Item - 2020.EX15.5

The Executive Committee recommends that:

1.  City Council authorize the Deputy City Manager, Corporate Services, in consultation with the Chief Financial Officer and Treasurer, to negotiate and execute a non-competitive agreement with PayIt for a three year term, plus two one-year renewals at the option of the City, to develop and deliver a digital government platform for City services, on terms and conditions to the satisfaction of the Deputy City Manager, Corporate Services and as generally outlined in this report, and in a form satisfactory to the City Solicitor.

2.  City Council authorize the Deputy City Manager, Corporate Services, in consultation with the Chief Financial Officer and Treasurer to further negotiate and execute with PayIt, as part of the agreement contemplated in Recommendation 1 above, or in a further amending agreement, such other potential benefits for the City that may be achieved through commercial arrangements with PayIt, such as the co-development of innovative solutions to enable the scaling of this platform in the Canadian marketplace, as may be deemed appropriate in the opinion of the Deputy City Manager, Corporate Services, in consultation with the Chief Financial Officer and Treasurer. 

3.  City Council authorize user fees for online card payments using the PayIt system at 2.35 percent of the payment amount for online credit card transactions, and 1.5 percent of the payment amount for online debit card transactions, commencing with online card payments for property taxes, utilities and parking fines, and direct the Deputy City Manager, Corporate Services, and the Chief Financial Officer and Treasurer to work with PayIt to expand the permitted services for which online card payment user fees can be charged, and authorize the necessary amendments to City of Toronto Municipal Code, Chapter 441, Fees and Charges and any other necessary Municipal Code Chapters as may be required.  

4.  City Council delegate authority to the Chief Financial Officer and Treasurer to establish polices and guidelines regarding payment methods for fees and charges to be accepted by the City, including ensuring such policies will always include a free payment method option for customers, as well as to reduce the burden of credit cards where possible, and to amend City of Toronto Municipal Code Chapter 441, Fees and Charges, and any other relevant Code Chapter, to delete the current acceptable payment methods of fees and charges.

For the City of Toronto, it is clear that our current state and approach towards modernization requires critical acceleration and new innovative partnerships.  The City has been working on a customer experience transformation for the past few years, however we are now required to work at unprecedented speed and scale, with greater impact and outcomes.  Reimagining our service and facilities, the way we equitably interact with residents, businesses, and visitors, and our shift to digital is a prime focus. 

Our digital government vision, is a connected and equitable Toronto with an affordable, accessible and resilient digital environment as a public service for all.  Specifically:

- Digital service delivery to the public to improve the overall service experience;

- Digital equity and inclusion to bridge the digital divide and access to service for underserved communities;

- Digital resilience and agility to assure service continuity and adapt to shocks; and

- Digital partnerships and revenue-generation to drive financial sustainability and economic growth.

Now, more than ever, the need to scale delivery of digital government services and engagement is a focus. Public health standards, fiscal realities and customer expectations and increased comfort level for fully digital experiences require the City to accelerate at an unprecedented rate. "Business as usual" is not an option.  The pandemic has pushed digital services to the forefront. Toronto residents, businesses and visitors want simple, convenient, and connected service from the City, similar to the way they interact with their banks. The City must take steps to transform our services to meet public expectations on digital experiences, leveraging technology and human-centered design, to create relationships built on trust and confidence.

Driving a digital government supports some key priorities of the City’s Corporate Strategic Plan, "Financial Sustainability" and "Well Run City".  The City is committed to work and partner with stakeholders to ensure value and affordability for taxpayers, adequately fund municipal services and infrastructure.  One step towards this goal is implementation of digital government platforms that accelerates the City's financial transformation, and offer more convenient payment options for customers, in a seamless and centralized approach. The City has an opportunity to leverage the industry for innovative partnerships, in particular those who have expressed openness in exploring potential for co-design and innovation with the City.

This report seeks City Council authority to enter into a non-competitive contract with PayIt that will transform how the public interact with the City.  The Toronto digital government platform approach will drive consistent City-wide digital customer service experience.   In the case of PayIt, both the City and PayIt recognize that the innovative partnership co-design model means the City's efforts will contribute to the quality of continuous service improvements for the City and potentially beyond. Staff is seeking authority so that negotiations with PayIt can include consideration of other valuable potential benefits to the City through the commercial arrangements with PayIt, including the co-development of innovative solutions to enable the scaling of digital platforms in the Canadian marketplace.

The following outcomes will be key benefits to the City:

1.  Improved Customer Experience - Provide residents, businesses and visitors with a unified digital experience that brings services and information to the touch of their hand, flattening divisional silos and presenting services in a way that is intuitive, personalized and simplified – one identity and account, one digital wallet, one contact for notifications and e-bills for example (see Attachment 1, City's Digital Customer Experience Vision). 

 
2.  Payment Centralization and More Payment Options – Financial transformation means providing more digital payment options to customers in a standardized way across the city, such as credit, debit, and Electronic Fund Transfer and e-chequing, while phasing out more costly forms of payment, respecting access and equity concerns.  A centralized payment and billing platform would replace the public-facing portion of the 22 systems that exist today and automate reporting and reconciliation across the City.

 
3.  Risk and Reward - The proposed partnership with PayIt is attractive because they are compensated based on the City's digital adoption rate for payment.  PayIt would front the capital investment and are rewarded based on shifting volumes to digital payment, meaning incentives are aligned and the City realizes significant reductions in operating costs.