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09.a. Proposed City Charter Ballot MeasureMEMORANDUM TO: CITY COUNCIL SUBJECT: CONSIDERATION OF PROPOSED ClTY CHARTER BALLOT MEASURE DATE: JUNE 12,2012 RECOMMENDATION: It is recommended the City Council: 1) hold a public hearing on the proposed City Charter; 2) receive community comments and suggestions and provide direction on any changes to the second draft of the proposed Charter; and 3) direct staff to proceed with the process of placing a measure on the ballot at the election to be held on November 6,201 2 to approve a City Charter. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: 'The cost of placing the measure on the November ballot is estimated to be approximately $5,000. If successful, it is estimated that the measure could result in savings of $50,000 to $300,000 annually. It is also estimated that there could be as much as 40 - 50 hours of staff time involved in the election and public education process. Efficiency measures are one of the priorities in the Critical Needs Action Plan. BACKGROUND: At the January 24' meeting, staff presented recommendations to address the projected budget shortfall. One of the strategies was to place on the November 6' ballot a measure that would establish a City Charter. The City Council directed staff to prepare a draft Charter for City Council review and consideration. The first draft was presented to the City Council at the April 24'h meeting. The City Council provided the following direction: Provide more detailed information on both the pros and cons; Modify the draft Charter to require zoning consistency with the General Plan; and Modify the draft Charter to better clarify what changes can be made by ordinance. Agenda Item 9.a. Page 1 ClTY COUNCIL CONSIDERATION OF PROPOSED ClTY CHARTER BALLOT MEASURE JUNE 12,2012 PAGE 2 ANALYSIS OF ISSUES: Overview In California, there are two types of cities - general law cities and charter cities. The authority of a general law city is derived from the powers granted to it by the general laws adopted by the State Legislature and from the police power granted to it by the State Constitution. A charter city derives its powers directly from the State Constitution, subject to enactments of the legislature on matters of statewide concern. Attachment 2 includes a comparison of general law versus charter cities provided by the League of California Cities. A charter is a set of bylaws, which acts as a local constitution for the city. A charter may only be adopted, amended or repealed by a majority vote of the City's residents. The City of Arroyo Grande is currently a general law city. There are over 120 charter cities in California, which amounts to more than 25%. Attachment 2 provides a list of charter cities in California as of 2008. Process A city charter can be either initiated by a city council or by the public. 'The City council may directly place the proposed charter on the ballot- at a statewide generdl, statewide primary, or regularly scheduled municipal election. If the charter is proposed by the voters, the procedure is more cumbersome because two elections are required. The first election is necessary to establish a charter commission and the second to propose the actual charter. There are extensive special public hearing requirements to place a charter measure on the ballot. At least two public hearings must be held a minimum of 30 days apart, and the vote on whether to approve submission to the voters must be a minimum of 21 days after the second public hearing. Notice of each public hearing must be posted a minimum of 21 days prior to the meeting. The purpose of the first public hearing is to present a draft charter, obtain feedback regarding the proposed charter from the public and direction from the City Council. The Council can make changes to the proposed charter and decide not to proceed at any point in the process. In order to place the measure on the November ballot, the final public hearing will need to be held at the July loth meeting. Purpose The City is facing difficult challenges and is attempting to respond to changing economic conditions in a proactive manner. To do this requires a period of reform. Adopting a charter is an important corr~ponent of this reform effort because it will increase the City's flexibility and authority to determine the most cost effective approach to meeting the needs of the community. Agenda Item 9.a. Page 2 ClTY COUNCIL CONSIDERATION OF PROPOSED ClTY CHARTER BALLOT MEASURE JUNE 12,2012 PAGE 3 The California Constitution vests charter cities with authority over municipal affairs, significantly strengthening their home rule. There is no precise definition of the term "municipal affair." Whether a given activity is a municipal affair over which a charter city has sovereignty or a matter of statewide concern over which the legislature has authority is a question of law. A charter city has many options when considering how to handle municipal affairs. Activities which the courts have determined are municipal affairs include, but are not limited to, the following: 1. Construction and maintenance contracting; 2. Land use; 3. City finances; and 4. City government structure. By adopting a charter, the City will have far greater flexibility in the operations of its municipal government, which, if properly utilized, can translate to greater efficiency, effectiveness, cost savings, and innovation. Draft City Charter Provisions The majority of the provisions in the draft Charter consist of relatively standard language found in other charters throughout the State. Staff has intentionally attempted to keep the proposed Charter as simple and brief as possible. Set forth below is a summary of the key provisions in the draft Charter: Section 102. No Increased Power to Tax. This Section provides no additional authority to raise taxes and the City will continue to act in accordance with State law. This provision (as well as Section 204) is intended to eliminate any concerns by the public that adoption of a City Charter could lead to problems experienced by the City of Bell; special measures are recommended to specify that the Charter will not increase the power to tax by the City. Section 103. Zoning and General Plan Consistency. This provision requires that all City zoning must continue to be consistent with the General Plan, pursuant to State law, which has been added at the Council's direction at the last public hearing. Section 104. Powers Established by Ordinance. This Section prohibits the Council from changing the law unless the change is specifically described in the Charter or allowed under State law, which has been added at the Council's request at the last public hearing. Agenda Item 9.a. Page 3 CITY COUNCIL CONSIDERATION OF PROPOSED ClW CHARTER BALLOT MEASURE JUNE 12,2012 PAGE 4 Section 204. Council Member Compensation. The Council will continue to receive compensation pursuant to State law. This is also intended to eliminate problems experienced by the City of Bell. Section 205. Elections. Language addressing elections specifies that they will continue to be held in accordance with State Elections Code provisions applicable to general law cities, with one exception. The first draft provided the City Council with the ability to make changes by ordinance. The primary advantage of providing this flexibility was to enable the City to utilize a mail-in ballot if a special election ever became necessary in order to substantially reduce election costs. To eliminate concerns regarding significant changes to the City's election process, staff has recommended new and very specific language that provides the City with the ability to adopt an ordinance to conduct a mail-in ballot election only. No other changes to the current election policies can be made directly by the City Council by ordinance. It is important to note that over 60% of registered voters already receive their ballot by mail in Arroyo Grande. Therefore, if an election were held for only one measure, the cost of establishing polling places would be largely unnecessary. Alternative language is included in the draft Charter that requires all elections to be held pursuant to the State Elections Code applicable to general law cities. Council direction is necessary if it is determined that this language is preferable. Section 300. Economic and Community Development. With the elimination of redevelopment agencies, a charter may provide opportunities for future economic development efforts. This provision simply states the City's support for efforts to promote both economic development and preservation of the City's historic and small town character. Section 301. Public Works Contracts. This provision establishes the authority of the City to develop its own standards and procedures for bidding and awarding public works contracts. Section 302. Prevailing Wage. This Section provides the City with the option to forego State prevailing wage requirements when projects are funded entirely through local revenues. The prevailing wage rate is the basic hourly rate paid on public works projects to a majority of workers engaged in a particular craft, classification or type of work within the labor market area. If there is no single rate paid to a majority, then the single or modal rate being paid to the greater number of workers is prevailing. Arroyo Grande normally falls within the Southern California labor market requirements. Agenda Item 9.a. Page 4 CITY COUNCIL CONSIDERATION OF PROPOSED CITY CHARTER BALLOT MEASURE JUNE 12,2012 PAGE 5 It should be noted that there is a pending State Supreme Court case being considered that could impact this provision if it determines prevailing wage requirements are an issue of statewide concern. Staff anticipates this case will be decided prior to final consideration of placing the charter measure on the ballot. It is difficult to find recent detailed data or studies on the potential cost of State prevailing wage requirements. However, it is a generally accepted position among municipal agencies that costs increase anywhere from 5% to 30%, depending upon the amount and type of labor involved in a project. Staff surveyed all cities that have adopted charters since 2000. The majority of cities indicated that reducing construction costs was the primary purpose for the charter measure and they have experienced positive results. No negative feedback was received from cities regarding their experience with the charter since it has been in place. However, several cities have included provisions in their charters maintaining prevailing wage requirements due to opposition on this issue. The most conclusive information was provided by the City of Dinuba, which established a charter in 1994. They bid a water tower project as non-prevailing wage and the cost increased by over 14% after they received grant funding and had to modify the contract to meet prevailing wage requirements. Another contract was estimated at prevailing wage prior to the measure, but they later received a bid for almost 24% less under non-prevailing wage rates. Lastly, Dinuba hired a consultant to survey other cities that had incorporated non-prevailing wage provisions into their charters. According to a communication obtained from Dinuba staff, "he found most cities saw a savings of between 20% and 30% on public works projects." When the City of Costa Mesa proposed their charter measure, their staff prepared a cost analysis of upcoming projects. Projected savings varied from 2.4% to 15.4%, with an average of 6.7%. Information was received from the City of Palmdale, which ultimately excluded exerr~ption from prevailing wage from their charter due to opposition received. The employee preparing their analysis had previously worked as a contractor with experience in bidding prevailing wage and non-prevailing wage projects. He provided information that savings was consistently in the range of 12% - 15%, which primarily involved projects in Los Angeles County. Savings would be expected to be greater in San Luis Obispo County. Some cities, such as El Centro, have addressed concerns over prevailing wage requirements by adopting a "Living Wage" ordinance. This is a specified minimum wage based on the local cost of living. The El Centro ordinance requires employees of contractors to be paid wages a specified amount above minimum wage. They indicated that it has not affected the cost of their bids. Agenda Item 9.a. Page 5 ClTY COUNCIL CONSIDERATION OF PROPOSED ClTY CHARTER BALLOT MEASURE JUNE 12,2012 PAGE 6 Some jurisdictions have identified concerns with a reduction in quality of work when prevailing wage requirements are not used. While staff does not believe this would be a likely outcome, the City of Monterey addressed this issue by establishing prevailing wage requirements for more complex projects. Under a charter, the City would continue to be required to utilize prevailing wage requirements for any project that is fully or partially funded with State andlor Federal funds. Staff was requested to provide an analysis of how much historical project costs have involved State and Federal funding. Attachment 3 presents a summary of past construction costs from the last three fiscal years. Approximately 65% of constr~~ction costs involved use of State and Federal funds. Contract costs for street sweeping and landscaping maintenance are also included since they are subject to prevailing wage even though they appear to be more of an ongoing service than project. This is an important statistic towards addressing different objectives and concerns that have been identified. On the one hand, for those that are concerned about loss of prevailing wage rates, it demonstrates there will be no change to the majority of construction expenditures. On the other hand, for those concerned about efficiency, the data also shows that nearly $400,000 could have been saved over the past three years if a 15% cost savings factor is applied. There could be some increase in the future in the amount of expenditures that would be exempt from prevailing wage rates under a charter for two reasons. First, State and Federal funding assistance has now been drastically reduced. Second, discretionary State and Federal funds for street improvements have often been disbursed among eligible projects and could be consolidated to select projects in the future. However, it is projected that a significant majority of construction expenditures would remain subject to prevailing wage rates. Programmed funds for FY 2013-14 were reviewed and it is estimated that as much as $2.5 million could be exempt from prevailing wage rates. Therefore, savings could be as much as $375,000 based on a 15% costs savings factor. However, this savings would be reduced if additional grants are obtained andlor it is determined to apply prevailing wage requirements to certain projects. Section 303. Purchasing This Section allows the City to develop its own procedures for purchasing goods and services. Section 304. Public Financing This Section allows the City to develop its own procedures for financing public projects. Agenda Item 9.a. Page 6 CITYCOUNCIL CONSIDERATION OF PROPOSED CITY CHARTER BALLOT MEASURE JUNE 12,2012 PAGE 7 Section 305. Utility Franchises This Section allows the City to regulate utilities and utility franchises that use City streets. Section 306. Supporting Volunteers in Arroyo Grande State law inhibits the use of volunteers in some City projects and the State law exempting cities from paying volunteers prevailing wage will expire at the end of 2016. This provision exempts the City from State law regulating the use of volunteers and encourages the use of volunteers in community projects. Public Concerns In response to Council's request for more research on potential problems of a city charter, staff contacted cities that have recently proposed charters that were unsuccessful or those that are pending and have faced active opposition. Information was requested regarding what public concerns were identified during the election. The following is a list of the primary issues identified by opponents to the measure in each jurisdiction: Solvang (2006) Proposed change in the charter to go from a 2-year to 4-year term for Mayor. (The proposed term was then changed to 2-year and the measure passed the second time.) Rosemead (2008) Ability to circumvent State laws capping City Council salaries. No requirement for zoning code to be consistent with their general plan. Davis (2008) Discussion of a proposal for a real estate transfer tax by one council member. Broad charter that provided City Council too much leeway. Auburn (201 2) Potential costly lawsuits, elections and more special interests. Ability to increase City Council compensation. Ability to prohibit implementation of State laws that protect citizens. Ability to give taxpayer funds to individuals and organizations with no requirements. Ability to impose higher fines and penalties on taxpayers. Hiring of less qualified contractors. Charter Commissions In the last staff report, information was provided regarding the process used for citizen initiated charters, which require election of a charter commission to draft the Agenda Item 9.a. Page 7 ClTY COUNCIL CONSIDERATION OF PROPOSED ClTY CHARTER BALLOT MEASURE JUNE 12,2012 PAGE 8 charter for a subsequent vote. Staff was requested to provide additional information on use of comrr~issions to draft charters. Some cities have chosen to use appointed commissions or committees rather than those elected under the process described above. Under this process, the City Council may appoint a commission to present a recommended draft. The City Council maintains authority over approving the final charter to be placed on the ballot. Below is a summary of the use of commissions for cities that recently approved charter measures that responded to the City's request for information: Solvang (No) Santa Maria (No) Oceanside (No) Carlsbad (No) Victorville (No) Woodlake (Yes) El Centro (Yes) Davis (No) Palmdale (No) ALTERNATIVES: The following alternatives are provided for City Council consideration: 1. Direct staff to proceed with the process of placing the proposed measure on the ballot at the election to be held on November 6, 2012 to approve a City Charter; 2. Direct staff to include the alternative identified for the elections provision and proceed with the process; 3. Make other modifications and direct staff to proceed with the process; 4. Direct staff to take no further action on the charter measure; or 5. Provide staff other direction. ADVANTAGES: The following advantages have been identified: The City would no longer be subject to State prevailing wage requirements, which could result in significant savings to capital project costs and maintenance contracts, including street sweeping and landscaping services. This will also encourage local contractors to submit bids on these contracts. It better enables the City to adopt policies that provide preferences for local vendors and contractors. Volunteer organizations could utilize local contractors offering to provide work at reduced costs on community projects on City property. Agenda Item 9.a. Page 8 ClTY COUNCIL CONSIDERATION OF PROPOSED ClTY CHARTER BALLOT MEASURE JUNE 12,2012 PAGE 9 When cost effective, more work could be performed by City staff. The Public Contracts Code currently limits the work that can be performed by City staff. As a result, to reduce costs, a project could be built by City staff and supplemented with contract work for specialized tasks. While one of the disadvantages identified is the potential decrease in quality of work on projects in the absence of prevailing wage requirements, the opposite may be true in many cases because the City would have more authority to reject bidders due to lack of experience or poor performance records. Mail-in ballots could be used at a substantially reduced cost if a special election became necessary to address an issue that could not wait for the next general election. With the elimination of redevelopment, it may make possible new opportunities to create incentives for economic development that are not currently available. DISADVANTAGES: Staff believes most of the issues identified by opposition to measures in other jurisdictions have been addressed. The potential disadvantages of the proposed charter measure include the following: There is the potential that the absence of prevailing wage requirements could result in decreased quality of workers assigned. Charters proposed by some cities have been actively opposed by unions. Others have not. In cities where they were opposed, the opposition was often strong and involved significant expenditures. Since the City cannot use public resources to advocate for a ballot measure, any strong organized opposition would place the City at a significant disadvantage in obtaining approval by the voters. Staff does not have a good projection on the likelihood for success. The most recent measure proposed by a City was in the City of Auburn, which failed by over 65% of the vote on June 5Ih. The election and public education processes will require a significant amount of staff time, which would be wasted if unsuccessful. This is a concern given the staff time that has also been devoted to the Police Station and consolidation proposals with little results to show. A city charter increases the areas of authority that could be amended by a local initiative placed on the ballot by 15% of the City electorate. This could lead to special interest proposals, such as the binding arbitration requirements formerly adopted by the voters in San Luis Obispo. Binding arbitration requirements Agenda Item 9.a. Page 9 ClTY COUNCIL CONSIDERATION OF PROPOSED ClTY CHARTER BALLOT MEASURE JUNE 12,2012 PAGE 10 have been determined to be unconstitutional in General Law cities, but not charter cities. Such proposals could be supported by funding from interests outside the City. However, the ultimate authority lies with the voters of the City. Conversely, local initiatives can now be placed on the ballot with as few as 10% of the City electorate. Therefore, the charter could make it more difficult for the voters to make a change by initiative if it involved an item covered specifically in the charter. There were concerns identified in public comment at the last meeting regarding the impact on middle class income resulting from loss of prevailing wage requirements. While staff agrees protection of a strong middle class is an important national goal, staff questions whether prevailing wage requirements applied only to public agencies is an effective or fair solution to this issue. ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION AND COMMENTS: Pursuant to Government Code Section 34458(b), a Notice of Public Hearing was posted on May 22, 2012 at three (3) public places: City Hall, the Fire Cities Fire Authority, and the Elm Street Community CenterIRecreation and Maintenance Services Office. The Notice was also published in The Tribune on Friday, May 25, 2012 and Friday, June 1, 2012 and posted on the City's website. One correspondence was received, which is attached. Attachments: 1. Draft City Charter 2. General Law City v. Charter City 3. Summary of Construction Expenditures 4. Public Correspondence Agenda Item 9.a. Page 10 Attachment 1 CHARTER OF THE CITY OF ARROYO GRANDE ARTICLE I. MUNICIPAL AFFAIRS AR'I'ICLE II. FORM OF GOVERNMENT ARTICLE Ill. CONTRACTS, PUBLIC FINANCING AND FRANCHISES ARTICLE IV. REVENUE RETENTION ARTICLE V. GENERAL LAWS ARTICLE VI. INTERPRETATION PREAMBLE WE THE PEOPLE of the City of Arroyo Grande declare our intent to restore our community to the historic principles of self-governance inherent in the doctrine of home- rule. Sincerely comtrritted to the belief that local government has the closest affinity to the people governed, and firm in the conviction that the economic and fiscal independence of our local government will promote the health, safety and welfare of all the citizens of this City, we do hereby exercise the express right granted by the Constitution of the State of California to enact and adopt this Charter for the City of Arroyo Grande. ARTICLE I. MUNICIPAL AFFAIRS Section 100. Municipal Affairs. The City shall have full power and authority to adopt, make, exercise and enforce all legislation, laws, and regulations and to take all actions relating to municipal affairs, without limitation, which may be lawfully adopted, made, exercised, taken or enforced under the Constitution of the State of California. Without limiting in any manner the foregoing power and authority, each of the powers, rights, and responsibilities described in this Charter is hereby declared to be a municipal affair, the performance of which is urrique to the benefit and welfare of the citizens of the City of Arroyo Grande. Section 101. Incorporation and Succession. The City of Arroyo Grande, in the County of San Luis Obispo, State of California, shall continue to be a municipal corporation under its present name City of Arroyo Grande. The boundaries of the City of Arroyo Grande shall continue as now established until changed in the manner authorized by law. The City of Arroyo Grande shall remain vested with and shall continue to own, have, possess, control and enjoy all property, rights of property and rights of action of every nature and description owned, had, possessed, controlled or enjoyed by it at the time this Charter takes effect, and is hereby declared to be the successor of same. It shall be subject to all debts, obligations and liabilities, which exist against the municipality at the time this Charter takes effect. All lawful ordinances, Agenda Item 9.a. Page 11 Attachment 1 resolutions, rules and regulations, or portions thereof, in force at the time this Charter takes effect and not in conflict with or inconsistent herewith, are hereby continued in force until the same have been duly repealed, amended, changed or superseded by proper authority. Section 102. No Increased Power to Tax. This Charter shall not be interpreted as giving the City greater authority to raise the level of taxes or to create new taxes beyond the powers granted to general law cities nor to exempt the City from any procedures for raising the level of taxes or for creating new taxes required by the law applicable to general law cities. Section 103. Zoning and General Plan Consistency. Zoning shall continue to be to be consistent with the City's General Plan, pursuant to requirements of the State law applicable to general law cities. Section 104. Powers Established by Ordinance. The City Council may not establish by Ordinance any powers, rights, and responsibilities that are not either expressly described in this Charter or allowed by State law applicable to general law cities. ARTICLE II. FORM OF GOVERNMENT Section 200. Form of Government. The City shall continue to be governed under this Charter by a "Council-Manager" form of government. The City Council will establish the policy of the City and the City Manager will carry out that policy. Section 201. Elected Officials. The elective officers of the City of Arroyo Grande shall be a Mayor and four Council members each of whom, including the Mayor, shall have the right to vote on all questions conling before the Council. The minimum qualifications for these offices shall be as provided by law for general law cities and any vacancy in office shall be filled in the manner provided by that law. The Mayor shall be elected at the general municipal election from the City at large. 'The Council members shall be elected at the general municipal election from the City at large, two being selected biennially. The term of the Mayor shall be two years and the terms of the Council members shall be four years. Section 203. Mayor. Powers and Duties. The Mayor shall preside at all meetings of the City Council. As presiding officer of the Council the Mayor will faithfully corr~municate the will of the Council majority to the administrative ofFicers in matters of policy. The Mayor shall be recognized as the official head of the City for all ceremonial purposes. Section 204. Council Member Compensation. The salary of the Mayor and Council Members shall continue to be set pursuant to the State law applicable to general law cities. Section 205. Elections. The City Council may approve by ordinance use of a mail-in ballot for special elections. All elections shall be held in accordance with all other Agenda Item 9.a. Page 12 Attachment 1 provisions of the law applicable to general law cities. Section 205. Elections. All elections shall be held in accordance with the provisions of the law applicable to general law cities. ARTICLE Ill. CONTRACTS, PUBLIC FINANCING AND FRANCHISES Section 300. Economic and Community Development. The City shall encourage, support, and promote economic and community development and preserve and enhance the small-town and historic character of Arroyo Grande. Section 301. Public Works Contracts. Except as provided by ordinance or by agreement approved by the City Council, the City of Arroyo Grande, as a Charter City, is exempt from the provisions of the California Public Contract Code. The City shall have the power to establish standards, procedures, rules or regulations to regulate all aspects of the bidding, award and performance of any public works contract, including, but not limited to, the compensation rates to be paid for the performance of such work. The City shall have the power to accept gifts and donations, including donations of material and labor, in the construction of any public works project. The City shall have the power to perform any work of improvement by use of its own forces and is not required to contract for the construction of works of public improvement. The City may also contract with other public agencies for the construction of works of public improvement. Section 302. Prevailing Wage. No City contract shall require payment of the prevailing wage schedule unless: (i) the prevailing wage is legally required, and constitutionally permitted, to be imposed; (ii) required by Federal or State grants pursuant to Federal or State law; (iii) the City Council does not consider the project to be a municipal affair; or (iv) payment of the prevailing wage schedule is authorized by resolution of the City Council. Section 303. Purchasing. The City shall have the power to establish standards, procedures, rules or regulations related to the purchasing of goods, property, or services, including, but not limited to, the establishment of local preferences. Section 304. Public Financing. The City shall have the power to establish standards, procedures, rules or regulations related to any public financing. Section 305. Utility Franchises. The City shall have the power to adopt any ordinance providing for the acquisition, development, or operation by the City of any utility, or to Agenda Item 9.a. Page 13 Attachment 1 adopt any ordinance providing for the granting of a franchise to any utility not owned by the City which proposes to use or is using City streets, highways or other rights-of-way. Section 306. Supporting Volunteers in Arroyo Grande The City seeks to support volunteers in creating a higher quality of life for Arroyo Grande citizens and declares itself exempt from any State laws or regulations that would make it more difficult or expensive for volunteers in any community project, whether funded with City revenues or not. ARTICLE IV. REVENUE RETENTION Section 400. Reductions Prohibited. Any revenues raised and collected by the City shall not be subject to subtraction, retention, attachment, withdrawal or any other form of involuntary reduction by any other level of government. Section 401. Mandates Limited. No person, whether elected or appointed, acting on behalf of the City, shall be required to perform any function which is mandated by any other level of government, unless and until funds sufficient for the performance of such function are provided by said mandating authority. ARTICLE V. GENERAL LAWS Section 500. General Law Powers. In addition to the power and authority granted by the terms of this Charter and the Constitution of the State of California, the City shall have the power and authority to adopt, make, exercise and enforce all legislation, laws and regulations and to take all actions and to exercise any and all rights, powers, and privileges heretofore or hereafter established, granted or prescribed by any law of the State of California or by any other lawful authority. In the event of any conflict between the provisions of this Charter and the provisions of the general laws of the State of California, the provisions of this Charter shall control. ARTICLE VI. INTERPRETATION Section 600. Construction and Interpretation. The language contained in this Charter is intended to be permissive rather than conclusive or limiting and shall be liberally and broadly construed in favor of the exercise by the City of its power to govern with respect to any matter which is a municipal affair. Section 601. Severability. If any provision of this Charter should be held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, the remaining provisions shall remain enforceable to the fullest extent permitted by law. Agenda Item 9.a. Page 14 Attachment 1 Authentication And Certification Authenticated and certified to be a true copy by Mayor and City Clerk . Date of Municipal Election: ATTEST: Mayor City Clerk Agenda Item 9.a. Page 15 General Law City v. Charter City Attachment 2 . -. -. . -- -- - .-,- - .: - . - -. . . .. I-.:,:;->.;.:: - charier city: :, - 7. . '- . - . . . . -.A. -- . A-. - - .- Has supreme authority over "municipal affairs." Cal. Const. art. XI, 5 5(b). Charter can provide for any form of government including the "strong mayor," and "crty manager" forms. See Cal. Const. art. XI, 5 5(b); Cal. Gov't Code 5 34450 et seq. Not bound by the California Elections Code. May establish own election dates, rules, and procedures. See Cal. Const. art. XI, 5 5(b); Cal. Elec. Code 55 101 01 et seq.. May establish procedures for selecting officers. May hold at-large or district elections. See Cal. Const. art. XI, 5 5(b). Can establish own criteria for city office provided it does not violate the U.S. Constitution. Cal. Const. art. XI, 5 5(b), 82 Cal. Op. Att'y Gen. 6, 8 (1 999). . . -. - -.., .- -- " 9" :. , .,> .-- - - . , ,.. - . . :-:+; ;-:;. +Ctiaracter@tic-, 7.- . - I ---. - - Ability to Govern Municipal Affairs Form of Government Elections Generally Methods of Elections City Council Member Qualifications %_l- . -- ;- %I,.?... : ,- . .;:,>- ., - ,... ,;. - :-.:: : - ,- --.z , ,, . ,--... - .- - a .. . -- - . 4 :;-.- - ~~~~hi ~=iCi*+.<::. .:. ,;'-.: -- .. . .. , . , . - - - - - % --.. .-- .- _ ._ _ ..._._., Bound by the state's general law, regardless of whether the subject concerns a municipal affair. State law describes the city's form of government For example, Government Code section 36501 authorizes general law cities be governed by a city council of five members, a city clerk, a city treasurer, a police chief, a fire chief and any subordinate officers or employees as required by law. City electors may adopt ordinance which provides for a different number of council members. Cal. Gov't section 34871. The Government Code also authorizes the "city manager" form of government. Cal. Gov't Code 5 34851. Municipal elections conducted in accordance with the California Elections Code. Cal. Elec. Code 55 10101 et seq.. Generally holds at-large elections whereby voters vote for any candidate on the ballot. Cities may also choose to elect the city council "bf or "from" districts, so long as the election system has been established by ordinance and approved by the voters. Cal. Gov't Code 5 34871. Mayor may be elected by the city council or by vote of the people. Cal. Gov't Code 55 34902. Minimum qualifications are: 1. United States citizen 2. At least 18 years old 3. Registered voter 4. Resident of the city at least 15 days prior to the election and throughout his or her term 5. If elected by or from a district, be a resident of the geographical area comprising the district from which he or she is elected. Cal. Elec. Code 5 321; Cal. Gov't Code 55 34882, 36502; 87 Cal. Op. Att'y Gen. 30 (2004). Agenda Item 9.a. Page 16 Public Funds for Candidate in Municipal Elections Term Limits r Vacancies and Termination of Office Council Member Compensation and Expense Reimbursement Legislative Authority Resolutions Quorum and Voting Requirements No public officer shall expend and no candidate shall accept public money for the purpose of seeking elected office. Cal. Gov't Code § 85300. May provide for term limits. Cal. Gov't Code § 36502(b). An office becomes vacant in several instances including death, resignation, removal for failure to perform official duties, electorate irregularities, absence from meetings without permission, and upon non- residency. Cal. Gov't Code §§ 1770, 36502, 3651 3. Salary-ceiling is set by city population and salary increases set by state law except for compensation established by city electors. See Cal. Gov't Code § 36516. If a city provides any type of compensation or payment of expenses to council members, then all council members are required to have two hours of ethics training. See Cal. Gov't Code §§ 53234 - 53235. Ordinances may not be passed within five days of introduction unless they are urgency ordinances. Cal. Gov't Code § 36934. Ordinances may only be passed at a regular meeting, and must be read in full at time of introduction and passage except when, after reading the title, further reading is waived. Cal. Gov't Code § 36934. May establish rules regarding the procedures for adopting, amending or repealing resolutions. A majority of the city council constitutes a quorum for transaction of business. Cal. Gov't Code § 3681 0. All ordinances, resolutions, and orders for the payment of money require a recorded majoriiy vote of the total membership of the city council. Cat. Gov't Code § 36936. Specific legislation requires supermajority votes for certain actions. Public financing of election campaigns is lawful. Johnson v. Bradley, 4 Cal. 4th 389 (1 992). May provide for term limits. Cal. Const. art. XI, § 5(b); Cal Gov't Code Section 36502 (b). May establish criteria for vacating and terminating city offices so long as it does not violate the state and federal constitutions. Cal. Const. art. XI, § 5(b). May establish council members' salaries. See Cal. Const. art. XI, § 5(b). If a city provides any type of compensation or payment of expenses to council members, then all council members are required to have two hours of ethics training. See Cal. Gov't Code §§ 53234 - 53235. May establish procedures for enacting local ordinances. Bmugher v. Bd. of Public Wofks, 205 Cal. 426 (1928). May establish procedures for adopting, amending or repealing resolutions. Bmugher v. Bd. of Public Wofks, 205 Cal. 426 (1928). May establish own procedures and quorum requirements. However, certain legislation -equiring supermajority votes is applicable to :hatter cities. For example, see California :ode of Civil Procedure section 1245.240 -equiring a vote of two-thirds of all the nembers of the governing body unless a jreater vote is required by charter. Agenda Item 9.a. Page 17 . - , - - > ., :. I -- . - . . -. :=.- - .charter city.- -.-I . . -. Ralph Brown Act is applicable. Cal. GoVt Code §§ 54951, 54953(a). Conflict of interest laws are applicable. See Cal. Gov't Code § 87300 et seq.. May provide provisions related to ethics, conflicts, campaign financing and incompatibility of office. May establish standards, requirements, and procedures, including compensation, terms and conditions of employment for personnel. See Cal. Const. art. XI, § 5(b). Procedures set forth in Meyers-Milias-Brown Act (Cal. Gov't Code § 3500) apply, but note, 'mhere is a clear distinction between the substance of a public employee labor issue and the procedure by which it is resolved. Thus there is no question that 'salaries of local employees of a charter city constitute municipal affairs and are not subject to general laws.'" Voters for Responsible Retirement v. Board of Supervisors, 8 Cal.4th 765, 781 (1994). Cannot require employees be residents of the city, but can require them to reside within a reasonable and specific distance of their place of employment. Cal. Const. art. XI, section 1 O(b). Full authority to contract consistent with charter. May transfer some of its functions to the county including tax collection, assessment collection and sale of property for non- payment of taxes and assessments. Cal. Gov't Code §§ 51 330, 51 334, 51 335. . , - - . . - . . - - - : .-.- , :. : i: : ~haracteri~dc-:--: - - , .-- :. -. Rules Governing Procedure and Decorum Personnel Matters Contracting Services .. - .. - -- , -.:~_ .- .- . . -. --- . . . . . ,-- .; ' -:: .. '-- . . -. . ~enbrai~& . . - city .- - :: . - , - :.:-- .-=. . .- --- . . Ralph Brown Act is applicable. Cal. Gov't Code §§ 54951, 54953(a). Conflict of interest laws are applicable. See Cal. Gov't Code § 87300 et seq.. May establish standards, requirements and procedures for hiring personnel consistent with Government Code requirements. May have "civil service" system, which includes comprehensive procedures for recruitment, hiring, testing and promotion. See Cal. Gov't Code § 45000 et seq. Meyers-Milias-Brown Act applies. Cal. Gov't Code § 3500. Cannot require employees be residents of the city, but can require them to reside within a reasonable and specific distance of their place of employment. Cal. Const. art. XI, 5 1 O(b). Authority to enter into contracts to carry out necessary functions, including those expressly granted and those implied by necessity. See Cal. Gov't Code 5 371 03; Carruth v. City of Madera, 233 Cal. App. 2d 688 (1 965). Agenda Item 9.a. Page 18 -. - . , .:. .. -. a. ;---- dh=&r city , - L .. . ,.- --- - - - . - . . Not required to comply with bidding statutes provided the city charter or a city ordinance exempts the city from such statutes, and the subject matter of the bid constitutes a municipal affair. Pub. Cont. Code 5 1100.7; see R & A Vending Services, Inc. v. City of Los Angeles, 172 Cal. App. 3d 11 88 (1 985); Howard Contracting, Inc. v. G.A. MacDonald Constr. Co., 71 Cal. App. 4th 38 (1 998). Historically, charter cities have not been bound by state law prevailing-wage requirements so long as the project is a municipal affair, and not one funded by state or federal grants. Vial v. Crty of San Diego, 122 Cal. App. 3d 346, 348 (1981). However, there is a growing trend on the part of the courts and the Legislature to expand the applicability of prevailing wages to charter cities under an analysis that argues that the payment of prevailing wages is a matter of statewide concern. The California Supreme Court currently has before them a case that will provide the opportunity to decide whether prevailing wage is a municipal affair or whether it has become a matter of statewide concern. . . - _ .__ . 3-.z. . , c.tiaf&teiieti=; - - - , -.. - -- - - . ..-. Public Contracts . Payment of Prevailing Wages .. . . -- . - .i - -. . .- . , l. . ._ .-. .._ - - - - - " -..- -: ' ' .. ~~"~j~!:~~b. -. City: : ,.I --- ' - L --,.: - - .: -.., -2- Competitive bidding required for public works contracts over $5,000. Cal. Pub. Cont. Code 5 20162. Such contracts must be awarded to the lowest responsible bidder. Pub. Cont. Code 5 20162. If city elects subject itself to uniform construction accounting procedures, less formal procedures may be available for contracts less than $100,000. See Cal. Pub. Cont. Code 55 22000,22032. Contracts for professional services such as private architectural, landscape architectural, engineering, environmental, land surveying, or construction management firms need not be competitively bid, but must be awarded on basis of demonstrated competence and professional qualifications necessary for the satisfactory performance of services. Cal. Gov't Code 5 4526. In general, prevailing wages must be paid on public works projects over $1,000. Cal. Lab. Code 5 1771. Higher thresholds apply ($15,000 or $25,000) if the public entity has adopted a special labor compliance program. See Cal. Labor Code 5 1771.5(a)-(c). Agenda Item 9.a. Page 19 .:.: . . J. characteristic. - . - . . . .- - Finance and Taxing Power Streets 8 Sidewalks Penalties 8 Cost Recovery . , - -- . . ,----. .- - _ - .- . . , . , . -. . ,.-.17 - ~eneral caw .city: ..I: .: , .- I- .- -*. . . -7 - . May impose the same kinds of taxes and assessment as charter cities. See Cal. Gov't Code § 37100.5. Imposition of taxes and assessments subject to Proposition 218. Cal. Const. art.XIIIC. Examples of common forms used in assessment district financing include: lmprovement Act of 191 1. Cal. Sts. & High. Code § 22500 et seq.. Municipal lmprovement Act of 1913. See Cal. Sts. & High. Code §§ 10000 et seq.. Improvement Bond Act of 191 5, Gal. sts. & High. Code cjcj 8500 et seq., Landscaping and Lighting Act of 1972. Cal. Sts. & High. Code §§ 22500 et seq.. Benefit Assessment Act of 1982. Gal. Gov't Code €j€j 54703 et seq.. May impose business license taxes for regulatory purposes, revenue purposes, or both. See Cal. Gov't Code § 37101. May not impose real property transfer tax. See Cal. Const. art. XIIIA, § 4; Cal. Gov't Code § 53725; but see authority to impose documentary transfer taxes under certain circumstances. Cal. Rev. & Tax. Code § I I91 l(a), (c). State has preempted entire field of traffic control. Cal. Veh. Code § 21. May impose fines, penalties and forfeitures, with a fine not exceeding $1,000. Cal. Gov't Code § 36901. -. . . - . . .-2 . . .. . . .chart=i'.city .- - .- . . -. ~ave the power to tax. Have broader assessment powers than a general law city, as well as taxation power as determined on a case-by case basis. lmposition of taxes and assessments subject to Proposition 218, Cal. Const. art. XIIIC, § 2, and own charter limitations May proceed under a general assessment law, or enact local assessment laws and then elect to proceed under the local law. See J. W. Jones Companies v. City of San Diego, 157 Cal. App. 3d 745 (1 984). May impose business license taxes for any purpose unless limited by state Or federal constitutions, or city charter. See Cal. Const. art. XI, § 5. May impose real property transfer tax; does not violate either Cal. Const art. XlllA or California Government Code section 53725. See Cohn v. City of Oakland, 223 Cal. App. 3d 261 (1990); Fielderv. City of Los Angeles, 14 Cal. App. 4th 137 (1 993). State has preempted entire field of traffic control. Cal. Veh. Code § 21. May enact ordinances providing for various penalties so long as such penalties do not exceed any maximum limits set by the charter. County of Los Angeles v. City of Los Angeles, 21 9 Cal. App. 2d 838, 844 (1 963). Agenda Item 9.a. Page 20 -. - -= : . chartercity. : '' - , .. .. . - :i . .. .a - - .. May establish, purchase, and operate public works to furnish its inhabitants with electric power. See Cal. Const. art. XI, § 9(a); Cal. Apartment Ass'n v. City of Stockton, 80 Cal. App. 4th 699 (2000). May establish conditions and regulations on the granting of franchises to use city streets to persons or corporations seeking to furnish light, water, power, heat, transportation or communication services in the city. Franchise Act of 1937 is not applicable if charter provides. Cal. Pub. Util. Code § 6205. Zoning ordinances are not required to be consistent with general plan unless the city has adopted a consistency requirement by charter or ordinance. Cal. Gov't. Code § 65803. . . ...... -- . . - . . Characteristjc - .. - , :r7. . . ; . . . . - . . . - Public UtilitieslFranchises Zoning . . - -. . . . - .. .. : ~e,nera! ~aw ~iiy =--I -:'--:.' - -: . .a -I- ... -_ ., . - . . . May establish, purchase, and operate public works to furnish its inhabitants with electric power. See Cal. Const. art. XI, § 9(a); Cal. Gov't Code § 39732; Cal. Pub. Util. Code § 10002. May grant franchises to persons or corporations seeking to furnish light, water, power, heat, transportation or communication services in the city to allow use ofcity streets for such purposes. The grant of franchises can be done through a bidding process, under the Broughton Act, Cal. Pub. Util. Code §§ 60014092, or without a bidding process under the Franchise Act of 1937, Cal. Pub. Util. Code §§ 62014302. Zoning ordinances must be consistent with general plan. Cal. Gov't Code § 65860. Agenda Item 9.a. Page 21 Attachment 3 City of Arroyo Grande FY 200911 0 - FY 201 211 3 Summary of Construction Expenditures All Local Fundinq Corporation Yard Repairs Le Point Street Parking Lot City Hall Parking Lot Bioswale Porter Field Backstop Replacement Heritage Square Park lmprovements Sidewalk Replacement Traffic Way Streetscape Fair Oaks Traffic Signal Pearwood Avenue Overlay Short Street Narrowing Myrtle Street Resurfacing Newsom Springs Drainage Soto Pond Fence Replacement Fair Oaks Sewer Upgrade Reservoir No. 6 Construction Oro Booster Station Upgrade Water Well #10 Total Use of State and/or Federal Funding Centennial Park City Hall Expansion Short Street Bathroom Upgrade Park lmprovements ADA lmprovements Pavement Management El Camino Rehabilitation Sidewalk Replacement and ADA Ramps Orchard Street and Adjacent Streets Paulding School Area Sidewalks West Branch Resurfacing Tally Ho Sidewalks Total Agenda Item 9.a. Page 22 Attachment 4 Steve Adams From: Sent: To: Cc: Subject: lantsberg@gmail.com on behalf of Alex Lantsberg-SMART CITIES PREVAIL [alantsberg@smartcitiesprevail.org] Tuesday, May 01,201 2 11 :31 AM Tony Ferrara; Steve Adams Kelly Wetmore RE: Proposed Charter as means to save on Public Works costs Mr. Tony Ferrara, Mayor Mr. Steven Adams, City Manager 300 East Branch Street Arroyo Grande, CA 93420 Dear Mayor Ferrara and Mr. Adams, I am a Research Analyst with Smart Cities Prevail, a non-profit organization dedicated to illustrating the benefits of prevailing wages to local economies, taxpayers, and workers. I have read reports of discussions in the City of Arroyo Grande where City officials have indicated that elimination of prevailing wages could result in savings of up to 20% for municipal public works projects. I am writing to both set the record straight and offer SCP as a resource for information about prevailing wages, public works, and construction economics in general. To begin, the claim that elimination of prevailing wages results in cost savings has been thoroughly debunked in a variety of authoritative studies by academic economists and government agencies. Because direct construction labor typically comprises less than a quarter of a total project's cost, the types of savings often claimed by prevailing wage opponents are simply impossible to achieve. In fact, what we've seen over the past several years is that public works construction prices have come down dramatically due to the dramatic shrinkage of demand for construction services. SCP believes that prevailing wages are an indispensable element of a good public works program. Given that public works projects have precision engineering and design elements that cannot be executed by unskilled construction crews, prevailing wages help to attract skilled contractors and ensure quality construction that is completed on time and on budget. Don't just take our word for it; elected and appointed officials and construction professionals throughout California have reached the same conclusions, and we encourage you to follow those links and watch the videos. In addition to these testimonials, we also encourage you to investigate for yourself the ongoing problems in Oceanside and Palo Alto. Agenda Item 9.a. Page 23 Smart Cities Prevail would be delighted to discuss this matter further with yourselves, your staff, and Arroyo Grande's elected officials. We are committed getting the facts out there and will make ourselves available at your convenience. Please do not hesitate to contact me. Sincerely Alex Lantsberg Research Analyst (91 6) 259-3727 Agenda Item 9.a. Page 24