Denton City Council Meeting April 7, 2026: Credit Card Fees, Sustainability, Animal Shelter
Denton City Council Meeting - April 7, 2026
The Denton City Council met on April 7, 2026, beginning at 2:03 PM for a work session and reconvening at 6:31 PM for the regular meeting. The work session covered credit card processing fee options, updates to the Simply Sustainable Framework, and the Linda McNatt Animal Care and Adoption Center expansion. The evening session included public comments, consent agenda, public hearings on affordability incentive amendments and a zoning change, as well as approvals for a roadway surface treatment contract and the transition of Discover Denton to an independent destination management organization. The meeting concluded at 7:55 PM.
Consent Calendar
- Approved unanimously (7-0) without any items pulled.
Public Comments & Testimony
- Dr. Abraham Benavides offered an invocation and prayer for the meeting.
- Kathleen Davis (2620 Piccadilly Lane) described issues with the Sherman Crossing detention pond, including flooding, herbicide use, algae blooms, fish kills, and mosquito problems. She advocated for collaborative solutions with the city.
- Dr. Jamie Baxter Sly (University of North Texas) proposed a bioswale (blue-green infrastructure) solution for the detention pond, noting cost-effectiveness and potential for UNT and TWU partnerships. She stated the HOA declined a meeting.
- Sheila Peterson (neighborhood representative) requested the city consider a two-minute pitch to combine city and private funds for neighborhood green space, and asked the city to purchase an adjacent vacant parcel for a community green space and playground. She noted 200+ signatures and 70 attendees at a town hall.
- Greg Fees voiced concern about concreting cinder paths at North Lakes Park, arguing it is a solution in search of a problem, causes injury to runners, and lacked public notice. He requested a halt and removal of concrete.
- Dana Zoltner (volunteer at animal shelter) praised the collaboration between the shelter and Daily Bread, noting improved cleanliness, staff efficiency, and positive impact on underserved populations. She thanked the council for the program.
Discussion Items
- Credit Card Processing Fees (ID 260057): Chief Financial Officer Matt Hamilton presented three options for recovering credit card processing costs (currently $1.57 million annually). Option 1: status quo (costs absorbed by utility rates). Option 2: convenience fee (flat fee, excludes recurring payments, includes e-checks). Option 3: service fee (flat or percentage, includes recurring payments, excludes e-checks). The PUB recommended option 3 with a 1.55% fee on all residential and commercial card transactions. After council discussion, direction was given to proceed with Option 3 using a percentage-based fee applied to all customer types. Some council members initially preferred a flat fee but later amended to percentage. Staff will implement over six months, targeting October 1, 2026.
- Simply Sustainable Framework Update (ID 260269): Sustainability Manager Catherine Barnett presented the 2026 update, which reduces the 2020 framework from 33 goals to two primary goals (municipal and community) and six focus areas. The framework has 63 actionable items. Council provided direction to update the framework as proposed. Councilmember noted concerns about the 100% renewable energy goal for DME customers but stated it would be discussed separately. The framework will be adopted via resolution at a future meeting.
- Linda McNatt Animal Care and Adoption Center Update (ID 260386): Director of Capital Projects Seth Garcia and Director of Animal Services Nikki Sassanis provided a construction update. The project expands the facility from 18,000 to 28,000 sq ft, adds 18 parking spots, 5 play yards, and replaces the HVAC system. Budget is $20.35 million. Construction will be phased: Phase 1 (new addition) starts May 2026, lasting 12 months; Phases 2 and 3 (renovation of existing facility) start May 2027, with Phase 2 expected to take 3-4 months, and full completion by November 2027. Operational impacts include reduced housing capacity (from 59 runs to 16) during Phase 2/3 and loss of veterinary clinic access. Mitigation includes microchipping campaigns, intake diversion, and partnerships with Spay Neuter Network and Operation Kindness. No action was taken; the update was for information only.
Key Outcomes
- Credit Card Processing Fees: Council directed staff to implement Option 3 (service fee) as a percentage-based fee on all online card payments (residential and commercial), excluding e-checks. Estimated rate to recover 100% of costs is 1.55%. Implementation expected by October 1, 2026.
- Simply Sustainable Framework: Council approved direction to update the framework as proposed. A resolution for adoption will be brought forward.
- Affordability Incentive Program Amendments (DCA2601A): Approved ordinance (7-0) to amend Section 2.12 of the Denton Development Code. Changes include: removing right-of-first-refusal, setting a flat 15% affordable unit threshold, adjusting income targets (rental: 5% at 30% AMI + 10% at 50% AMI; homeownership: 15% at 80% AMI), reducing homeownership affordability period from 30 to 5 years, and clarifying rules for developments under 20 units.
- Zoning Change (B725025): Approved ordinance (7-0) to rezone 5.36 acres from Rural Residential to General Office District on the north side of Barpo Road.
- Standards of Care for Recreational Care Programs: Approved ordinance (7-0) adopting annual standards of care for Parks and Recreation programs, with minor updates.
- Roadway Surface Treatment Contract (ID 260446): Approved ordinance (7-0) authorizing a contract with Intermountain Slurry Seal Inc. for micro seal and slurry seal treatments. Contract is for one year with four one-year renewals, not-to-exceed $10 million over five years.
- Discover Denton Transition (ID 260418): Approved ordinance (7-0) authorizing the interim city manager to execute an acquisition agreement for the transfer of assets, intellectual property license, and assumption of contracts from Discover Denton to the newly formed Denton Destination Management and Marketing Organization (DMMO). Future steps include lease agreements and HOT fund transfers.
Meeting Transcript
Good afternoon and welcome to this meeting of the Denton City Council. Today is Tuesday, April 7th, 2026. It is 203 p.m. We do have a quorum, so I'll call the meeting to order. And first is in person. Comments from the public, uh citizen comments from the public. We assume we have none. Okay, thank you. Takes us to second portion, which is requests for clarification on agenda items listed on the agenda for public hearing and individual consideration. Questions for public hearing or individual consideration. Seeing none, uh, I'll note that there was nothing pulled from the consent. Takes us to work session 3A. ID 260057, receive report, whole discussion, give staff direction regarding the online processing fees and cost recovery options. Good afternoon, Mayor, members of council, Matt Hamilton, Chief Financial Officer, here uh today to discuss credit card processing and cost recovery options. As you may recall during the budget process last year, uh staff brought forward um a work session item to discuss uh credit card processing fees. At the time, direction was provided for staff to reevaluate different options and what might be available. And so today uh we are bringing back what options are currently available, and that will help to inform the budget process this year. So, as some background, the city of Denton has processed credit card uh payments for over 25 years, budgeting annually for these costs. Prior to 2011, convenience fees were previously applied to online transactions but removed across all payment portals in 2011. In 2014, rising costs, primarily due to commercial cards with higher interchange rates, led to the implementation of a 2.7 percent convenience fee for commercial utility accounts that paid by phone or online. Uh the convenience fee was in place for about five years until 2019 when card brand rules changed restricting convenience fees to flat amounts only. In 2020, City Council directed convenience fees to be completely removed when the city adopted a new uh card processing contract with Wells Fargo merchant services, since the percentage was no longer allowed. And since that time, card processing costs have been absorbed uh by departmental budgets and funded through city revenues. In 2025, as I had mentioned, uh we had discussed uh the rising costs of uh card um uh processing uh during the budget process, and in October of 2025, just this last year, um card brand rules changed, presenting a new fee option that can be implemented on a percentage basis. So just to review the three cost components associated with card processing. Uh the first is an interchange rate. This is a non-negotiable, about one and a half percent uh charge plus ten percent or ten cents per transaction. The second is a card network assessment, which again is also non-negotiable and is about a tenth of a percent to 0.15% of monthly sales, so it's volume-based. And both of these cost components are set by the payment networks, the card brands, such as Visa, MasterCard, American Express, and Discover. So the city does not have any leverage or negotiation in these uh uh two components of card processing costs. The third is the payment processing or payment processor fee, which is fixed by contract. Currently, our payment processor is Wells Fargo Merchant Services, and we go out for contract every five years. Uh so as you can see by the pie chart there, 95% of the costs that we incur are network fees. Those are uh the cost components one and two that are not negotiable, and only about five percent of our total processing costs are related to the payment processor fee. So why revisit fees? Uh the customer service utility billing department is 70 percent of the city's annual card uh annual card processing costs, primarily from online payments, and account for approximately 1.57 million annually in expense. What we've seen is costs continually to increase uh up 20 percent from 1.31 million to 1.57 million from fiscal year 2024 to fiscal year 2025. Utility payments are governed by what's called MCC 4900. Merchant category codes, which is what MCC stands for, are assigned by the card networks, Visa, MasterCard, et cetera, to categorize merchants for transaction processing, the fee calculation and compliance. MCC 4900 specifically identifies transactions as being utility-related payments. And the benefit of the MCC 4900 are reduced interchange rates compared to retail merchants. So previously, only the convenience fee was permissible with MCC 4900, but again, it provided limited flexibility in how the fee was applied because it had to be a flat fee rather than a percentage. The card changes in October of 2025 now allow for what's called a service fee option with MCC 4900. So comparing the two between the convenience fee and the service fee, both are allowed for MCC 4900. As mentioned, the convenience fee would be a flat fee only, and the service fee would be a flat or percentage. Both can be applied to online transactions. The convenience fee would not include recurring payments, so that would be anyone who sets up an automatic payment with their card online. The convenience fee would not apply to that. However, the service fee would, it would apply to all card payments, whether they're recurring or non-recurring. In either of the two fees, the rate cannot be tiered.
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