Modesto may charge customers who use debit, credit cards to pay city bills

You may want to keep the plastic in your wallet and use cash or a check when paying your city utilities bill or for a building permit and other city services.

Modesto is considering charging customers who use credit and debit cards the fee it is charged by the company that processes those payments for the city. City officials say Modesto will recoup its costs and not make money on the transactions.

The city also is looking at raising parking fees but received pushback over that.

A city report on the credit and debit card fees says Modesto expects to pay $525,203 in fees in its current budget, which ends June 30, on transactions worth nearly $50.2 million. That works out to an average fee of about 1 percent.

But the fees would vary based on the types of transactions and could be as much as 3 percent, according to the report. Some fees could be steep. The report said the average fee for developer and building permit fees could be as much as $15,000 per transaction.

There would be no fee for paying by cash or check.

Modesto officials gave a presentation on this at the City Council’s Effective Government Committee budget hearing Wednesday as part of the city’s proposed 2017-18 budget, which starts July 1.

The committee forwarded the proposed budget — which includes charging customers who use debit and credit cards — to the full council for adoption in June.

Acting Finance Director DeAnna Christiansen said if the council approves the fees as part of the new budget the city would give customers 30 days notice before implementing them, which could happen as early as August.

The committee tabled for further discussion proposals to increase what Modesto charges for parking at its three parking garages and several parking lots in downtown from $1 to $1.25 an hour and to raise fees at the Modesto Airport.

Downtown Modesto Partnership CEO Josh Bridegroom challenged the parking proposal and said he was surprised the city’s parking staff failed to tell the committee that they are working with the partnership on a parking study. He added the city failed to notify him and other downtown interests about Wednesday’s discussion.

“None of us knew this was happening today,” Bridegroom said.

He said the study should be completed soon and will provide a comprehensive look at all of downtown parking. He said that’s the approach the city needs to take if it want to successfully manage its parking and help downtown thrive.

Acting City Manager Joe Lopez said Modesto is not trying to make money by raising parking fees but to pay for repairs to its crumbling parking infrastructure.

The proposed fee increase also would offset the parking revenue Modesto lost when it reduced evening parking fees last year from a flat fee of $5 to $1 an hour in response to a Downtown Modesto Partnership request to encourage visitors to come downtown.

This story was originally published May 29, 2017 at 1:12 PM with the headline "Modesto may charge customers who use debit, credit cards to pay city bills."