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City attorney proposes temporary penny policy: round cash to nearest nickel or credit customers
Summary
City Attorney Drew presented a policy to handle the national pause in penny production: city banks can no longer supply pennies and the draft policy would allow rounding cash transactions down to the nearest nickel or giving customers the option to credit small cents to their next bill; state bills (SB 6230/HB 2334) and federal guidance could change the approach.
City Attorney Drew told the council the U.S. Treasury had directed a halt in penny production, leaving the city’s bank unable to fulfill penny orders and the city with only a small remaining quantity of pennies (Drew said the city is down to about $20 worth). He described a draft policy that would specify when and how staff may round cash transactions when exact change is not possible.
Drew said the draft currently leans toward rounding down to the nearest five cents for cash transactions when exact change is unavailable, and he noted two state bills—Senate Bill 6230 and House Bill 2334—are under consideration and contemplate rounding rules that could instead require rounding up in some cases. He also explained that sales‑tax remittance must be made on the original transaction amount and cannot be reduced by the rounding.
Councilors discussed allowing customers to elect either rounding down or placing the extra cents on account as a credit to the next bill; staff indicated credits are already used in some cases. Members asked that any communications about the change be mailed with water bills and translated into English and Spanish so residents are aware of the option.
Drew said the policy is intended as an interim measure until clearer state or federal guidance is issued and he will return the policy to the council if legislation or federal guidance requires modification.
