Can a government agency decline to accept legal tender?

Interesting question: can a government agency refuse to accept legal US currency for the payment of a citizen’s fee? A PA township thinks so:

Officials in Millcreek Township, along with its water and sewer authorities, have adopted a policy limiting how much change they’ll accept from residents paying sewer bills and other fees.

David Sterrett, executive director of the authorities, tells the Erie Times-News that officials came up with the policy after a woman showed up last month with a shoebox full of nickels, dimes and quarters to pay a $200 sewer bill.

Sterrett says it took four employees an hour to count, sort and put the money into paper sleeves.

The new policy limits residents to using $10 in unrolled coins or $20 in rolled coins when paying bills.

While I get the point about it taking “X” number of employees hours to count the funds, the question stands. If the currency is legal tender, how can a government agency refuse to take it? And if they refuse to take the coins, requiring the citizen to go have a transaction with a bank (a private institution) will the agency not penalize the citizen should that transaction take long enough to push them past some due date?

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