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Agenda Item
ASR
Control 24-000652 |
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MEETING
DATE: |
08/13/24 |
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legal entity taking action: |
Board
of Supervisors |
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board of supervisors district(s): |
All
Districts |
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SUBMITTING Agency/Department: |
Treasurer-Tax
Collector (Approved) |
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Department contact person(s): |
Shari
L. Freidenrich (714) 834-7625 |
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Jun
Intal (714) 834-7288 |
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Subject: Amend and Extend Contracts for
Wells Fargo Electronic Payments and Gateway
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ceo CONCUR |
County Counsel Review |
Clerk of the Board |
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Concur |
Approved
Agreement to Form |
Discussion |
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3
Votes Board Majority |
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Budgeted: Yes |
Current Year
Cost: $4,285,000 |
Annual Cost: FY 2024-25 $325,000 |
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Staffing Impact: |
No |
# of Positions: |
Sole Source: Yes |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 8/8/2023 #15, 8/10/2021 #9, 8/13/2019 #10,
6/5/2018 #13 |
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RECOMMENDED
ACTION(S):
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1.
Authorize the County Procurement Officer or Deputized designee to
execute Tenth Amendment with Wells Fargo Merchant Services, L.L.C. and Wells
Fargo Bank, N.A. to amend the contract for electronic payment acceptance and
processing services for non-convenience fee credit and debit cards and eCheck
transactions in an amount not to exceed $4,600,000 for a one-year extension,
commencing on August 14, 2024, through August 13, 2025, for a total
cumulative contract total amount not to exceed $28,000,000. |
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2. Authorize the County Procurement Officer or
Deputized designee to execute Amendment No.11 with Wells Fargo Bank, N.A. to
amend the contract for internet payment gateway services to accept and
process payments via the internet in an amount not to exceed $10,000 for a
one-year extension, commencing on August 14, 2024, through August 13, 2025,
for a revised cumulative contract total amount not to exceed $140,000. |
SUMMARY:
Approval of Amendments and
extension of these contracts will allow the Treasurer-Tax Collector to continue
to accept non-convenience fee credit and debit cards and eCheck payments via
the internet and in person for County Departments' services where using a
percentage of amount processing fee is less expensive than using other vendors
under contract that have processing fees that includes a transaction fee.
BACKGROUND
INFORMATION:
This item is coming to the Board of
Supervisors (Board) in compliance with County Contract Policy Manual (CPM)
section 3.3-102 b) that requires all sole source contracts over $75,000 or a
five (5) year term to obtain Board approval. In addition, this renewal will not
require a new Sole Source approved form as contract has no changes to the scope
or the dollar amount of the contract.
Merchant
Services Program Guide Agreement (Electronic Payment Acceptance and Processing
Services)
The Treasurer uses three providers
for electronic payment acceptance and processing services for credit card,
debit card and eCheck transactions via the internet and in person. They are
Wells Fargo Merchant Services L.L.C., and Wells Fargo Bank, NA (Wells Fargo),
Grant Street Group (GSG) and Elavon’s State of California Master Service
Agreement (MSA). All three provide different pricing structures that allow the
Treasurer to select the lowest processing costs based on each Department’s
dollar volume, average transaction amount and type of payment. These different
pricing structures support the minimizing of payment processing costs to the
County and to the Superior Courts.
Each of these contracts provides
the County the ability to benefit from pricing for those Departments with large
volume transactions, utilizing Elavon, while those Departments with small
volume of transactions benefit from the Wells Fargo pricing structure, hence
the need for multiple offering.
Therefore, the Treasurer requests
the approval of these amendments to provide the lowest cost of processing
credit and debit cards for certain small dollar transactions.
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Payment
Acceptance and Processing Servicers |
FY 2019-20 |
FY 2020-21 |
FY 2021-22 |
FY 2022-23 |
FY 2023-24 |
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Wells Fargo Fees |
$1,378,209 |
$1,175,496 |
$1,782,729 |
$2,029,797 |
$1,868,982 |
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Wells Fargo
Charge Volume |
$50,000,000 |
$46,000,000 |
$66,000,000 |
$72,000,000 |
$81,000,000 |
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Elavon Fees |
$164,906 |
$311,810 |
$379,630 |
$430,142 |
$491,872 |
Payment
Gateway User Agreement (Internet Gateway)
All online electronic payment
services require a gateway to facilitate the transmission of internet payment
information to the bank. The Treasurer currently uses Wells Fargo to process
these internet payment transactions.
Prior
Board Actions
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Board Date |
Amendment # |
Board Action |
Contract Amount |
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8/8/2023 |
Ninth
Amendment |
Approved
one-year extension term, effective August 14, 2023 through August 13, 2024 |
$2,400,000 |
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8/10/2021 |
Eighth Amendment |
Approved
two-year extension term, effective August 14, 2021 through August 13, 2023 |
$4,600,000 |
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8/13/2019 |
Seventh
Amendment |
Approved
two-year extension term, effective August 14, 2019 through August 13, 2021 |
$5,300,000 |
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6/5/2018 |
Sixth Amendment |
Approved one-year
extension term, effective August 14, 2018 through August 13, 2019 |
$2,300,000 |
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7/11/2017 |
Fifth Amendment |
Approved
one-year extension term, effective August 14, 2017 through August 13, 2018 |
$1,900,000 |
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5/24/2016 |
Fourth Amendment |
Approved
one-year renewal term, effective August 14, 2016 through August 13, 2017 |
$2,300,000 |
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7/14/2015 |
Third Amendment |
Approved one-year
renewal term, effective August 14, 2015 through August 13, 2016 |
$1,520,000 |
Extension
Submitted Within 30 Days:
The Treasurer did not meet the
30-day requirement for the item to be timely agendized for Board approval due
to continued negotiations with the Contractor to finalize terms and pricing.
Currently, no increases in costs are being proposed in these two contracts.
Contractor
Performance Evaluation:
The Contractor’s performance has
been confirmed as satisfactory. The Treasurer has verified there are no
concerns that must be addressed with respect to Contractor’s ownerships/names,
litigation status or conflicts with County interests. The Treasurer has been
satisfied with their services and performance throughout the term of the
contract and recommends that it be renewed. This contract does not currently
include subcontractors or pass through to other providers. See Attachment B and
D for Summary of each Contract. The Orange County Preference Policy is not
applicable to this amendment to renew the Contract.
FINANCIAL IMPACT:
Appropriations for merchant
processing fees in total for all payment processing vendors are included in the
Treasurer-Tax Collector’s Budget Control 074 FY 2024-25 Budget and will be
included in the budgeting process for future years. The Treasurer is fully
reimbursed for the cost of these two contracts by billing monthly for the
electronic payment acceptance and processing services and gateway services
provided to County departments, thereby resulting in no net impact on the
Treasurer’s Net County Cost. The expected service usage for merchant and
gateway services is General Fund: 29 percent, County Non-General Fund: 63
percent and State: 8 percent (Courts). Both contracts allow for termination
without penalty.
FINANCIAL
IMPACT:
Appropriations for merchant
processing fees in total for all payment processing vendors are included in the
Treasurer’s Budget Control 074's FY 2024-25 Budget and will be included in the
budgeting process for future years. The Treasurer is fully reimbursed for the
cost of these two contracts by billing monthly for the electronic payment
acceptance and processing services and gateway services provided to County
departments, thereby resulting in no net impact on the Treasurer’s Net County
Cost. The expected service usage for merchant and gateway services is General
Fund: 29 percent, County Non-General Fund: 63 percent and State: 8 percent (Courts).
Both contracts allow for termination without penalty.
STAFFING
IMPACT:
N/A
ATTACHMENT(S):
Attachment
A - Amendment No. 10 to Contract No. MA-074-13010137
Attachment B - Contract Summary Form MA-074-13010137
Attachment C - Amendment No. 11 to Contract No. MA-074-13010138
Attachment D - Contract Summary Form - MA-074-13010138