Agenda Item   

AGENDA STAFF REPORT

 

                                                                                                                        ASR Control  21-000385

 

MEETING DATE:

05/25/21

legal entity taking action:

Board of Supervisors

board of supervisors district(s):

All Districts

SUBMITTING Agency/Department:

Treasurer-Tax Collector   (Approved)

Department contact person(s):

Shari L. Freidenrich (714) 834-7625 

 

 

Monica Varela (714) 834-4170

 

 

Subject:  Extend and Amend Payment Processing Agreement with Elavon, Inc.

 

      ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Agreement to Form

Discussion

 

 

3 Votes Board Majority

 

 

 

    Budgeted: Yes

Current Year Cost: $220,833

Annual Cost: FY 2021-22 $2,650,000
FY 2022-23 $2,429,167

 

 

 

    Staffing Impact:

No

# of Positions:

Sole Source: No

    Current Fiscal Year Revenue: N/A

  Funding Source: See Financial Impact Section

County Audit in last 3 years: No

 

 

    Prior Board Action: 05/21/2019 #22, 04/24/2018 #26, 05/23/2017 #37, 03/06/2012 #7

 

RECOMMENDED ACTION(S):

 

Authorize the County Procurement Officer or authorized Deputy to execute Amendment No. 6 to renew and amend Agreement with Elavon, Inc. for electronic payment merchant processing services in an amount not-to-exceed $5,300,000 commencing June 1, 2021, through May 31, 2023, for a revised cumulative agreement total amount not-to-exceed $14,105,000.

 

 

 

SUMMARY:

 

Extending and amending the merchant processing agreement will allow customers and taxpayers to pay using credit and debit cards for County services.

 

 

 

BACKGROUND INFORMATION:

 

The Treasurer-Tax Collector (Treasurer) offers multiple options for processing credit and debit card transactions in-person and online. Since 2012, one of those options has been through Elavon, Inc. (Elavon), which also provides credit card terminals for in-person transactions and provides virtual terminals and payment gateways for Internet payments. Elavon was originally chosen from the State of California (State) Master Service Agreement (MSA) list, which has contracts that are competitively bid by the State Department of General Services and are available to any agency that receives public funds. These types of agreements establish a pre-qualified list of vendors and simplify the purchasing process for the end user, by utilizing fair and reasonable pricing for the function to be provided. Moreover, by choosing Elavon from the MSA list, the County receives the State volume pricing. 

 

Elavon, Inc. Merchant Processing Services:

State MSA Extension – Elavon, Inc. Agreement:

In 2021, the State added a 12-month extension with Elavon to May 31, 2022. The State is still in the process of issuing a new Request for Proposal for electronic payment processing services. Therefore, the Treasurer is requesting the one-year extension, plus an additional one-year extension beyond the MSA expiration date as allowed under the State’s Agreement Terms consistent with the State MSA language. The Treasurer uses three providers of these services to be able to offer County Departments the lowest rate based on their average transaction amount and/or based on the use of a service fee for services such as property tax payments.

 

Currently, only the State's Superior Courts (Courts) and OC Waste & Recycling are using the Elavon option to process credit and debit card payments. The Treasurer is continually evaluating whether other County Departments would be able to lower their individual transaction processing costs by switching to this provider. As average transaction amounts increase over $45 to $50, the contract with Elavon generally provides for lower individual transaction costs than other approved County merchant processors, which would then provide additional individual transaction processing contract savings to the County Departments. Therefore, the current estimated contract expenditures have been increased to allow for these additional expenditures if all the individual transaction credit card processing, except for property tax payments, were moved to Elavon during this contract period. At the same time, if this change in merchant processors were to occur, the expenditures in other merchant processors would decrease as the processing would be switched to the Elavon contract. During Fiscal Years 2014-15, 2015-16, 2016-17 and 2017-18, Elavon processed 240,000, 229,000, 229,000 and 122,000 transactions, respectively, totaling $30 million, $27.4 million, $27.3 million and $22.1 million, respectively. All merchant processing fees are reimbursed by the Department or Agency to the Treasurer.

 

Contractor Performance Evaluation for Elavon, Inc. Agreement:

The Contractor’s performance has been confirmed as at least satisfactory. The Treasurer has verified that there are no concerns that must be addressed with respect to the Contractor’s ownership/name, litigation status or conflicts with County interests. The Treasurer recommends that the Agreement be amended and extended. This Agreement includes subcontractors. See Attachment D for information regarding subcontractors and Contract Summary Form.

 

Prior Board of Supervisor's (Board) Actions - for Elavon:

 

Board Date

Board Action

05/21/2019 #22

Authorized Amendment No. 5 to renew Agreement MA-074-12011056

04/24/2018 #26

Authorized Amendment No. 4 to renew Agreement MA-074-12011056

05/23/2017 #37

Authorized Amendment No. 3 to renew Agreement MA-074-12011056

03/06/2012 #7

Approved Agreement No. MA-074-12011056 

 

The Treasurer did not meet the 30-day requirement for the items to be timely agendized for Board approval as the State has not finalized the amendment to the State Master Contract expiring May 31, 2021. The State has notified Treasurer that the signed amendment will be issued only when it is finalized, but based on prior experience, it may not be available until after May 31, 2021, which is after this Board meeting.

 

 

 

FINANCIAL IMPACT:

 

Appropriations for Merchant Services costs are included in the Treasurer’s FY 2020-21 Budget as Budget Control 100-074-074-1100-1913 and will be included in the budgeting process for future fiscal years. The Treasurer is fully reimbursed for the cost of this Agreement by billing monthly for these payment processing services provided to the County Departments, Agencies and Courts, thereby resulting in no net impact on the Treasurer’s Net County Cost. This Agreement allows for termination of the Agreements without penalty within a 90-day period

 

 

 

STAFFING IMPACT:

 

N/A

 

ATTACHMENT(S):

 

Attachment A - Amendment No. Six to MA-074-12011056
Attachment B - Amendment No. Six to MA-074-12011056 - Redlined
Attachment C- Contract Summary Form