COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

January 29, 2009

BOARD MEETING DATE:

February 10, 2009

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

James C. Porter, Director of Public Works

SUBJECT:

Ordinance to Allow Five Days for the Deposit of Commute Alternatives Program Receipts with the County Treasurer

RECOMMENDATION:

Adopt an Ordinance specifying time requirements for reporting and depositing payments for transit tickets under the Commute Alternatives Program.

VISION ALIGNMENT:

Commitment: Redesign our urban environment to increase vitality, expand variety and reduce congestion.

Goal 10: Public transportation choices are convenient, affordable, accessible and safe.

Adoption of this Ordinance will make it more convenient for County employees to take advantage of public transit by allowing more convenient on-line purchase of transit tickets.

BACKGROUND:

Article IV, Section 604 of the County Charter states “All monies received by a County office or agency shall be reported to the Controller and deposited with the Treasurer not later than the business day following receipt unless a later date is authorized by ordinance.”

DISCUSSION:

Public Works has been working with the County Treasurer’s Office to establish a system for County employees to purchase and pay for transit tickets on-line through the Commute Alternatives Program website. Although employees may currently order their tickets on-line, the system would be more efficient if it also included the option of on-line payment.

A number of alternative service providers were considered including the financial institution currently used by the County (Union Bank). After evaluating the cost estimates, level of service, flexibility of payment methods, and ease of use for the customers, it was determined that the best provider of on-line payment service for the Commute Alternatives Program is PayPal. This provider is widely used in both the public and private sector and is a familiar service to most individuals who generally do on-line payments. The interactive web site developed for the Commute Alternatives Program is able to interface with the PayPal service; therefore it is anticipated that the new on-line payment system can be ready for field testing within one month of receiving the authorization to proceed.

However, the County Charter requires that all funds received by the County must be deposited with the Treasurer by the business day following receipt of the funds unless a later date is authorized by ordinance. Therefore, an ordinance permitting a longer time for depositing the funds will be required in order to make Pay Pal a viable option. PayPal generally will make deposits within five days of receipt of the payments. After discussions with the County Manager’s Office and the Treasurer’s Office, it was determined that it would be appropriate to request that the Board adopt an ordinance to allow an exception to the deposit requirement. The loss of possible interest income from making earlier deposits will be minimal, and will be more than made up through the reduced fees charged by PayPal, the level of service, and the user friendliness of the system.

The Ordinance has been approved as to form by County Counsel.

FISCAL IMPACT:

The average amount of payments collected each month for the purchase of transit tickets is $13,000, or $156,000 per year. Therefore the potential amount of lost interest income resulting from deposits being delayed by up to five days will be approximately $34.20 per month, or $410 per year. This amount is more than made up by the convenience of the new payment option for County employees. The lost interest will be on payments made by the employees to the County and does not represent any loss in interest from investments of the Half Cent Transportation Fund, which partially subsidizes the cost of the transit tickets.

There will be no impact to the County’s General Fund as a result of this ordinance.