Fort Smith residents to soon pay credit card fees for city payments

The Fort Smith Board of Directors approved a plan Tuesday (Dec. 3) to pass along credit card fees to citizens. The city uses PayIt as a third party to process online and in person payments for different services.

PayIt charges 80 cents plus 2.5% of the bill value for each transaction. The city has absorbed the fees, said Utility Director Lance McAvoy.

The city paid almost $900,000 in those fees in 2024. Had the city not incurred those fees, it would have met its debt service on bonds for water system work, said Andrew Richards, the city’s finance director.

“We wouldn’t have had to raise the water rates,” City Director Christina Catsavis said.

The city is required to bring in 110% of its approximate $180 million in debt in order to meet its debt covenants. In fiscal year 2023, the city missed that, only bringing in 108% of its debt. In order to help the city meet its debt covenants, the board of directors passed a water rate increase that began Aug. 1.

The resolution passed Tuesday allows the city to instruct PayIt to collect the processing fees directly from citizens beginning March 1. This will cover PayIt and any credit card or debit card transaction used in solid waste by commercial customers, McAvoy said.

City Director Neal Martin said citizens have options.

“I was against the city doing this. … But there are alternatives to where a citizen does not have to pay a fee. They can (pay) through their bank (if their bank does not charge a fee.) They can mail a check. They can drop a payment in a drop box around town. Or they can come to the city offices to pay. There are options that are free,” Martin said.

A citizen paying their utility bill in person at the city offices will still pay the fee if they use a debit or credit card. Transaction fees will begin March 1.