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Resolution Authorizing Limited Rounding of Cash Payments Due to Penny Discontinuations, with Exception of Property Tax Collections
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INFORMATION CONTACT:
Beverly Liles, Finance, Director, 704-283-3675
ACTION REQUESTED:
Adopt Resolution Authorizing Limited Rounding of Cash Payments due to Penny Discontinuation, with Exception for Property Tax Collections.
PRIOR BOARD ACTIONS:
None.
BACKGROUND:
Local governments in North Carolina are beginning to encounter some challenges in collecting cash payments as pennies become harder to obtain. The United States Mint has stopped producing new pennies, and many of the pennies already in circulation are not returning through banks. As fewer coins circulate, banks are increasingly unable to meet penny requests in change orders. Citizens/customers who do not already have pennies may also have difficulty locating them.
As a result, both citizens/customers and local governments are starting to find themselves unable to make exact cash transactions for small-cent amounts. Union County has started to experience challenges particularly in our Parks and Recreation fees and sales as well as in our Solid Waste collections at the Landfill where citizens are paying in coins and currency.
Federal law, at 31 U.S.C. § 5103, states that United States coins and currency are “legal tender for all debts, public charges, taxes, and dues.” Most payments to local government fall into one or more of these categories; utility bills, permit fees, fines, service charges, contractual invoices, special assessments, system development fees, and taxes are typically fixed obligations set by law, ordinance, or contract. This suggests that local governments may be required to accept coins and currency as payment for these obligations. The fact that the Mint has stopped making pennies does not change the legal status of pennies as currency.
The anticipated discontinuation or reduced circulation of the one-cent coin (“penny”) may create administrative burdens and inefficiencies in processing cash transactions that require exact change for Union County revenue collections. The resolution attached will provide authorization and guidance for revenue collections only when citizens have opted out of all other payment methods offered and when exact pennies are unavailable due to the penny discontinuation or supply limitations. The resolution authorizes rounding down to the nearest five-cent ($0.05) increments.
Rounding procedures will consist of the following for cash payments.
• If the payor presents the exact amount owed in cash, including pennies, departments will accept the payment.
• If the payor does not have the exact amount in cash, the department will offer alternative payment methods such as check, debit or credit card, or ACH draft when applicable to current department’s payment methods.
• If the payor still prefers to pay in cash after being offered these alternatives, the unit will apply the unit’s rounding procedure to determine the amount of cash to be collected as outlined in Section 2 of this Resolution.
• The payor’s account will always be credited with the exact amount owed, regardless of any rounding that occurs in the cash exchange and departments will report any rounding down of cash collections as shortages on their daily revenue reporting.
This Resolution shall not apply to the collection of:
• Ad valorem property taxes;
• Registered motor vehicle taxes;
• Special assessments collected as property taxes; or
• Any related interest, penalties, advertising costs, or collection remedies imposed pursuant to Chapter 105 of the North Carolina General Statutes.
• Any other tax required collection of the exact amount due by applicable law.
All such obligations shall be collected in the exact amount due as required by law, including but not limited to G.S. 105-350, G.S. 105-357, and G.S. 105-360.
FINANCIAL IMPACT:
Minimum impact on daily cash revenues for departments.