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Home My WebLink AboutMINUTES - 10011991 - IO.4 T. .n. -4 TO: BOARD OF SUPERVISORS -L �>-- Contra FROM: INTERNAL OPERATIONS COMMITTEE Costa September 23 . 1991 `c¢ County rfj�\��lTy`I J DATE: vr�.count' REPORT ON THE RECOMMENDATION OF THE SOCIAL SERVICES DIRECTOR SUBJECT: THAT THE COUNTY DEVELOP A PROGRAM WITH A CREDIT CARD ISSUER PROVIDING- THE PUBLIC AN OPPORTUNITY TO DONATE TO YOUTH SERVICE PROGRAMS IN THE COUNTY SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: Authorize the Social Services Director to convene a committee including representatives from the Family & Children' s Trust Committee (FACT) , Social Services Department, County Counsel' s Office, Auditor-Controller and County Administrator' s Office to develop a more detailed feasibility study of the Affinity Credit Card Proposal and present their recommendations to our Committee on December 9, 1991. BACKGROUND: On June 11, 1991, on the recommendation of Supervisor Powers, the Board of Supervisors referred to our Committee a proposal that the County consider developing a VISA or MasterCard program to provide an opportunity for the public to contribute to youth service programs when making ordinary credit card purchases. The Board also asked that the Ann Adler Family & Children' s Trust Fund be included in any program that is developed. On September 23 , 1991 our Committee met with Social Services Director Jim . Rydingsword and reviewed with him the attached report which he filed with our Committee. It appears that at least on a conceptual basis the idea of an Affinity Credit Card Program is worth pursuing. The program works by donating a portion of the fee which retail stores pay to the issuer of the credit card to an identified program. Typically, this equals 7/10 of one percent ( .70) of the amount of the purchase. CONTINUED ON ATTACHMEV{PS YES SIGNATURE: RECOMMENDATION OF COn- S ��at RECOMMENDATION OF BOARD COMMITTEE APPROVE SIGNATURE(S): DER UNNE WRIGHT McPEAK ACTION OF BOARD ON OctO er 1, 1991 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS(ABSENT I I I I ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. CC: ATTESTED October 1, 1991 Please See Page 2. PHIL BATCHELOR,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR 8 M382 (10/88) , BY nr. 0.1DEPUTY I .O. -4 The program works because the issuing bank increases its issuance of credit cards. It would require the issuance of perhaps 10,000 credit cards to make the program workable. Mr. Rydingsword estimates that the program could return between $150,000 and $300 ,000 a year to identified programs in the County. There is also a similar program operating which operates on the basis of long distance telephone calls. In this case, long distance service is offered for a discount and a percentage of the cost of the long distance calls is dedicated to the identified program. Our Committee agrees that the program is worth exploring in more detail. Weare, therefore, asking that a more detailed feasibility study be developed by an inter-departmental group which also includes representatives from FACT. Our Committee will make a further report to the Board following our receipt of this feasibility study in December. cc: County Administrator Social Services Director County Counsel Auditor-Controller Bill Weidinger, Staff to FACT Social Services Department 10 -- 4o SSDCIAL S ERV I C e R E P T P _ 10 :2 SOCIAL SERVICE DEPARTMENT CONTRA COSTA COUNTY DATE: September 20, 1991 MMO TO: Board of Supervisors Internal Operations Committee FROM: James A. Rydingsword, Director ..� SUBJECT: Affinity Credit Card Proposal ------------------------------------------------------------------ on June 11, 1991, the Board of Supervisors referred to the Internal Operations Committee a proposal that the County develop a program in conjunction with Visa or Master Card under which the public would have the opportunity to donate to youth service programs when they make ordinary credit card purchases. The Board also requested that the Ann Adler Family and Children's Trust Fund be included in any program that might be developed under this proposal. I have had the opportunity to look into the issue of Affinity Credit Cards and their potential use in Contra Costa County for family and children's programs. This report is an update to the Internal Operations Committee on that information. In general, Affinity credit Cards are" used by many organizations in the United States for special interest funding. My first contact was with the Bank of America who said to me that they are not in this business and that many banking institutions have withdrawn from this market since they believe it is a difficult market product. However, they did refer me to two organizations in the country who are involved in this business. The first organization is Maryland National Bank. They are probably the major bank in the country who continues to be involved in the business of affinity credit cards. They said to me that they would be interested in pursuing a proposal with Contra Costa County. They would need to know more about the county and more about our ability to issue and have such a card issued in Contra Costa County. They would be able to then do an assessment of the potential marketability of such a card to Gen 9c (New 3/86) :Sep - 20 — Sol P R I 10 : 41 S O C I A L S E R V I C e D e f 'T YZKO T0: Board IDC September 20, 1991 SUBJECT: Affinity Credit Card Proposal Page 2 support family and children's services programs. After they have done that assessment, they would then be able to inform us whether it mould be a reasonable marketing approach in Contra Costa County The second company I talked with is a company called Vertical Marketing Inc. Vertical Marketing, Inc. , is a broker for two types of programs. The first program is an affinity card program and the second program is a long-distance telephone discount program. This company also is interested in working with Contra Costa County either on an affinity card program or on the long-distance telephone discount program. Affinity cards are credit cards that can be issued through a bank and when used, a portion of the fee collected by that bank is deposited into a trust fund. In our case, that trust fund would be for family and children's services and would need to he connected to the Ann Adler Family and Children's Services Trust Fund. The estimates from both organizations that I contacted seem to be based on an minimum of 10,000 accounts in the first year and could have a potential return of $150,000 to $300,000 per year. The long-distance telephone discount program offers long distance telephone services at a reduced cost and deposits a portion of the long-distance charges into an affinity trust fund. They advertise that the long-distance telephone service savings would be in a range of 5% to 35% to a customer. Again, the potential estimates for funds to go into a trust fund range in the $250,000 to $300,000 range. BECOMMENDATION: Based upon the inquiries that I have made into Affinity Fund Programs, I believe it is appropriate for the Board to consider pursuing this issue with both of these organizations. I would recommend that the Board ask the General Services Department and the Auditor-Controller to work with the Social Services Director on a more detailed feasibility study of this project and agenda this for the Internal Operations Committee for further analysis. JAR:sjb