REQUEST FOR CITY COUNCIL AND
CORONA UTILITY AUTHORITY ACTION
DATE: 01/03/2023
TO: Honorable Mayor and City Council Members
Honorable President and Board Members
FROM: Utilities Department
SUBJECT:
Title
AMENDMENT NO. 1 TO THE MASTER SERVICES AGREEMENT WITH PAYMENTUS CORPORATION FOR ELECTRONIC PROCESSING OF UTILITY PAYMENTS
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EXECUTIVE SUMMARY:
This staff report asks the City Council to approve the First Amendment to the Master Services Agreement with Paymentus Corporation to extend the agreement through June 30, 2027. The Utilities Department processes utility customer payments for approximately 45,000 customer accounts of which 65% or more are processed electronically through various payment methods via Paymentus Corporation.]
RECOMMENDED ACTION:
Recommended action
That the City Council:
a. Approve and authorize the City Manager, or his designee, to execute Amendment No. 1 to the Master Services Agreement with Paymentus Corporation to extend the term of the contract through June 30, 2027, in the amount of $500,000 per fiscal year for Fiscal Years 2025 through 2027.
b. Authorize the City Manager, or his designee, to negotiate and execute non-substantive extensions, purchase orders, change orders, and amendments up to the amount authorized by Corona Municipal Code Section 3.08.060(J), which is equivalent to 10% or $50,000.
c. Decide under Corona Municipal Code Section 3.08.140(E) that competitive bidding has been satisfied for the reasons provided in the “Basis of Determination that Purpose of Bidding is Otherwise Accomplished” section of this report.
That the Corona Utility Authority review, ratify, and to the extent necessary, direct that the City Council take the above actions.
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BACKGROUND & HISTORY:
More than 65% of the payments collected by the Utilities Department (UD) are processed electronically via Paymentus Corporation (Paymentus). The UD transitioned to using Paymentus’ services in 2013 with the launch of the online payment portal iLink and expanded Paymentus’ services by adding the Interactive Voice Response (IVR) system in 2014. In April 2016, the City Council approved a Master Services Agreement (Agreement) with Paymentus for an initial 3-year term which ended on April 5, 2019. At the end of the initial term, the Agreement automatically renews for successive one-year periods, unless either party provides written notice no less than six months before such renewal date to not automatically renew the term of this Agreement. Per Corona Municipal Code (CMC) Section 3.08.060(K), there is a six-year term limitation on general service contracts and extensions unless specifically approved by City Council action. This term limitation expired on April 5, 2022.
On November 3, 2021, the UD requested City Council approval for an updated Master Services Agreement with Paymentus for electronic processing of utility payments. The “initial term” of this updated master services agreement ended on June 30, 2023. Since terms and pricing were kept unchanged, staff requested City Council authorization on June 21, 2023, for a one-year extension through June 30, 2024.
ANALYSIS:
The UD processes utility customer payments for more than 45,000 accounts. UD offers a variety of ways in which utility customers can make their payments, including:
Processed through Paymentus:
• Online through UD’s website - iLink Payment Portal
• Automatic Bill Pay Program (AutoPay)
• By phone with a Customer Care Specialist or via the IVR system
• In-person at the UD Public Counter (Credit Card or Debit only)
Processed through other vendors:
• Check or Cash payments at the UD Public Counter
• At the drop box located at City Hall Parking Lot
• By mail
• PayNearMe at 7-Eleven locations
• Western Union
• Through customer’s bank’s bill pay
In addition to being a reliable electronic payment processor, Paymentus’ services include interfacing with the Utility Billing system which allows real-time payment posting, meets Payment Card Industry Data Security Standard (PCI DSS) “Level 1” compliance, marketing support to accelerate adoption of UD’s payment channels, customer support, and an IVR system. These are all-inclusive within their per-transaction rates for the different types of payments processed as listed in the Master Services Agreement Schedule A - Paymentus Service Fee Schedule. Paymentus now offers additional payment methods such as Amazon Pay, PayPal, PayPal Credit, and Venmo, allowing the UD to offer more convenient and flexible ways for customers to make their utility payments.
The UD spends approximately $450,000 in transaction fees annually with Paymentus. The amount authorized for Paymentus’ Purchase Order (PO) for Fiscal Year (FY) 2024 is up to $500,000 annually. The UD recommends authorization for Paymentus’ PO to be issued for $500,000 annually through Fiscal Year 2027 with the ability to process a change order as authorized by CMC Section 3.08.060(J) to ensure there is sufficient room to accommodate growth in the number of accounts and transactions as well as customer’s preference in the method of payments. The UD is currently implementing a new customer portal that offers easier self-services for customers to make their payments and anticipates an increase in online payments in the next three years. Paymentus has included $2,500 in future implementation credit to be used towards new solutions like the customer portal, Scan to Pay, and other implementation needs.
Basis For Exception to Competitive Bidding:
Staff believes that an exception to competitive bidding is warranted for this purchase pursuant to CMC Section 3.08.140(E), which states as follows:
“Purpose of bidding is otherwise accomplished. When the purchasing agent and the authorized contracting party, with the approval of the City Manager, determine that it is in the best interest of the city and its administrative operations to dispense with public bidding for non-public projects under this chapter.”
The UD recommends dispensing from bidding this service and requests approving Amendment No. 1 to Paymentus’ Master Services Agreement through June 30, 2027. In 2016, the City awarded a contract to Paymentus based on the competitive process of another agency. Since then, Paymentus improved those rates and has agreed to maintain the same rates from 2021 through the end of June 30, 2027. Also, it is in the City’s best interest to dispense from bidding while UD completes the Advanced Metering Infrastructure meter replacement project, an update of its Advanced CIS billing system to version 5, and the replacement of its Customer Payment Portal. This will allow the UD to fully implement the new Utility Billing System and Customer Payment Portal before preparing a Request for Proposal (RFP) for a payment processing merchant that meets the needs and functionality of those systems.
FINANCIAL IMPACT:
Funding for the recommended action will be included in the proposed Fiscal Year 2025 Utilities Department’s Operating Budget in the Water Utility Fund (570), the Sewer Utility Fund (572), and the Greenfield Electric Utility Fund (578). Future fiscal years will be requested through the annual budget process.
ENVIRONMENTAL ANALYSIS:
This action is exempt pursuant to Section 15061(b)(3) of the Guidelines for the California Environmental Quality Act (CEQA), which states that a project is exempt from CEQA if the activity is covered by the commonsense exemption that CEQA applies only to projects that have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. By amending the Master Services Agreement with Paymentus, there is no possibility that approving this amendment will have a significant effect on the environment. Therefore, no environmental analysis is required.
PREPARED BY: JACQUELINE ZUKERAN, UTILITY BILLING AND ADMINISTRATION MANAGER
REVIEWED BY: TOM MOODY, DIRECTOR OF UTILITIES
Attachments:
1. Exhibit 1 - Paymentus Master Services Agreement
2. Exhibit 2 - Amendment No. 1 to Master Services Agreement