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BACKGROUND In FY 2020/21 city paid $356,614 in various credit card fees on revenue collected for City programs, fees, and utility bills.These charges reduce resources that can be available for other purposes. Every credit card usage generates a series of transactions that includes several parties. Credit card companies like Visa, Mastercard, American Express and Discover(credit card networks)allow issuing banks and businesses a use of their product by charging a fee against the use of funds.The issuers, in turn, pass on that charge to merchants that provide customers the ability to pay with a credit card. The "for-profit" merchant typically passes on these charges to the customer as part of the overhead or markup on products and services. Entities that are non-profit or government have two choices in terms of recovering these charges. Some agencies, as is the City's current practice, absorb these costs and pay out of their general or other related funds. However,other agencies assess a surcharge or convenience fee.This surcharge is normally charged as a separate transaction, along with the payment being made by the citizen for the cost of service being paid for by the credit card. Since the transaction is done separately from the payment for service, it is transparent and trackable. It also allows the citizen to choose not to use the credit card and avoid paying the additional charge. Unlike the"for-profit" merchants, where the customer is typically unaware and does not have a choice to avoid such charges, the citizens agree to pay the convenience surcharge and are also aware of the exact amount being charged.These charges are typical in almost all federal and state charges for service when using credit cards. While City of Pleasanton has not passed on this cost to its customers in the past, because of the large cost to the City and the increasingly widespread practice by other govern ment entities, staff recommends establishing a credit card convenience surcharge. DISCUSSION The City provides several options for citizens to use when making payments for services received by the City. While most payments are made by check,we receive a sign ificant amount of credit card payments. Table 1 shows six-month data for credit card payments in 2021 (Jan uary th rough June.)This data indicates a monthly average of $733,000 is received as credit card payment for just Utility Bills alone, causing the City to pay an average of over $18,000 in extra charges per month to the credit card companies. Page 2 of 3