City Passes on Credit Card Fees to Utility Customers

3 years 10 months 2 days ago September 17, 2013 Sep 17, 2013 Tuesday, September 17 2013 Tuesday, September 17, 2013 1:52:00 PM CDT in News
By: Eric Hilt, KOMU 8 Reporter
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COLUMBIA - Columbia utility customers will notice a new fee on their next bill if they pay their utilities with their credit card. Starting this week, the city is passing the $4.60 credit card processing fee on to consumers, instead of footing the fee itself like it has in the past.

"It covers in essence the cost of using their software, the third party provider plus covering their cost of doing business," Assistant Finance Director Lynn Cannon said.

Customers said they thought the extra fee was ridiculous and the city should continue to cover the cost of credit card fees.

"Why would you charge extra if you're already charging for utilities? Why would you charge people extra just to use their own money to pay an easier way for their utilities?" said Columbia resident Kara Harvey.

Last year the city paid more than $450,000 in credit card fees, $177,000 more than it paid in 2010. Cannon said the city can't keep up with rising costs without passing it on to consumers. 

The fee is added onto Columbia's already higher-than-average utility fees. Columbia's utility rate is 9.44 cents per kilowatt-hour for the first 750 kilowatt-hours and 10.88 cents per kilowatt-hour for everything after that. To put that in perspective, the average utility rate in Missouri is 8.32 center per kilowatt-hour and the national average is 9.90 center per kilowatt-hour, both less than Columbia's rate.

Cannon said the additional fee will help save Columbia Public Works money, as well as ensure the utility rates are kept as low as possible.

"There could be a potential that it could cause a rate increase down the road, so those people that are paying via credit card are impacting the rate for the individual who is not paying via credit card," Cannon said.

Cannon said she's unsure the impact the extra fee will have on customers. She said she expects more people to pay in person, but doesn't anticipate the need to pay more workers or for overtime.

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