A small credit card fee, similar to businesses, could be instated for CC users at Woodlands County office

Woodlands County Council held its Governance & Priorities Committee meeting last Wednesday. The 6:00 pm meeting was a short one featuring two draft policies regarding the use of credit cards. The first draft presented was for Policy 1517, which concerned Woodlands County’s surcharge to those who pay for services or fees with their credit card.

As part of the County’s 5-year Recovery Plan, the Administration has been reviewing the costs connected to the level of service provided. The rationale presented in the meeting’s Request for Decision (RFD) stated that draft Policy #1517 is a “cost-neutral initiative to balance the convenience provided to ratepayers with different payment options while minimizing the impact of credit card surcharge fees on the County’s revenue source.”

Woodlands County has paid significant fees for ratepayers using credit cards in the last three years. In 2020, they paid $40,250.57, the highest of the three years numbers were provided for. In 2021, they paid $32,582.66. Last year, they paid a bit less, $32,307.53. With $30,000 set aside in the 2023 Budget for Visa/Mastercard fees, and $4,000 for debit card transaction fees, some pocket change needed to be found to bring the cost under its mark or, better yet, save it entirely.

Victoria Chan, Director of Corporate Services, explained that draft Policy #1517 was new. “We want to take advantage of the new allowable 2.4 percent that we could charge to anyone using a credit card. This is a result of a class-action lawsuit backed by the small and medium businesses back in 2022. In this case, the network facility allows the Canadian merchants to charge 2.4 percent on the usage of the credit cards.”

The class action lawsuit she referenced began in 2011 when Canadian businesses took Visa and Mastercard to court over fees the companies charged retailers when their customers used credit cards to pay. The settlement was finalized last year, refunding merchants hundreds of millions in fees. In the settlement, businesses also gained the right to pass those user charges onto customers directly, which they couldn’t before.

Chan said that Woodlands County is one of the few municipalities that accept credit cards as payment for property taxes, specifically with no limit to the transaction. She said that allowing the administration to charge the 2.4 percent surcharge would free up the money spent on it. “This policy is to neutralize the fee that the credit card facility charges,” explained Chan.

Councillor Wilhelm asked if the four thousand dollar fee for debit card transactions was included. He wondered if they would be looking to initiate a fee recoup for it too. Chan said no. “At this point, we are not because it is about five cents to twenty-five cents per transaction for using a debit card, so we find that this is a fee that we can manage. We want to encourage less usage of cash.”

Councillor Prestidge said that the change could be a double-edged sword from conversations he had had. “Either we lose some money using the credit cards, or we have people that don’t pay on time. A lot of people will pay with their credit cards, on time, and they won’t do it with paying cash or a cheque, or something.”

Councillor Wilhelm reiterated that the change wasn’t stopping anyone from using their credit card. “This isn’t going to prevent them from paying with their credit card. They just have to eat a 2.4 percent fee. This happens at a lot of businesses now if you’re paying with a credit card. Most businesses, especially with anywhere where you’re paying in the thousands of dollars, they don’t eat that 2.4 percent anymore.”

Councillor Kusch echoed his colleague’s comment. “There are a lot of businesses you see that do have a surcharge, especially on large credit card purchases.” Continuing the conversation, Councillor Wilhelm said many businesses have a sticker displayed stating the surcharge. “I don’t think it’s unreasonable to ask for that to be compensated because somebody’s got to pay that.” Councillor Deane motioned to forward the conversation to an upcoming council meeting, where the policy could be voted on.

The second draft policy was for Policy 1518 – Corporate Purchasing Card Use. “This policy is an internal policy. It governs the use of the corporate purchase card by the administration,” explained Chan. “Right now, we already have something in place, but not formalized in a policy. This has been identified by the external auditors as something that we should develop. This is a policy developed in conjunction with the management’s input. One of the criteria is that the credit card users must reconcile the statements. This is to formalize the existence process.”

Councillor Deane asked two questions. “Currently, are the credit card users reconciling, or will this be a change for the user as well?” Chan responded. “Right now, it is not usually done by the cardholders. It’s done by Finance (department). With this policy in place, the cardholders will be now accountable and responsible for that.” CAO Gordon Frank said that they do ensure cardholders provide receipts and that it is reconciled. “If there is a receipt missing, we hunt it down.”

Councillor Deane said it felt straightforward and made “complete sense.” He made the motion to send the discussion item to Council for deliberation. Both draft policy motions made by Deane were unanimous. Reeve Burrows was absent.