Developers who pull permits in the city of Surprise soon will have to pay a processing fee on credit cards.
The Surprise City Council voted 6-1 on May 4 to institute a service charge on all credit card payments for development services.
Previous to the coronavirus pandemic, the city capped its credit card limit at $5,000.
When the pandemic hit, the limit was removed and an online portal was created for the convenience of customers.
But the city was eating service charges for processing credit cards up to half a million dollars in the last year, Finance Director Andrea Davis told the city council.
Still, one councilman, Jack Hastings of District 5, voted against the processing fee.
“I’ll be honest, I’m not a fan of passing this along to somebody else to pay for, personally,” Mr. Hastings said.
However, without the fee, taxpayers would be paying the service charges the city is assessed.
“It carries out something council has always asked us, which is for development to pay for itself,” Community Development Director Chris Boyd told the council. “The fee is being paid for by the developers, by the builders and not by the taxpayers.
“I think that’s important to keep in mind that we’re relieving the taxpayers in this and passing it on to the people who are actually directly benefitting from the permit itself.”
Mayor Skip Hall alluded to that point in his reasoning for voting for the service charge.
“The credit card fees are part of development,” Mayor Hall said. “That’s not the taxpayer’s issue. It’s the developer’s issue.”
Mr. Hastings wasn’t convinced.
“It sounds like we’re coming to the rescue by adding this fee and we’re coming in and saving the day,” Mr. Hastings said. “But at the end of the day it’s still another fee.”
The fee is only for credit card payments. Those paying with cash and by check will not be assessed one.
Ms. Davis said the fee would have been implemented anyway with the installation of new software Development Services is using to provide electronic permits.
“It’s the cost of doing business,” Ms. Davis said, adding, “It’s definitely something our customers wanted.”
Ms. Davis said the city typically spends about $100,000 a year just in bank processing fees but since opening open the online payments with COVID, that cost has increased to about $400,000 to $500,000.
“It’s definitely significant,” Ms. Davis said.
Fees charged for the credit card use will be percentage-based on the amount charged.
“I’m glad that you guys are going to do it and it’s super convenient for the community that uses this service,” District 2 City Councilwoman Aly Cline said. “They don’t have to write a check and drive over here, which could cost them more than the fee at this point in gas.”
Ms. Davis said the city is only looking to cover its costs for the fees its charged.
“Coming from the financial industry business, which is my background, this is actually a very low fee,” Ms. Cline said, adding she believes most businesses don’t want to pay with cash and check and perfer using credit cards to gain cash back points or other bonuses for their businesses.
Jason Stone can be reached at email@example.com.