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Staff Report
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Report To: General Government Committee
Date of Meeting: April 17, 2023
Reviewed By: Mary -Anne Dempster, CAO
File Number:
Report Subject: Payment Modernization Initiative
Recommendations:
Report Number: CAO-010-23
Resolution#: GG-097-23
By-law Number:
1. That Report CAO-010-23 and any related delegations or communication items, be
received; and
2. That the discontinuation of the acceptance of cash as a form of payment for services
(except at all Recreational Facilities) be implemented effective August 1, 2023; and
3. That the discontinuation of the acceptance of cash as a form of payment for services
at all Recreational Facilities be implemented during the first quarter of 2024; and
4. That Resolution #C-471-09 (Appendix 3 — Item 6) be repealed to allow for credit card
payments; and
5. That transaction fees be passed along where possible; and
6. That all interested parties listed in Report CAO-010-23 and any delegations be
advised of Council's decision.
Municipality of Clarington
Report CAO-010-23
Report Overview
Page 2
This Report sets out a recommended approach to move towards a cashless payment
system. It is expected that both financial and productivity efficiencies will be realized due to
the implementation of the recommendations. Significant planning and effort will be
undertaken to ensure a robust communications and engagement strategy is undertaken to
inform the public and promote alternate payment options.
1. Background
1.1 The Municipality of Clarington (the Municipality) provides a vast array of transactional
services that require payment by residents and business owners each year.
1.2 Historically, the Municipality has not limited the amount of cash accepted as a form of
payment.
1.3 Globally, payment methods and behaviours are evolving away from paper (cash &
cheque) to digital (debit, credit and online).
1.4 Cash transactions at the Municipality account for approximately 26 percent of our total
transactions and only 0.4 percent of the total revenue processed on an annual basis.
1.5 Of the 0.4 percent of total cash revenue, over 75 percent is from Tax payments.
1.6 Community Services accounts for eight percent of the total cash revenue though a
majority of small value charges less than $5.00.
2. Payment Modernization Initiative
2.1 The Municipality continuously explores opportunities to enhance processes and provide
services that are more efficient.
2.2 Cashless payments offer a modernized, convenient, and safe way to complete
transactions.
2.3 The benefits and challenges of not accepting cash are as follows:
Benefits:
a. Eliminates cash on premises and associated health and security risks
b. Eliminates risk of accepting counterfeit bills
c. Reduces processing time
d. Reduces reconciliation efforts associated with cash transactions
e. Cost Savings $53,000 annually
Municipality of Clarington
Report CAO-010-23
Page 3
Challenges:
a. May be perceived as an inconvenience by a small percentage of the public
b. Requires significant Municipal wide communication and lag time to implement
2.4 Effective August 1, 2023, the acceptance of cash will be discontinued at the following
locations:
a. Municipal Administrative Center
b. Animal Shelter
c. By-law Office
d. All Fire Stations
2.5 If property owners still prefer to use cash, they can pay their taxes through their financial
institution.
2.6 During the first quarter of 2024, the acceptance of cash will be discontinued at all
Recreational Facilities.
Municipal Comparators
2.8 Municipalities such Vaughan and Leamington are cashless. Mississauga only accepts
cash at Community Centers and Municipalities like Brampton, and Markham have a
limited scope of services that accept cash. A scan of other municipalities indicates that
there is growing interest in moving towards digital payment options and away from cash.
The City of Pickering does not accept cash for most of its services, including several
programs at recreation facilities, but still accepts cash for some smaller value programs
(e.g., drop -in skating, shinny hockey).
3. Transaction Fees and Digital Solutions
3.1 In 2009, as part of Report CAO-004-09 Clarington Council passed Resolution
#C-471-09, eliminating credit card payments with the exception of Community Services
and online payment making it a Council policy. The policy was one of many initiatives to
balance the 2009 budget shortfall and actions to bring in the 2010 budget with minimal
impact on the taxpayers.
3.2 Municipalities have been able to avoid transaction fees through a pass -along method,
by allowing the user to pay through a 3rd party provider, who charges the transaction fee
directly to the user.
3.3 There is an immediate opportunity to utilize a third -party provider, which can facilitate
tax payments by credit card online. This is utilized in other municipalities such as, Ajax
and Mississauga. The transaction fee is covered by the user through the third -party
provider. Leaving no financial impact on the Municipality.
Municipality of Clarington
Report CAO-010-23
Page 4
3.4 It is expected that user adoption of online service offerings and digital payments will
continue to trend upward into the future. For example, in 2022 11 % of revenue came in
through the eServices Online Portal.
3.5 To provide quicker service at customer service counters, reduce lineups, and offer an
alternate ability for payment this policy should be repealed to allow acceptance of credit
card payments (with the exception of tax payments).
4. Financial Considerations
Budget savings
4.1 Savings from the armoured car contract are expected to be $20,000 annually. This will
be reduced in 2023 and eliminated by 2024.
4.2 When transaction fees are incurred due to the use of a 3rd party provider, the
Municipality incurs the cost. This financial impact is sizable. For example, the
Municipality paid approximately $33,000 in transaction fees to facilitate online payments
through our web portal in 2022.
4.3 Staff in the Community Services Department will be exploring the feasibility to pass
along processing fees that are currently incurred in the use of the ActiveNet software,
which facilitates the booking of programs and other services. It is expected that savings
could begin to be captured in the first quarter of 2024 as the department moves towards
a cashless approach.
Productivity Savings
4.4 Eliminating cash will reduce time spent on administrative functions for cash balancing,
preparing cash deposits, coin exchange, and other related tasks. It is assumed that
Revenue Clerks, who accept tax payments (accounting for roughly 75% of cash
transactions), currently spend 5 minutes on average per cash transaction. This would
account for roughly 65 hours spent on this process in 2022. There is additional time
spent on counting totals in the tills, which accounts for roughly 1 hour per week,
accounting for an additional 52 hours per year. This totals an approximate productivity
savings of $4,062, which could be redirected to other service delivery.
4.5 The total amount of cash transactions across other departments, not including
Community Services, is comparable to above, with lower average transaction accounts.
Staff responsible for payment collection, inclusive of balancing their tills, spend roughly
30 minutes per week on these cash related activities. Based on cash intake locations
(Planning and Development, Clerk's, Animal Services, By-law, Emergency and Fire
Services), this would account for a minimum productivity savings of $6,425 per year.
Municipality of Clarington
Report CAO-010-23
Page 5
4.6 There is also savings by way of the Finance Clerk II supporting departments with coin
exchange accounting for roughly one hour per week and an additional hour on
preparing cash deposits. On an annual basis this would account for 104 hours per year,
with a productivity savings of $3,403.
5. Communications and Engagement Considerations
Implementation Timeline
5.1 Staff have developed a communication plan which will be utilized to generate
awareness of the modification to payment services commencing in May 2023.
5.2 Staff recommend no change prior to the first installment due date of the Final Tax Bill to
ensure that taxpayers are given the ability to make a payment and receive ample
notification in advance of the firm September date. Tax staff at the MAC counters will be
able to provide in -person education about pre -authorized payment plans and other
alternatives to cash payments when interacting with residents during the first due date
cycle.
5.3 Staff will include communication in the May 2023 mail -out notification to taxpayers of the
pending change in payment options, including alternatives to cash such as
preauthorized payment plans, online banking, in -branch banking, and others.
5.4 Staff will connect with local bank branches to communicate the changes in advance to
ensure they are educated on our process and the options available.
5.5 The current communications budget will be sufficient to implement the communication
plan for the changes.
5.6 Standard responses will be provided to counter staff for inquiries through all
communication channels, including in person at the Counter.
6. Concurrence
This report has been reviewed by the Deputy CAO/Treasurer who concurs with the
recommendations.
7. Conclusion
It is respectfully recommended that Council discontinue the acceptance of cash for
municipal service with staggered implementation dates.
Municipality of Clarington
Report CAO-010-23
Page 6
As part of the implementation, staff will rely on a comprehensive communications plan,
inclusive of public education components, to be rolled out through the remainder of the
year.
Staff Contact: Samantha Gray, Project Manager, Strategic Initiatives, 905-623-3379,
sgray@clarington.net
Attachments:
Attachment 1: Shortfall Remediation Policy and Appendix 3 to Report CAO-004-09 (Program
Cancellation)
Interested Parties:
Attachment 1 to Report CAO-010-23
Council -Approved Policy airily]
10019
Policy Title:
Policy #:
Report #:
Resolution:
Effective Date:
Note:
1. Purpose:
Shortfall Remediation Policy
CAO-004-09
C-471-09
August 31, 2009
Only applied to 2009 Budget
In order to avoid a budget shortfall which municipal government is prohibited from
doing, this policy provides remedial measures.
2. Resolution:
Resolution #C-471-09 (August 31, 2009)
That Report CAO-004-09 be received;
That the budget shortfall remedial measures as contained in Appendix 2, 3, 4, 5, 6 And
7 to Report CAO-004-09 be approved and be deemed to be the policy direction of
Council superseding all previous Council policies related thereto;
That the projected cash flow shortfall from 2009 Development Charges collection
Applied to debenture debt repayments pertaining to Indoor Recreation facilities be
Interim financed with:
A. $200,000 from Municipal Capital Works Reserve Fund, and
B. Approximately $250,000 from interest payments from Veridian Promissory
Notes to be adjusted proportionately based on the actual shortfall at year End
2009.
That the projected cash flow shortfall from 2009 Development Charges collections
Applied to debenture debt repayments pertaining to Library facilities be interim
Financed with $200,000 from the Municipal Capital Works Reserve Fund and
Approximately $225,000 from the Library Capital Reserve Fund to be adjusted
Proportionately based on the actual shortfall at year end 2009;
That appropriate interest be applied and charged to the Development Charges
Reserve Funds requiring interim financing;
Page 1 of 3
Council -Approved Policy �10019
That any projected shortfalls in the Development Charges for both Indoor Recreation
And Library Reserve Funds for 2010 requiring debenture debt repayment be interim;
Financed from the balances in the other Development Charges Reserve Funds with
Appropriate interest applied; and
That, to the extent possible, it is the express intent of Council to recover interim
Financing of development charges debenture debt repayments from future
Development charges collections.
That Appendix # 2 to Report CAO-004-09 be amended by deleting Item #7 and
Replacing it with the following:
"That the Chief Administrative Officer be directed to negotiate with the Board Of
Directors of the Clarington Board of Trade to investigate staffing the tourism
Office and keeping the centre open".
That Appendix # 2 to Report CAO-004-09 be amended by deleting Item #4 - Service
Category of Animal Services.
That Item #1 of Appendix # 3 to Report CAO-004-09 — Program Specifics — Staff
Recognition/Long Term Service Program and Staff Appreciation be amended as
Follows:
"Whereas the Mayor and Council wish to continue to recognize the Employee
Service Award Program;
Therefore Be It Resolved That the Chief Administrative Officer and Directors be
directed to create a proper and special presentation event prior to November 1,
2009, for Council's approval, at a maximum cost of $5000."
That Appendix # 4 to Report CAO-004-09 - Staffing Adjustments be amended as
Follows:
"Whereas the President of CUPE Union has approached the Mayor and
Councillors expressing concerns with respect to three full-time employees to be
Laid off;
Page 2of3
Council -Approved Policy Ciffingon
Now Therefore Be It Resolved That the Chief Administrative Officer Be
authorized to meet with the CUPE and Fire Association Presidents to Explore
the opportunities that the employees are prepared to assist in the cost Cutting
exercise;
That the Chief Administrative Officer review with the department Directors, the
Proposed non -bargaining staffing as outlined in Report CAO-004-09;
That the Chief Administrative Officer report back to Council the results of the
Staffing position review;
That the working notice provided to all part-time employees be extended; and
That the Chief Administrative Officer report back at the next regular Council
Meeting."
Page 3 of 3
APPENDIX 3 TO REPORT CAO-004-09
PROGRAM CANCELLATION
ITEM
NO. DEPARTMENT PROGRAM SPECIFICS EXPLANATION
2009 SAVINGS
1 Corporate Wide Staff Recognition/Long Programs suspended
25,1
Term Service Program
and Staff Appreciation
2 Operations Senior Sidewalk Clearing Program cancelled. Partial saving of $20,000. out of a total
20,(
program cost of approximately $85,000.
3 Operations Special Events service to Eliminate after hours and weekend service to save overtime.
Community Groups The Municipality currently subsidizes various community groups 5,000
by providing free service to setup and clean up mostly on
weekends. Annual cost of approximately $45,000.
4
Corporate
Services
Holiday Train
Cancel
Hold presentation at Council or in chambers instead of a separate
venue
Save bank charges by eliminating credit card payment method with
the exception of Community Services Department and online
payment
Reduce aquatic programs at CCC, NDRC and CFC
Cancel
Reduce/condense classes
Scale back Hall of Fame evening event
4,000
1 000
'
5
Corporate
Services
Clarington Blooms
6
Finance
Credit Card Payments
5,000
20,500
7
Community
Services
Aquatic Programs
8
Community
Services
Child Supervision service at
CCC
6,700
9
Community
Services
Group Fitness Classes at
CCC
1,200
5,000
10
Community
Services 1
Hall of Fame