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Posted on: June 22, 2017

BOMA considering removal of City subsidy for credit card transaction fees

Credit Card convenience fees

Spring Hill residents who pay their monthly utility bills or other City financial transactions using a credit or debit card may soon be asked to pay a small fee to cover the cost of that convenience.

Currently, the City of Spring Hill absorbs the costs of convenience fees charged to the City by credit card companies for the processing of each transaction, a subsidy that costs taxpayers at least $125,000 a year in the City budget. Requiring the public to begin paying these transaction fees would allow the City to apply the additional $125,000 toward other needed projects within both the Water/Sewer and General Funds of the budget.

The fee will be charged on credit/debit payments for utility bills, permits, business licenses, property taxes, and any other transactions using a credit or debit card. This includes paying with a card online, in person, or by phone.

The Spring Hill Board of Mayor and Aldermen (BOMA) voted at its budget meeting on Tuesday, June 13, to begin charging the fee some time during the new fiscal year, which begins July 1. The board’s final vote on the 2017-18 Budget, which includes the proposed fee, is set for 6:30 p.m. Friday, June 30, at City Hall.

“Shifting this fee from the expense side of the budget to the revenue side will effectively create a wash in the budget,” said Finance Director Jim Smith. “The intent of this action is to cover the costs of these transactions, which is the industry standard among most governments or businesses that process credit card payments.”

Residents have multiple options to avoid paying these fees, including:

 - Signing up for auto-draft to allow utility billing payments to be automatically drafted from your checking account

 - Mailing in a check to the City of Spring Hill, P.O. Box 789, Spring Hill, TN 37174

 - Dropping off a payment at the convenient drop box in front of City Hall

 - Paying in person with cash or check at City Hall, 199 Town Center Parkway.

 If approved by the BOMA as proposed, the Finance Department would determine a reasonable fee designed to cover the costs of credit/debit card transaction fees based on previous year’s internal receipts. This would most likely include a flat-rate convenience fee for online transactions and a percentage rate surcharge for credit/debit card transactions made in person at City Hall. After making adjustments with our online payment vendor, the new fee could take effect some time during the first quarter of the new fiscal year. If approved, the effective date and the amount of the fee will be announced at a later time.

News Release-6/21/17
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