Starting June 1, all Palm Coast customers paying their utility bills by credit or debit card–67 percent of customers last year–will see their bills increase by $1.95 per month, or 3.5 percent if they pay in person. Payments by electronic checks will cost 43 cents per transaction.
The Palm Coast City Council in February, overriding its finance director’s recommendation, unanimously approved changing the payment model to pass those costs on to customers. Until now, the city was absorbing $700,000 worth of such fees a year ($728,000 in the past year).
Customers may still avoid paying the new transaction fees if they pay bills by check (by mail or in person) or in cash, in person. The new model is similar to that of Flagler Beach. Ormond Beach still absorbs transaction fees.
While customers are used to paying transaction fees for most of the services they pay for, the timing of the city’s new transaction costs may create an additional if temporary headache for the council: the fees are in addition to the 36 percent utility rate increase over the next 30 months that the council approved two weeks after approving the new transaction fees. The rate increase kicked in last month.
Utility bills include water, sewer, garbage and stormwater fees. A household paying $200 a month will see an additional $1.95 per month, or $23 per year, for the transaction fee, unless the 2.45 percent fee applies, which would then raise the monthly transaction cost to $4.90, or $59 for the year.
Until this year, only building department fees were passed on to customers. All other transaction fees were absorbed by the city. The city’s golf club and its tennis club also started passing transaction fees on to customers this year.
Utilities, stormwater and garbage accounts are run as “enterprise funds,” meaning that they are self-sustaining and fee-based, rather than tax-supported. But business tax recipes and code enforcement fines will also be subject to transaction fees from now on.
“I don’t think that everything should be run like a business,” Council member Theresa Pontieri said. “I don’t think Parks and Rec should be run like a business in the city. But I do think that the enterprise funds should be so in my estimation. User fees like this should be passed on to the user for an enterprise fund” like the utility and stormwater fund.
“I agree that the enterprise prize fund should be like that as well as at a minimum, I think code should be that way,” Council member Ty Miller said, “I don’t see any world that the city should be absorbing costs associated with code violations.”
The change in policy was part of the city’s approval in February of new contracts with Paymentus and Tyler Technologies, the two companies that process electronic payments for the city’s customers. So far this year, the city has paid its payment-processing companies $639,000.
City Finance Director Helena Alves asked the council whether it wanted to continue along the same model–absorbing the fees rather than passing them on. “We would propose to maintain the same type of arrangement unless you wanted to change it,” Alves told the council.
Alves had spoken about the options with the city’s rate consultant, who recommended against adding another layer between the customer and the city–that layer being the processing fee. “Do I want to pay the fee, or do I want to process by check?” Alves said, imagining a customer’s thinking, when faced with new fees, and knowing that the majority of customers pay by credit card, remotely. “You already have your account set up, you have your credit card in, and there only seems to be an interruption in that bill-to-payment when your credit card is set to expire and you have to go in and renew it, versus you’re adding another decision point.”
Miller said customers face decision points innumerable times, and still have the option to avoid fees. And there’s no question that the city would save considerable sums.
“The savings to the city would be approximately $700,000 because that’s what costs to process our payments. That would be a fee that you would pass on to your users,” Alves said. But she also said something that appeared not to register with council members: the costs the city was absorbing were already built into the rates currently paid by the residents. “Same as if you’re walking in paying by cash,” Alves said. “Those costs are calculated into the rates that are paid by the residents.”
In other words, the current rates reflect the cost of the transaction fees, but now that the city will no longer bear that cost, it will, in effect, realize an additional windfall.
The amended master service agreement with Tyler Technologies “will allow customers to see real-time payments through the customer portal and allow the city to upgrade the cashiering software with minimal budget impacts,” a memo to the council stated. “The new master services agreement with Paymentus will allow the City to utilize some of the new features such as real-time lockbox payments, scan-to-pay at local retailers, and allow customer[s] to keep their current Utility customer portal.”
On Thursday, the city issued the following breakdown of how fees will and will not apply, starting June 1.
Fee Structure Effective June 1, 2025:
In-Person Payments:
- Customer Service payments made by credit/debit card: 3.5% processing fee (minimum fee: $2.50)
- Community Development payments made by credit/debit card or digital wallet: 2.45% processing fee (
minimum fee: $2.50)
Online Payments:
- Utility Bills (credit/debit/digital wallet): $1.95 per transaction
- Utility Bills (ACH/eCheck): $0.43 per transaction
- All other non-utility payments (credit/debit/digital wallet): 2.45% processing fee
- All other non-utility payments (ACH/eCheck): $0.43 per transaction
Transaction Limits:
- Maximum online payment for non-Utility Billing (e.g., Building Permits): $50,000
- Maximum online payment for Utility Bills: $10,000
No fees will be charged for payments made by cash, personal or company checks, money orders, or bill payments initiated directly through your bank.
Skibum says
Oh yeah, the city thinks they are so swift by making this change, do they? Well I have some news for the city. For several years, the City of Palm Coast has had a concerted effort to persuade utility customers to “go paperless”, enroll in the online payment portal with a credit card attached to the online account for automatic payments, as well as to receive no actual paper utility statements in the mail. Well, I did my part several years ago and followed through with the city’s request because it was said that doing so would save me time and would also save the city money because they would not need to send monthly statements to my house through the U.S. Postal Service. So I guess all that effort was now somehow misguided, or maybe even “fraudulent” because it has been costing the city and extra $700,000? How could this be?
OK, I got the latest message LOUD and CLEAR! I am going to go online and CANCEL my automatic payment authorization, delete the credit card information from my utility account, and stop the paperless authorization. Back to square 1, so starting the first of next month, the city can MAIL my utility bill to me and I will enclose a check and mail it back or drop it off in person if I am near city hall. I am not paying the extra charge, and if doing this results in extra work in the utility department for staff, they will just have to deal with it because of this stupid, backwards thinking and inefficient burden they are placing on residents.
Joe D says
Okay….to my knowledge, the cost to process a paper check is MUCH more expensive than a debit card payment. In Flagler Beach, I’m used to paying a no fee (at least at the moment) electronic check.
The REAL issue should be: let’s take a look at the PROCESSING COMPANY they are using that charges $700,000 per year in processing fees!?!
I have no problem with a fee to use a credit card, I remember in my younger married days when my wife and I ran a Historic 6 room Bed and Breakfast as a second business, the processing fees WE paid to process credit card using guests (95% of them), were considerable, and we just “ate” it as as a cost of business. I see now, that wasn’t fair to our CASH paying customers (since part of the room charge was based on covering those fees).
Debit cards and electronic check payments should be no charge. Since they process almost immediately.
I SERIOUSLY think it’s time to rethink those PROCESSING COMPANY contracts. Those fees seem high…but it also is ridiculous that Palm Coast was “absorbing” $700,000 in fees!!
FLF says
Just set up a electronic payment from your checking account, I’ve been doing it for over 20 years, not one problem.
JC says
Sadly I support the council on this decision. Payment fees via debit/credit card acceptance has been rising over the years and it is becoming a bigger hit on companies bottom lines. This is on top of fees that a payment provider would charge extra just to use them as the payment provider towards the city. Flagler County been charging card fees for years, which is why I prefer paying Personal Check or Online ACH/eCheck since it is no extra charge. Can’t say I am a fan of Palm Coast charging 43 cents extra for Online ACH/eCheck, but I will live.
Before people say Palm Coast can afford $700,000+ of fees per year, that is still $700,000+ per year on fees. With a growing population the amount of payment fees will only go up, which Palm Coast will have no choice but to push those fees towards the customer.
A good bit of small businesses in Palm Coast that I do business with do charge extra for paying with a debit/credit card. Those are a hidden cost of business, and those businesses really prefer if you pay cash since you don’t get hit with the surcharge and it keeps the business running. Either that or raise prices for everyone so even cash customers are in a way paying for surcharge fees.
If you are a friend of a small business owner, ask them how much they pay extra just to accept debit/credit card payments. It can be shocking.
Susan says
Let’s all mail our payments in and with the post office delivery you can bet the payments won’t arrive on time.
I never heard of being charged to pay a bill. This is outrageous. The City of PC and the Mayor along with all their council members sure know how to disappoint their taxpayers.
Ken says
Processing costs are part of doing business and should already be part of the free. Well I hope they enjoy cashing the less time consuming and hassle free cashing ot my checks.
Dennis G Lynch says
I guess council members live in some places of the city that does not experience what I do. About every 3 to 4 days I have to scrub the toilets in my house to rid them of the reddish, pinkish stain at the water line of the toilets. I have been using a pumis stone to clean the stain, as regular household cleaning products don’t do the job. I wouldn’t drink the water this city provides to our residences, because I don’t trust the quality of the water. Now I’m reading they want even more for this crap they call water. Anybody considering moving to this city would do well by themselves and their families to reconsider. I’d won’t mind so much paying for quality water, but you ain’t getting here!
Robjr says
So these folks are putting an additional tax onto the carrying charge.
They know exactly what they are doing.
Squeezing the taxpayers wherever they can.
I am still waiting for streets I travel to be paved so I won’t have to
continue to dodge potholes.
Mark says
Would be nice if you could still pay in person on Utility Drive or drop your payment in the collection box there.
Eileen S Araujo says
another way for the city to overcharge the customers who pay their bills on time
Richard Fay says
I read this article and I left with a sinking feeling that there may be some sort of double dipping going on. If I read this quotation appropriately : ‘ … she also said something that appeared not to register with council members: the costs the city was absorbing were already built into the rates currently paid by the residents. “Same as if you’re walking in paying by cash,” Alves said. “Those costs are calculated into the rates that are paid by the residents.” In other words, the current rates reflect the cost of the transaction fees, but now that the city will no longer bear that cost, it will, in effect, realize an additional windfall. ‘
When will the potential $700,000.00 windfall be returned to customers?
Linda Cohen says
For over 25 years I have asked why those of us who have set up payment thru a credit card were receiving an ENVELOPE to MAKE OUR PAYMENT! What a waste of $$$$ on envelopes that go into the garbage! Never received an answer! And now a fee for paying your bill ! Ridiculous. Makes things worse for Senior citizens and others who don’t want to give out bank info or who don’t use computers!