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HomeMy WebLinkAboutCOD-006-10CI8L1ll~°COIl REPORT CORPORATE SERVICES DEPARTMENT Meeting: GENERAL PURPOSE AND ADMINISTRATION Date: FEB 22, 2010 Resolution#: G ~F}• -136-/0 By-law#: N/A Report: COD-006-10 File#: N/A Subject: USE OF CREDIT CARDS FOR PAYING ADVERTISING & SPONSORSHIP FEES RECOMMENDATIONS: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: THAT Report COD-006-10 be received; THAT Council allows an exemption to the restricted use of credit cards, to permit credit card use as a method of paying for advertising and sponsorship costs upfront; and 3. That if it is permissible by legislation, Council authorizes staff to impose a "per transaction" fee for credit card use, that is consistent with other existing transaction fees and reduces the impact of accepting credit cards. Submitted by: arie Marano Director of Corporate Services/Human Resources M M/gj Reviewed by: ~../ f~.~.~ -~~ Franklin Wu, Chief Administrative Officer CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO LiC 3A6 T (905)623-3379 F (905)623-0830 REPORT NO.: COD-006-70 PAGE 2 BACKGROUND AND COMMENT The Corporate Services Department -Communications & Tourism Division sells advertising to local merchants and businesses to offset the cost of producing municipal publications such as the seasonal Recreation & Leisure Guides (4 per year) and the annual Clarington Visitors Guides. As of December 31, 2009, the advertising revenue collected was $ 90,065.61 (Source: December 31, 2009 Trial Balance). In recent years, the Finance Department has requested that the Communications & Tourism Division collect advertising fees in advance - at the time of signing the advertising agreement. This has been feasible by allowing advertisers, the majority of which are small to medium sized enterprises; to pay these fees in advance using their business credit card. Paying by credit card appears to be a standard practice as it allows businesses to pay their advertising expenses over time (if they choose) while the Municipality collects their fees upfront. In addition, sponsorships can also be impacted by the inability to use credit cards to pay sponsorship expenses. For example, for the Mayor's Golf Classic a significant number of sponsorship transactions take place over the telephone and involve the use of credit cards. The offices of many of the corporate sponsors are located elsewhere in the GTA. Sponsorship revenue in 2010 ($64,321.00 in 2009) may suffer if sponsor representatives cannot register and pay the associated fees by credit card. CONVENIENCE FEE If permitted by legislation, staff recommend imposing a reasonable and standard type fee for processing credit card payments/purchases. The Municipality, like other vendors, is required to pay a percentage fee plus a per transaction fee to the financial institution who processes municipal transactions and the fee would help offset such charges. Some businesses, such as those who provide online payment services for parking fines, charge a "convenience fee" of $2.50 applied to every transaction. It is not stated on their website how this fee was created or what it's intent is -although it would be presumably be to cover bank transaction fees that the company incurs by providing this service. To not have to charge a "convenience fee" would be the ideal solution while allowing advertisers/sponsors the opportunity to pay associated fees by credit card. In light of current economic and budget REPORT NO.: COD-006-10 PAGE 3 concerns, the compromise of the recommend fee process could be established in the Municipality where by those individuals and/or businesses who prefer or choose to pay their fees by credit card may continue to do so but will incur a "convenience fee" to cover the transactions fees incurred by the Municipality. SUMMARY Providing the service, even with the suggested "convenience fee" may be a way that the Municipality of Clarington may assist small business to continue promoting their business to residents (and visitors) in municipal publications. It may also assist municipal departments seek event sponsorship to offset their event budgets -such as the Mayor's Golf Classic. The Director of Finance has advised that the budget impact should be negligible even if the fee is not legislatively permitted since the volume of transactions is not significant.