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HomeMy WebLinkAboutMINUTES - 12171991 - IO.5 Ss I .O.-5 TO:' BOARD OF SUPERVISORS s- '-L`° Contra : a FROM: INTERNAL OPERATIONS COMMITTEE Costa ot n. S December 9 , 1991 Count/ �o DATE: �SrA cou`ri t{ SUBJECT: REPORT ON THE FEASIBILITY OF IMPLEMENTING AN AFFINITY CREDIT CARD PROGRAM SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: 1 . Authorize the Chairman to sign a letter to be sent to banks, other financial institutions and interested groups/individuals to request information regarding implementation of an affinity credit card program in Contra Costa County, the proceeds of which would be earmarked for children and youth via the Ann Adler Family & Children' s Trust Fund. 2 . Direct the County Administrator to continue to work with the Treasurer-Tax Collector to determine the feasibility of inserting affinity credit card marketing material in property tax bills . 3 . Direct the Committee formed by the Board Order dated October 1, 1991 on this subject consisting of representatives from the Family & Children's Trust (FACT) , Social Services Department, County Administrator's Office, Treasurer-Tax Collector' s Office, County Counsel and Auditor-Controller' s Office to review the responses to the Request for Information (RFI) letter noted above and recommend to the 1992 Internal Operations Committee by March 1, 1992 the feasibility of proceeding with this program. 4 . Remove this item as a referral to our Committee and instead refer it to the 1992 Internal Operations Committee in order to continue to provide ongoing oversight to the proposal . CONTINUED ON ATTACHMENT: X YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINIST O RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER ' �p v � SIGNATUREM:: . SC SUNNE WRIGHT MC PEAK ACTION OF BOARD ON ecem e APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ONE DATE SHOWN. CC: please see page 2 . ATTESTED Aft / Z, PHIL BATCHELOR,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR M382 (10/88) • BY DEPUTY I .O.-5 -2- BACKGROUND: On October 1, 1991 the Board of Supervisors approved recommendations from our Committee on this subject, including the formation of the Committee noted above to further explore the feasibility of such an affinity credit card program and asking the Committee to report back to our Committee on December 9, 1991 . On December 9, 1991 our Committee met with staff from the Social Services Department, the Auditor-Controller, and staff from the County Administrator' s Office. Assistant Social Services Director Rose Manning recommended that the Board authorize a Request for Information (RFI) letter be forwarded to a variety of banks and other institutions to determine their interest in pursuing such an affinity credit card program for the County. The one point on which our Committee was most insistent is that any contract into which the County enters must include a provision that if the bill is paid in full on time by the credit card holder no additional interest should be charged. Some financial institutions charge interest from the date of the statement to the date of payment and do not reveal this fact in their marketing information. Such a commitment should be made an explicit part of any contract. In addition, the marketing materials must indicate the. actual amount which is being credited to. the Ann Adler Family & Children's Trust Fund by the bank or other financial institution. Staff have identified the following questions which require further research and which could, hopefully, be answered by the responses to the RFI : 1 . Should the County find a lending institution directly or work through a broker? 2 . How can the County maintain marketing control over what is said about the use of the charitable contributions so no misleading information is released to the public? 3 . How can the County market to the proper audience? 'How can the County insure that a significant portion of those who apply for a credit card will not be turned down on the basis of a credit check? 4 . What is the break-even point in terms of the costs expended by the County versus the benefit in terms of contributions which are received? In order to answer these questions and focus more specifically on how such a program might work, we are recommending that a letter be sent to a variety of banks, other financial institutions and organizations to lay out the criteria the County must have met in any such program to determine what interest there might be. Once responses have been received and staff has had an opportunity to review and conduct an analysis of the responses, we are asking that staff report back to the 1992 Internal Operations Committee by March 1, 1992 with their comments and recommendations on the feasibility of tailoring an affinity credit card program to the requirements of Contra Costa County and successfully marketing such a program. cc: County Administrator Social Services Director Auditor-Controller Treasurer-Tax Collector County Counsel Sondra Rothwell, CAO' s Office FACT (Via Mary Kay Miller, SSD) (VIA CAO) The Board of SupervisorsCOrltf a Phil Batchelor Clerk of the Board .County Administration BuildingSta and COCounty Administrator 651 Pine St., Room 106 Costa (415)646-2371 Martinez, California 94553 Count y Tom Powers,1st District Nancy C.Fanden,2nd District Robert 1.Schroder,3rd District ' Sunne Wright McPeak,4th District .� Tom Torlakson,5th District December . 17 , 1991 To. All Interested Parties : The Board of Supervisors is currently exploring the possibility of implementing an Affinity Credit Card program in Contra Costa County. The proceeds or royalties of this program would be deposited in the County's Family Ann Adler and Childrenb Trust Fund and would be earmarked specifically to augment services for children and youth, particularly services to treat or prevent child abuse. If you, your institution, or any of your subsidiaries are currently engaged in the marketing or brokering of such cards, or 'if you would be interested in assisting the County in further pursuing this possibility, we would appreciate your response to this inquiry. We are interested in any information and/or materials you might provide that would assist the County in its deliberations . In your response we would like you to specifically address the following issues/questions : . 1 . Background .and Experience How long has your institution/business been involved in the Affinity. Card market? What groups/associations are you currently representing? ' What references can you provide to us? 2 : Feasibility Study How would you conduct a feasibility study to determine whether an Affinity Card program is an '' appropriate fund-raising vehicle in this County? Upon what factors would you base your assessment? What are the approximate associated costs and how would they be borne? 3 . Marketing Strategies, What has been your experience with various marketing strategies - direct mail, telemarketing, newspaper/ magazines, ' radio/T.V. ', other? What additional mechanisms might be, employed in a ' County-wide marketing scheme? What are the payment provisions of your outlined marketing techniques? -2- 4 . Marketing Control How is the content of your marketing campaign determined? What mechanisms are in place to ensure adequate review/acceptance of any marketing by the appropriate County staff? 5 . Credit Card Approval Process How does your institution ensure that the largest number of applicants are approved? What pre-screening tools ate used? Based on other, somewhat. comparable areas, what percentage of applicants are routinely approved? 6 . Membership Benefits, What is the annual membership fee for cards offered by your institution? Is the first year discounted? What are the usual minimum/maximum credit lines by card? What is the current APR and how does this compare . to other institutions ' rates? What are the finance charge and minimum payment schedule options? Are there additional benefits that accrue to members, e.g. travel, insurance, cash advances, etc? Can your institution assure the County that interest charges do not accrue from the date of purchase, but rather from the point when a bill is due? If you do not already provide such a policy, would you be willing to negotiate one with the County?. 7 . Customer Services What specific services can your institution offer to Contra Costa residents that would make switching to an Affinity Card (or carrying an additional card) an attractive proposition? 8 . Fees/Royalties Are your fees/royalties based on a per card, per transaction, a percentage of total sales or a combination of these? What would be your estimate of the fees/royalties Contra Costa might realize during the first year? During the ensuing years? Will your institution disclose information relative to the benefits of the card to include what percentage of retail sales charged to the card will be donated to the Trust Fund? _3_ The above listed issues/questions are certainly not exhaustive and the County would be interested in any additional information you might provide. If you or your business is involved in the brokering of Affinity Cards (rather than their issuance) , please provide us with information relative to your history, the number and size of groups/associations for which you have obtained issuers, the number of lending institutions with which you- are associated and other pertinent information. In the interest of time, we are requesting that any interested parties/institutions respond to this inquiry no later than January 31, 1992 . Following a thorough analysis of all responses received', we are hoping to select a group/institution which best meets the needs of the .County and to quickly move ahead with development of this program. Based on the number of responses received, however, it may prove necessary to issue a formal Request For. Proposal from interested parties to ensure a more fair and equitable process of selection. If you have any additional questions or require more information to prepare your response, please contact Sondra Rothwell at (510) 646-2764 . We look forward to hearing from you and hope this program can become a successful mechanism to provide the additional services so needed by the children and youth of our County. Sincerely, Tom Powers Chair, Board of Supervisors SR:cd