The City of Toronto, PayIt, and Public Access to Information. Status Report, August 2022.
Auditor General, Project Status, FOI adventures, and More
It has been two months since I last posted a series of PayIt tweets, for archival purposes. I haven’t had a chance to synthesize a lot of what has been going on over the lats several months, but expect to before year’s end.
One of the primary reasons that tracking and documenting this procurement has medium-term consequence beyond Toronto is because part of the way the deal was negotiated puts the City of Toronto, functionally, into the role of business partner to PayIt. We, as the City, will receive financial benefit if/when we get other Canadian cities to adopt the platform. So a small update on that front, as well as a few others.
Status of the Auditor General’s Report on PayIt/Unsolicited Proposals
One of the outcomes of the community engagement effort around PayIt was a successful motion to have the Auditor General take a look at PayIt, the unsolicited proposals process writ large, and the Partnerships Office. The Auditor General has included this report in their 2022/2023 workplan as follows:
“This audit will focus on the procurement and implementation of PayIT as a [sic] well as a review of the City’s public procurement process for unsolicited proposals.” (Auditor General’s Office 2022 Work Plan. Nov 1, 2021, pg. 13)
I filed a complaint with the Ombudsman’s Office and it was eventually transferred to be attached to this report through a memorandum of understanding that exists between all four of Toronto’s accountability offices about information sharing. This means little other than I have a case number under which I can share information with the Auditor General to support their efforts.
Status of the Project’s Implementation and Money Flow in Toronto
The PayIt system is live. It is white labelled under the name MyToronto Pay. This is what you see/have to accept when you visit the site. The url in use is: https://pay.toronto.ca/
The money being transferred from Toronto residents to PayIt via this deal is not live, so to speak. On July 7 I asked the City for an update on how much money had been paid out to PayIt via Toronto residents.
As a reminder, the way this deal was structured is that the City has set itself us as a financial intermediary, creating a flow-through from residents directly to PayIt. If you pay a bill using this system, a percentage goes directly to PayIt.
I did not get answer about money. This is the first answer I received from City staff: “With really no marketing we are seeing adoption grow steadily and will soon surpass 50k customer accounts. We are of course tracking the payments the City makes to PayIt and will be coming back to council with an update next year that will include those metrics.” When I asked again for an amount I did not receive an answer. I’ve moved this question into a freedom of information request track.
It is, of course, inane, that people are paying PayIt directly and the City is not immediately and directly transparent about how that money is moving and how much of it. This business model is grounded in the obfuscation of the City, of course, via white label.
How this looks in practice, as an official service of the City:
Here’s how the service is summarized, including the digital wallet. I have not used it.
Status of the City of Toronto Getting Other Cities/the Province to Adopt PayIt
In January of this year I asked City staff if/how they were progressing on getting other cities to adopt PayIt, given this was a source of much excitement about this deal in early versions of the staff report that glowingly described the mutual benefit of this innovation partnership. The answer provided in January by City staff was, first: “Our focus thus far has been on launching the first two services and ensuring the City’s standards have been met. As we move into 2022 we will begin conversations with other municipalities and orders of government” then in follow-up, same month: “To date we have been more focused on launching the first services and compliance with the City’s standards. We have not reached out to the Province or municipalities yet but it is on our roadmap for 2022.”
By July, when I asked about where this was at, staff said: “I haven’t been involved in any discussion with the Province or any other municipalities lately. But I can ask PayIt where they are at with those.”
Interesting shift in approach but ok. As we head into September, will be good to get more of an update on where this item is sitting in the roadmap. This is not just about accountability on product implementation, this is about accountability on how this deal was both structured and sold to elected officials. From the the July 2020 staff report that sought to sole source the contract, titled: Innovative Partnership for Digital Government Platform —
“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”
Just typing those words out and one wonders how the words and intent did not raise procurement flags. Moving along. The three main benefits of the deal are described, in this order, as: improved customer experience, payment centralization and more payment options, and 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.” (page 2)
Later on, there is reference to “additional upside from monetizing the City’s brand and product development, for example in the form of a ceiling once a threshhold has been achieved”. it goes on to describe how:
“The City can take the opportunity to augment traditional vendor models to break “business as usual” and find space to provide benefit delivery to all parties. In the case of PayIt, both the City and PayIt recognize that the innovative co-design model means the City’s efforts will contribute to the quality of PayIt’s platform. Staff is seeking authority so that negotiation with PayIt can include consideration of other potential benefits to the City through the commercial arrangements with PayIt, including the co-development of innovative solutions to enable the scaling of this solution in the Canadian marketplace.” (page 8)
It’s gone from this in 2020 to ‘we don’t know what they’re doing in Canada, we’ll ask them’ in 2022. One Page 9 there are more bulleted proposed benefits.
The point of revisiting this today in the more subdued light of day, and with the passage of time, is to understand how this positioning and frame impacted the procurement, the way the deal was communicated, and, most importantly, how this transaction evaded standard procurement protocol. The impacts the history of this deal had on the fairness of the public tendering process that followed.
It also goes to show how various prior city reports and ideas were used as references and rationale to sole-source this project. The pandemic was also used as part of the justification. When we consider what the Auditor General will come back with, we need to understand that of course there are benefits to the City of this model, that’s not in question. It’s a more complex question to do the valuation work on what it means to provide direct intermediary access to one of the largest and most secure assets around: the public fees and tax base.
Freedom of Information Adventures — Ongoing
I’m going to follow up with a second post about this. For now I’ll say that I’ve got a phone call scheduled via the Clerk’s office with representatives from several various City divisions while my latest records requests to those divisions are on hold. The intent is to see if we can talk about some of what I’ve been asking for so that I can take what are broad requests and narrow them somewhat. This would include, for example, the financial information.
What I learned through the latest round of information that I filed is that it’s basically useless to try to access records from the City Solicitor’s office. Where this is a problem, and it’s not exceptional with tech, is that access to records related to negotiation are difficult to come by through that channel. When valuations for something as significant as this deal are going down and they are fundamentally black boxed we aren’t in a great position, from a public oversight perspective.
I am still parsing the records returned from my records request about the pilot project the City did with PayIt. Will come back with more on that next post, as well as the prep I’m doing for the call with the City Clerk’s office and City staff.
