YOUNGSTOWN — City officials agreed to a $70,000 settlement with a Florida company it hired to process credit and debit card transactions for the water department, but stopped being used when the city found a different vendor charging lesser fees.

Wonderware Inc., doing business as Automated Merchant Systems and based in Lake Mary, Florida, sued the city Jan. 22 for an early termination fee of $119,096 in addition to interest, attorney’s fees and “all such further relief as this court deems equitable and just” in Mahoning County Common Pleas Court.

The city signed a three-year contract with AMS on Aug. 9, 2017, with annual renewals to have the company handle debit and credit transactions for certain fees for water department bills.

Before the contract ended, the city stopped utilizing AMS for all transactions except those done in person at the water department at city hall and for the water department’s parking lot behind city hall.

The city’s “failure to utilize the services during the terms of the agreement constitutes a material breach of the agreement,” according to the lawsuit, filed by David Barbee, a Youngstown attorney representing the company.

The city’s “failure to utilize the services during the terms of the agreement constituted early termination,” Barbee wrote.

Sometime after signing the August 2017 contract with AMS, the city approved a deal with InvoiceCloud, a Braintree, Massachusetts, company, for the same services. InvoiceCloud charges smaller fees, according to the city.

Using InvoiceCloud saved the city $188,354 in fees between September 2023 and this past October, said Water Commissioner Harry L. Johnson III. With the $70,000 settlement, the city still saved $118,834 during those 12 months.

Johnson said he failed to cancel a supplemental contract with AMS resulting in the early termination lawsuit.

“It was a mistake, an oversight on my part,” he said. “I forgot about the supplemental contract. That’s where they had us. The dispute was more the numbers in the early termination. But in terms of the department, the change (to InvoiceCloud) paid big dividends.”

The city will save $188,354 – or perhaps more – each year going forward, Johnson said.

“It’s a better service,” he said. “We have text by phone. We didn’t have that with the previous service. We are charged smaller transaction fees and paper costs are down because more people pay by phone.”

For example, Johnson said AMS charged $1.25 fee to the water department for every person who paid by phone – and that same fee if someone called to pay but didn’t finish the transaction – while InvoiceCloud charges 95 cents for phone payments and nothing if the transaction isn’t finished.

In a March 25 response on behalf of the city, Deputy Law Director Adam Buente sought to have Judge John M. Durkin dismiss the case raising several defenses including AMS failed to comply with the terms of the contract, breached the contract and the damages sought were the result of the company’s “abuse, neglect, modification and alteration.”

After a mediation, the case was settled Oct. 8 for $70,000. The money to pay AMS is coming from the city’s water fund.

City council voted 7-0 on Wednesday to approve the settlement.

The settlement agreement and mutual release states AMS “maintains Youngstown has failed to perform its obligations under the agreement and possesses claims for contract-related damages against Youngstown,” while the city “denies AMS’s allegations.”

It adds: “The parties wish to resolve their dispute by agreement so as to avoid the expense and uncertainty associated with litigation and without an admission of liability by any party.”

Except for “claims which may occur in the future as a result of a failure to comply with the terms of this settlement agreement,” the two sides agreed not to sue for any reasons, according to the agreement.

The agreement also states that it “is a compromise of disputed claims and that the payment of settlement funds” is “not to be construed as an admission of liability on the part of any party.”

Each side agreed to pay their own attorney fees.

Barbee’s only comment was: “We settled. I’m glad.”