City to cut credit fees on services

COVINGTON -- After eliminating credit card fees for utility customers, the Covington City Council voted last week to take it one step further.

"We eliminated fees for utility bills, but we want to extend this to our other departments," said Mayor Kim Carter during the council's Sept. 8 meeting.

According to City Manager Steve Horton, the city will absorb credit card transaction fees for payments in all departments -- such as those needing permits or copies of accident reports -- except those associated with traffic tickets and court-related bonds, fines or fees.

On Aug. 16, the City Council voted to absorb the 2.95 percent fee applied to each credit and debit card payment of utility bills. Horton said at that time the decision was made due to regular complaints from customers about the transaction fee.

Bobby Johnson, information systems manager for the city, said the city has budgeted $50,000 to cover the convenience fees on utility payments and for the other departments.

Johnson said that from July 30, 2009, through July 30, 2010, the city collected 6,375 credit and debit card payments for utilities for a total of $1,292,188.18. The 2.95 percent convenience fee per transaction added $38,207.03, for a total of $1,330,395.21.

The cost to Covington for absorbing the fees for utility customers during this time would be $18,806.25, Johnson said.

"We expect the 'number' of credit/debit card payments to possibly double to 13,500, based on the responses we have received from our customers," Johnson said in an e-mailed response to questions.

The city uses a company called Collector Solutions Inc. of Pensacola, Fla., to process credit/debit card payments.

-- Staff Reporter Crystal Tatum contributed to this article.