Chair fewer this is the june 3, 2020, meeting of the budget and finance committee. I am supervisor sandra lee fewer. My Committee Members are Shamann Walton and rafael mandelman. Madam clerk, do you have any announcements . Clerk yes. [agenda item read]. Chair fewer thank you very much, madam clerk. Can you please call item number 1. Clerk yes. Item 1, resolution authorizing the officer of the treasurer and Tax Collector to amend a software as a Service Agreement and support contract with citybase, incorporated, to extend to a fiveyear options period of two years each, for a new term of april 17, 2018 through april 16, 2023 and increasing the contract amount by 27,400,000 for a total amount not to exceed 37 millio million. Chair fewer if you very much, madam clerk. We have a representative from the treasurer and Tax Collectors office. Thank you so much, supervisor, for letting me speak about this contract. Im going to share my screen, and while i do that a little bit, im going to try to babble and give you some time. It is a contract with citybase. It allows us to do all of our online Payment Processing credit cards, debit cards, as well as echeck. This is a contract where the city is not actually allocating this contract awarded amount to citybase. The amount is really an effort to be incredibly transparent with you as well as to make sure we have really competitive processes. The fees that we pay citybase as a contract actually come from the revenue itself or are added by our constituents. Ill talk specifically about that and how it comports specifically in your daytoday life when you make purchases. Citybase is an online Data Platform thats used by the majority of our departments any time you do any kind of credit card payments, including taxes, fees, as well as in our Community Clinics or d. P. H. As well as our parking meters. It is serving as a gateway, which ill present later, as well as Payment Options right now. It is a very simple, clean method for people to pay to get their information quickly into the Payment Gateway and then allow them to pay obligations that are owed to the city for services or taxes. It allowed for visa, debit, and a. C. H. , as well. Were trying out an investment for our ability to do online payment. Its to, really, improve services for our constituents so they can pay for things, which is particularly helpful for shelter in place so they dont have to come into our place of business. As i tried to explain on the payment page, there are three ways we pay citybase. One is for taxes and fees, and in that case, we are adding a service fee on top of the tax and fee. Government entities are the only ones allowed to add a fee outside of the industry because its the only way that we can make sure that our services are reduced. Were not taking the service fee out of the principle owed to the city and sheet. Other things that are services such as electricity and dog license fees, there is no service fee. The department is paying that fee to citybase. Its akin to when you and i pay for something at a grocery store, we dont see what portion of that is going to the gateway provider, we just pay the amount. And then, we option have a free option for online payments, and that is echeck. A small portion of the payment, but a very large volume comes through echeck. Youre essentially putting on the digits from the bottom of your check where you would be putting in the back of your credit card information. To illuminate that a little bit better, there are two different ways that we experience a payment to a Credit Card Company just created to pay a tax sale. Lets say the bill is 110. The option to allow you to pay by credit card, theyre agreeing to add to that the 2. 4 or 2. 5, depending on the type of tax, theyre actively agreeing to add that 16 15. 28. That 15. 28 goes to citybase to pay for all of those mastercard and visa fees and the rest goes into our general fund. On the flip side, you have a fee, and because its a service, im paying 45. The 2 that i would be paying to citybase, or part of that 45, and then essentially, animal care and control is paying citybase the 2. The net effect for the city is 43, with 2 going to citybase to pay for visa and mastercard and all those other charges and 43 coming into the city. This will enable us to collect about 17 billion for the city and county. We estimate that the majority of the costs will be coming around 18 million of the 37 million will be coming from the constituents, so thatll be me paying my tax and adding and agreeing to that amendment. The other is when its baked into cost, like dog license, copayments, you know, parking meters, and such. So again, i want to reiterate that we are regulated by what we can add a service fee to and what we cannot add a service fee to. It is important, i guess, for the credit card industry that this option is possible. And then, obviously, we have the echeck that i spoke about. This is a completely free option for all online users to pay that dont have to you know, they dont have a credit they dont want to use their credit card because they dont want to pay the additional charge, they have a free option to pay it. That echeck option is a great option and probably highly utilized for tax fees for obvious reasons. This gives you a sense of transactions by department. I did not include t. T. X. Because obviously the average is so varied between business and property, so it wasnt as meaningful. And the purple, which you can barely see, is what the department or the taxpayer is charged. Chair fewer excuse me. Do you want to share a screen shot of that . Its not sharing it . Chair fewer no, were only seeing your face. Oh, my gosh im so ugly. Im really sorry. Excuse me. It is not is it sharing now . Supervisor fewer no. Clerk madam chair, we have a copy of the slide. Would you like me to try sharing the screen . Chair fewer miss shaw, would you care to have madam clerk share her copy on the screen . Yeah. Im really, really sorry, supervisor fewer. It just worked. We did it. Chair fewer here we go. Clerk do you know which slide . Can you advance it advance it its the graph with the bar chart. One more. Chair fewer can we pause on that one . Sure. Go back. Chair fewer yeah, yeah, let me look at this. So these are examples what were looking at here is People Animal Care and control, were using a dog license as an example, is that correct . What youre saying is someone would pay 45 for a dog license, and then the city gets 43 for it, and 2 goes to this company that allows them to use a credit card or debt credit card, is that correct . Yes. Chair fewer and then, on the business tax bill, the fee is a little higher, 2. 5 of the base fee or do so is the citybase fee 2 on all transactions . No. I can explain it a little bit. The industry determines the fee on the normal credit cards that are utilized to pay those items. So for property tax, for example, the fee is a little bit less if it tends to be Consumer Credit cards that are less expensive through the entirety of the banking and rural merchant. These are Mastercard Networks. If you think about our uses, we have cards that have rewards and mileage and then cards that have nothing. All of those benefits that we are afforded as consumers are paid for at this level. We gave them the power of utilization and transaction by card type as well as monetary value so we can get the most competitive rates out there. Unfortunately, you know, whif youre getting safeway not safeway, but a cup of coffee, the generate is 3. 5 to 4 , so the city is able to negotiate a favorable rate for ourselves and our constituents. Chair fewer so youre saying if youre using a card through a visa or Mastercard Network, its one fee, and its another fee if theyre using a card outside of the Mastercard Network . The rates fluctuate, so we have the normal rates for business tax and property tax, for services, so, you know, its not fluctuating type by type, so these are averages that we have. Its a 2. 5 at the average. That is the rate for business tax, and its dependent on the history of the types of cards that have been utilized for business tax. Chair fewer so would you then assume if youre using a different kind of card to pay that, then that fee may be higher . Yes. I know a lot of people have different kinds of cards. People use cards that often have miles frequent flyer miles, when we were able to travel. Those rates are normally higher than somebody using, say, their bank card, but this is the rate just for that type of so for business tax, its 2. 5 , for property tax, its 2. 25, which we were able to negotiate a better rate. Chair fewer so its not per card, its for individuals, all individuals in use. Correct. Chair fewer when you get into things like parking meters, for example, does that make a difference what card you use . That we were you know, we did a very competitive process with marking meters because obviously, you know, 40 cents for a tie, 2. 25 is really expensive for the city and m. T. A. So we put together what we call an m. T. A. Ticket, so theyre allowed a different pricing structure. Its a really small decimal percentage on the 1. 2525 or 1. 30 or 1. 40, depending on whatever were paying on our parking meters. So if you have phone apps on upay, you sometimes see pricing over the day,. 99,. 99, and that makes it cheaper for m. T. A. To process the day. If i use parking meters three times a day,. 25,. 35,. 35, im charged once, and that makes it easier for the city to be able to pay the industry. We were the first city to be able to do that. Chair fewer and what about people putting money on their surface cards . Surface cards are n clipp cards . Clipper® cards are not part of the larger municipal m. T. C. Contract, so its not part of this contract and not part of these pieces. I cant speak to that. Sorry. Chair fewer okay. Very interesting. Please continue. No, i apologize if we advanced. I think i know what happened. I had to request control, but i still havent been given control, which is a challenge, so i apologize. Can we advance one more . Chair fewer yes, lets go to the next page. I think i will need assistance. Chair fewer madam clerk. Great. Thank you. So this is just the average transaction costs by department except for the office of the treasurer and Tax Collector since the costs there are so varied. The purple shows you the cost in relation to what theyre paying for. So you can see that the fee is quite quite low. When i say that, again, some of these are fees that the constituent pays, and some of these are things that the department pays as part of the fee itself. Chair fewer miss shaw, so when people use their credit cards to pay their property taxes and things, are they advised that theyre being charged to do that . Yes. They actively have to affirm that theyre being charged the service fee. Only a few things have the added fee, which is only taxes and fees. Were only allowed to add fees to things that are taxes and fees so that the citys general fund or principle is not diluted because we have to take some of that money and pay for all of the inner change banking, visa, mastercard components of a credit card transaction, and we always have a free option, which is echeck, which is akin to putting in your credit card number, but its putting the digits on the bottom of your check in, and those are free on all the platforms, and its 29 cents by the city, and thats to make sure we have an online payment platform. And that is a very popular pay that people pay for taxes and fees around the city. If we didnt, credit card business would be very different. People use it because its free. A Credit Card Fee would be much more significant on a credit card charge. Chair fewer okay. And then, i think my next question is we werent able so i see how this is actually a service that makes it easier for people, but i also think that the company has an incredible client in the city and county of San Francisco. This is the best rate we can get . I think gouging people at this time and also, people feel more safer using a credit card also now on a lot of these transactions is that i actually feel im wondering why we werent actually able to negotiate a better rate on this than 2. 5 . 2. 5 might sound like a lot on property, but its actually a really competitive rate. Coffee shops and things that you buy are usually 3. 5 . Thats why some places that you go to say they wont accept a credit card payment unless you owe an amount over 10 because it costs so much for that service. Its one of the its fully funded the next day, and its as incredible tool that we use. It essentially means that the business is floating up the city and county because they havent cleared all the money thats been transacted upon. Chair fewer well, you know, and Credit Card Companies are charging 30 interest on balances that are unpaid, and so, i mean, theyre getting in bed with a huge thats corporation. Were just feeding that debt for them and that theyre collecting upwards sometimes of 33 interest on unpaid balances. But having said that, lets hear from any comments or questions from my colleagues . Are you through with your presentation, miss shaw . I think there is just one more slide to go forward with, which is really that this also affords a p. C. I. Compliance. What this means is if theres a breach, we are not we are protected around liability. As you can imagine, there are many attempts to break in allaround. The product is really easy to use and many departments quickly on boarding. Chair fewer okay. Thats it . Okay. Can we hear from the b. L. A. , please. Yes. Good morning, chair fewer, members of the committee. Severin campbell from the Budget Analysts Office. The proposed resolution thats before you approves the Second Amendment to the existing agreement between the treasurer and tact Collector Office and citybase for online services. It extends the agreement to 2023 and increases the amount from 27. 4 milli 27. 4 million b million to 37 million. There are some new transactions that are being added to the agreement. So we summarize these sources and uses of funds in table one of pages 4 and 5 of our report. That is consistent with city policy and city processes, so we do recommend approval, and im available for any questions that you may have. Chair fewer thank you very much. Any comments or questions from my colleagues at all . I have one more question, miss shaw. What are these new transactions that are going to be included in this . What are the new transactions . We are adding more d. B. I. Onto this. The recorder system has gone live. I think the county clerk is going to be going live. There are new Mayors Office of disability and board of appeals that are going live that will happen right now, within the next three months, and then, im sure there will be others as more of the planning and online centers go forward, and im sure theyll be added onto this platform. Chair fewer thank you. Seeing no queue, and no comments or questions from my colleagues, madam clerk, can you open this up for Public Comment. Clerk yes. Madam operator, can you please queue the callers on the line. Would the clerk let us know if there are any callers who wish to comment on this item . Operator madam chair, there are no callers who wish to speak. Chair fewer thank you, madam clerk. Public comment on item 1 is now closed. So colleagues, any questions or comments at all . I just want to say for the record that i understand that this is a service thats very important to the city and county of San Francisco. I also want to say that Credit Card Companies are gouging people, and theyre gouging the American People for multiple reasons. People who dont have other means of credit, people who dont have savings, so even though i know this is a service that were going to depend more and more on, i just have to say this on the record. This is immoral to charge people these high interest rates, and by doing this, we are also perpetuating that cycle of indebtedness and poverty, and i just want to say that i you know, i feel very reluctant on this today to vote on this and pass this out of committee because i think that people who are trying to recover will have an even harder time, and we know these Credit Card Companies tend to not give credit to many people in our community, that it is difficult for many people to get credit cards, and i think that there is an abuse of credit card use in our society. I know this is an important vehicle for the city and county of San Francisco to collect fees. It worries me, i think, that we are not able to get a better deal than this, and so my next question to you, miss shaw, is what are the other city and counties neighboring what type of transactions these are actually getting from the Credit Card Companies and are they using the same company . Yeah, thank you for the question. I do want to reiterate that we do have the free option, the echeck, for those very reasons, some of those that you mentioned. Chair fewer and what are their rates . We are finding that santa clara is piggybacking on this contract, as well as denver and austin. They are benefiting for themselves. Denver, austin, santa clara just agreed to the piggyback, not as a request by their own choice. They did a request for a contract, as well as seattle and another one, and im trying to think of any others that we know of. So our neighboring communities are looking at these contracts and finding the rates to be acceptable. We will continue to look at these and continue to be as transparent as possible with our rates. Chair fewer some of these cities are looking at these contracts and putting them in a Community Benefits package ask asking them or including it in optional, of course, for the people who get into these contracts to have a Community Benefit contract. So i would advise the ci