It will cost more to pay Modesto city bills with debit or credit cards

You may soon want to think twice before using the plastic cards in your wallet to pay for many city of Modesto services.

The City Council on Tuesday approved imposing a 2.4 percent service fee on customers who use debit and credit cards to pay for all city services except utilities bills, parking charges, and monthly passes and ticket books for city buses and Dial-A-Ride.

The service fee takes effect Sept. 1.

City officials say this lets them recover what credit card companies charge Modesto when customers pay with plastic, and the city will not make any money from the fee. The action the council took Tuesday is expected to save Modesto more than $100,000 annually.

The council vote was 6-1 with Councilman Bill Zoslocki voting no. He also wanted to exempt golf from the 2.4 percent service fee but did not have the support of the other council members. The city’s golf courses have struggled attracting golfers, but Councilwoman Jenny Kenoyer said if someone can afford to play golf they can afford the service fee.

Council members exempted the purchase of monthly passes and ticket books for public transit because they did not want to place an additional burden on those customers.

But Modesto may not be done charging a fee. Staff is expected to report back to the council in late September with a proposal to impose what the city is calling a convenience fee for those who use debit or credit to pay utilities bills. The convenience fee for utilities has to be a fixed amount, and Modesto is looking at a roughly $3 fee. The council could impose the 2.4 percent service fee for parking charges at a later date.

Imposing fees on all city services – except monthly passes and ticket books for public transit – would save Modesto more than $500,000 annually. Utilities payments account for roughly 70 percent of the city’s annual fees.

The council was expected to consider several other major items Tuesday, including a proposed land swap with Stanislaus Food Products, accepting a master plan laying out how Modesto could establish its own fiber optic network for super-fast internet service, and paying the Modesto Irrigation District $1.2 million annually for using its canals to dispose of storm water.

But the three items were removed from the meeting agenda because council members had questions about them. None of the items were vetted first at one of the council’s committees before coming to the full council.

This story was originally published July 12, 2017 at 3:10 PM with the headline "It will cost more to pay Modesto city bills with debit or credit cards."