votes to add service fee when paying utility bills with credit cards

Monday, March 5, 2012 | 9:17 p.m. CST; updated 7:44 a.m. CST, Tuesday, March 6, 2012

COLUMBIA — Residents who earn perks by paying bills via credit card might want to reconsider those frequent flier miles: Beginning in the fall, people who charge their utility bills will be assessed a service fee.

The City Council unanimously approved the change in billing procedure Monday. At its Feb. 20 meeting, the council tabled the revision of another amendment, which would have offered discounts to "large utilities customers" for paying their bills in cash. 

According to city documents, the service fee is intended to "recover credit card fees currently paid by the city." The same documents said the city paid nearly $500,000 in these fees last year.

The exact amount that will be charged to customers who choose to pay via credit card, however, remains "to be determined by the finance director," according to the language of the amendment.

A complicating factor is a potential interface change. Officials are currently accepting bids to replace the city's present banking contract, which handles credit card fees and is set to expire in August, according to a city memo. Until a new company has been selected, the document says "it may be necessary to wait ... to know the proper service rate to charge (utilities) customers."

But First Ward Councilman Fred Schmidt pointed to the amendment's ambiguity as a benefit: "What I like about this ... is it puts it in the hands of an administrator who can adjust it (based on public response)."

Although the fee itself has not yet been decided, City Finance Director John Blattel did confirm that its effect would vary from customer to customer.

"The larger the bill, the larger the fee. It's based on a percentage," Blattel said. While some customers might be deterred, others might see the fee as merely a trivial price to pay for convenience.

Blattel also indicated that the finance department might implement similar service charges for other online payments — such as business license fees, which will be digitally payable by the end of April — in the near future.

"We're going to use this authority as an indicator of what the council would like us to do," he said.

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