HomeMy WebLinkAboutAgenda Report - May 3, 1995 (61)of CITY OF LODI COUNCIL COMMUNICATION
AGENDA TITLE: CHARTER CITY STATUS REVIEW
MEETING DATE: MAY 3, 1995
PREPARED BY: CITY ATTORNEY
RECOMMENDED ACTION: Council consideration and direction. If
desired, set dates for workshops to receive public input on charter
contents.
BACKGROUND INFORMATION: At the January 31, 1995, "Shirtsleeve"
meeting of the City Council, staff was directed to place on the
Regular Agenda a discussion of the proposed charter for the City of
Lodi. The purpose of this first meeting is to present the idea to
the public and allow the Council to decide if it wishes to pursue
this matter further with the drafting of a proposed charter.
This report is not intended as a recommendation for or against
charters, but simply as an examination of:
1. the legal differences between Charter and General Law
cities;
2. the practical differences;
3. the mechanics of becoming chartered city.
I
AUTHORIZING LAW
The legal foundations for both general law and charter cities (also
referred to as "home rule" charters) are found in Article 11 of the
California Constitution. For general law cities, Article 11, Section
2 (a) says:
"The Legislature shall prescribe uniform procedures for city
formation and provide for city powers."
APPROVED:
THOMAS A. PETERSON
City Manaaer
J:\CA\C1TY\C0UNC0M\CHARTZR.D0C rr._i
Under this constitutional grant of power, the State Legislature has
adopted an extensive set of laws covering all aspects of operation
for general law cities, including such things as the size and
composition of councils, municipal election procedures, appointment
and removal of officers and staff, etc. (Government Code Section
34000 et seq.).
For charter cities, Article 11, Section 3(a) provides:
For its own government, a county of city may adopt a charter by
majority vote of its electors voting on the question. The charter
is effective when filed with the Secretary of State. The charter
may be amended, revised or repealed in the same manner.
The California Constitution, Article 11, Section 5 (a) further
provides:
"It shall be competent in any city charter to provide that the city
governed thereunder may make and enforce all ordinances and
regulations in respect to municipal affairs, subject only to the
restrictions and limitations provided in their several charters and
in respect to other matters they shall be subject to general laws.
City charters adopted pursuant to this constitution shall supersede
any existing charter, and with respect to municipal affairs, shall
supersede all laws inconsistent therewith." (emphasis added)
In other words, for matters of purely local concern (or "municipal
affairs", discussed below) charter cities have "supreme authority"
(Bishop vs. City of San Jose 81 Cal Rptr 465) to adopt their own
laws, procedures or standards, which may be different than those
applicable to general law cities. Of course, even charter cities are
still subject to other constitutional limitations and guarantees such
as due process and equal protection requirements (Wilson vs. City of
Los Angeles 4 Cal. Rptr. 489).
In addition, some kinds of subjects determined to be of "statewide
concern" are still subject to the State Legislature's authority and
cannot be overridden by charter provisions. Whether a particular
matter is a "municipal affair" (subject to charter provisions) or of
"statewide concern" (subject to the legislature's control) can be
determined only by the courts. The legislature can't simply declare
a matter to be of "statewide concern", although it sometimes tries to
do so. In such cases, the legislature's intent will be given by
great weight by courts but occasionally the courts will find that the
Legislature has exceeded its authority (Baggett vs. Gates 185 Cal.
Rptr. 232). Statues are sometimes passed by the Legislature saying
explicitly that they apply to charter cities. The legislature does
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this in spite of rulings which say that it is empowered "...neither
to determine what constitutes a municipal affair nor to change such
affairs into a matter of statewide concern." (California Federal
Savings Vs City of Los Angeles 283 Cal Rptr 569).
There is an extensive (but not exhaustive) list of cases deciding
whether certain specific matters are "municipal affairs" or of
"statewide concern". A partial list of these includes:
STATEWIDE CONCERNS
(CHARTERS CAN'T DEVIATE FROM STATE STATUTES)
• traffic regulation
• telephone and telegraph franchises
• licensing of professions and trades (e.g., attorneys,
contractors)
• compliance with the Ralph M. Brown Act (open meeting law)
• eminent domain laws
• municipal liability for personal injuries
MUNICIPAL AFFAIRS
(SUBJECT TO LOCAL CHARTER CONTROL)
• municipal election
• methods for ordinance enactment
• municipal contracting procedures
• issuing procedures for municipal bonds
• business licenses or taxes on occupations
• imposition of real estate transfer tax
• term limits
Charters will also be subordinate to state law if the subject
addressed has been completely "preempted" by a complete and
comprehensive state statutory scheme which occupies the entire
subject, to the exclusion of any further local control (Bishop,
supra). Illustrations of such topics include matters such as
possession of hand guns, alcoholic beverage licenses and annexation
laws. In those fields, the subject has been completely preempted by
the State Legislature, and even charter cities are not free to
deviate from the general laws.
II
PRACTICAL DIFFERENCES
The most obvious practical difference between the two forms of city
government is if local residents don't like the state law on a
particular topic, they can change it, provided it is a "municipal
affair." Probably the most common subjects addressed by charters
(directly or indirectly) are financial matters because charter cities
are free to try and find more cost effective measures in some matters
than state law allows.
An example of the ways in which charter cities may be able to reduce
costs involve such things as "prevailing wage" laws. (California
Labor Code Section 1771 et seq.). Prevailing wage statutes require
general law cities to pay no less than "generally prevailing rates"
on public works contracts, even if contractors in the area are
willing and able to use labor earning less than that. These laws
almost invariably increase bid prices for public works contracts.
Charter cities may be able to avoid such as requirements.
Charter cities also have greater flexibility in competitive bidding
requirements for public works contracts (Public Contracts Code
Section 20162). In some cases, this allows cities to reduce costs by
negotiating prices directly with contractors, or by utilizing city
staff to do the work. These practices are usually prohibited to
general law cities. Likewise, charter cities have greater control
over certain kinds of franchises (excluding telephone and telegraph)
and over license fees charged for businesses.
Charter cities also have broader power over matters of municipal
taxation, subject to certain state limitations such as Proposition 13
(the one percent limit on property taxes). Since charters must be
approved by voters, in one sense they give local residents more
control over municipal taxation than does general law.
Another area in which charter cities have an advantage is the
authority to engage in profit making enterprises for public benefit
while avoiding restrictions on the pledging of city credit, or making
loans of public funds (California Constitution, Article 16 Section 6;
"Anatomy of Charter Experience", Lounsbery, 1994 (League of
California Cities). Many cities operate economic development
programs or business assistance programs under their charter powers.
other practical distinctions may include broader authority for
charter cities to adopt "local preference" rules for award of city
contracts (Domar Electric vs. City of Los Angeles 1994 WL720728) and
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avoiding state law prohibiting replacement of existing public
employees with contract personnel. (San Diego Adult Educators vs.
PERB 273 Cal Rptr 53) Some cities also feel charter status may
provide greater protection from unfunded state mandates, but as yet
no significant body of case law has been developed.
However, one of the most significant distinctions from Lodi's
perspective may be the increased ability of charter cities to operate
and set rates for city -owned utilities. With utility deregulation
approaching, the city may need maximum flexibility to compete in an
open marketplace and retain the viability of its electric utility
service.
III
HOW A CHARTER IS ADOPTED
There are two ways in which a charter may be proposed; first, a
petition by not less than fifteen percent of the registered voters
can be presented to the City Council (Government Code Section.34452).
If enough signatures are valid, the Council must then call a special
election or place the matter on the next regular municipal election.
At such election, two questions are on the ballot; (1) shall a
charter commission be elected to propose a new city charter?; and (2)
who will the members of such a charter commission be? Assuming that
the first question is approved by a majority of the voters, then up
to fifteen members may be elected to form a charter commission,
responsible for drafting the actual proposed charter.
The second method of adopting a charter is for the City Council
itself to initiate the task. In such cases, the Council may oversee
the drafting, or it may choose (if it wishes) to appoint a charter
commission or simply an informal advisory group (Government Code
Section 34458). Once the draft language is finalized, certain
printing distribution and advertising requirements must be met
(Government Code Section 34456).
Upon finalization of the draft, the Council may either call a special
election or place the issue on the next regular election ballot, as
long as this occurs at least eighty-eight days after the draft is
finalized (Government Code Section 34458). A simple majority of
voters is all that is needed to adopt a charter (Government Code
Section 34459).
If approved, the charter becomes effective after it and certain
related documents are filed with the Secretary of State. Once
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adopted, amendments or repeal are accomplished in the same fashion.
SUMMARY
For a city, being chartered has both advantages and disadvantages.
While it frees cities from some constraints of state law applicable
to general law cities, imprecise drafting may also cause legal
challenges. The result is sometimes a situation in which charter
cities are more restricted than general law cities in certain areas
(City of Roseville vs. Terry 158 Cal App 2d 75).
Other drawbacks may include the costs associated with the drafting of
the charter and the election necessary for its adoption. For some
residents, any change in the form of local government may can
anxiety. This can sometimes result in protracted controversy.
As an aside, it appears that charter elections are less controversial
when the proposed charter addresses primarily financial
considerations than when political issues are included. Such
political issues could involve things like district voting, term
limits, selection and compensation of Council Members, etc. For that
reason, it may be desirable to focus more closely on financial issues
than other considerations.
In the final analysis, one of the virtues of charters is the ability
to tailor them to exactly fit local needs and desires.
FUNDING: None required.
BWM:pn
Respectfully submitted,
Bob W. McNatt
City Attorney
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