Proposed Charter City Measure: Frequently Asked Questions

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1 Proposed Charter City Measure: Frequently Asked Questions The City of Rancho Palos Verdes is currently a general law city. The Rancho Palos Verdes City Council voted to hold a special election on March 8, 2011 to ask voters whether it should become a charter city. Below are several frequently asked questions in this regard. For more information, please call the City Manager s Office at (310) Q: What is the difference between a general law city and a charter city? A: There are two types of cities in California charter and general law. Charter cities follow the laws set forth in the State s Constitution along with their own charter document regarding municipal affairs. General law cities follow the State Constitution and the laws passed by the Legislature. The essential difference between the two types of cities is that having a charter gives cities more local authority over municipal affairs. Charter cities are able to customize operations to meet the unique needs of their community, while general law cities are dependent on the State Legislature for their power. Q: What is a city charter, and how is one adopted? A: A city charter is a unique document that acts like a constitution for the city adopting it. It can only be adopted, amended or repealed by a majority vote of a city s voters. This puts more control in the hands of the residents instead of State legislators and gives a community greater independence to determine its own destiny. Q: Why is Rancho Palos Verdes considering becoming a charter city? A: The Rancho Palos Verdes City Council unanimously voted to hold a special election on March 8, 2011, to ask voters whether it should become a charter city. The Council believes that becoming a charter city is the best way to gain the maximum amount of local control for the City. The Council also believes the City could save millions of dollars on upcoming capital improvement projects if it becomes a charter city. Q: How have other cities benefitted from becoming charter cities? A: Charter cities have more control over their use of funds because they do not have to follow many State-required procedures that are costly, such as procedures for bidding on public works projects, and thus they have saved large amounts of local funds. Additionally, charter cities are able to pass ordinances that work better for their communities, such as streamlined elections procedures, and thus they are able to better tailor their procedures and ordinances to their particular needs.

2 Q: What other cities are charter cities? A: Of the 481 cities listed with the League of California Cities, 120 of them are charter cities. In Los Angeles County, current charter cities include Alhambra, Burbank, Cerritos, Culver City, Downey, Glendale, Long Beach, Los Angeles, Pasadena, Redondo Beach, Santa Monica, and Torrance. Q: Are any of the other Peninsula cities planning to adopt a city charter? A: Not to our knowledge. Q: If becoming a charter city provides more control, then why haven t all California cities adopted charters? A: In some cases, cities do not have unique enough needs for a charter. Some cities may operate just fine under the power of the Legislature. However, as some cities develop and grow and become more sophisticated, they typically require an operating platform that allows them to tailor their activities to the specific needs of the community. In addition, placing a charter proposal on the ballot has a fiscal impact on a city. In some cases the cost of the ballot measure does not outweigh the benefits derived from a charter; in that case, there is no particular reason for a city to change its operating platform. In Rancho Palos Verdes case, the estimated cost of the ballot measure ($70,000 to $90,000) would be significantly less than the estimated fiscal benefit of becoming a charter city (millions would be saved on the City s planned capital improvement projects alone). Q: Are there disadvantages to becoming a charter city? A: Although the fiscal benefits of becoming a charter city will far exceed the costs of placing a charter proposal on the ballot, the City does still have to pay for this ballot measure. Additionally, if the voters decide to approve the charter, there will be a transition period while the City determines what changes would most benefit the community. Any changes to the Municipal Code as a result of chartering would have to be adopted at a duly noticed City Council meeting and would be reflected on the agenda for that meeting. Q: If the charter is approved in March, when will it go into effect? A: If the voters approve the charter by a simple majority in March, the charter will go into effect once election results have been certified and a copy of the approved charter is filed and accepted by the Secretary of State. It is anticipated that this will happen within thirty days of the election. Q: What are the restrictions on a charter city s power? 2

3 A: Charter cities are subject to restrictions in the federal Constitution, federal laws, the California Constitution, and State laws that regulate matters of statewide concern, such as criminal laws in the California Penal Code, the state s open meeting law (the Brown Act), the California Environmental Quality Act and vehicular laws in the Vehicle Code. Q: Are there specific constraints in the proposed Charter? A: The proposed Rancho Palos Verdes Charter constrains the City in four areas. First, Councilmember compensation and expenses will continue to be restricted to the same degree as they are for general law cities. In addition, the Charter memorializes the City s current policy of not providing additional compensation to City Council Members for attending meetings of commissions or committees that are related to the City. Second, staff compensation must continue to be approved in a transparent manner at duly noticed City Council meetings. Third, the City must comply with State laws regarding the prohibition against gifts of public funds. Fourth, the requirement that the zoning ordinance of a general law city must be consistent with its general plan will continue to apply to the City. Q: Why does the Charter restrict Councilmember compensation but not City staff compensation? A: State law restricts Councilmember compensation in a general law city to a particular amount based on the city s population. The proposed Rancho Palos Verdes Charter requires the City to continue to adhere to these restrictions. There are no parallel State law restrictions on staff compensation. However, the proposed Charter mandates that staff compensation shall continue to be determined in a transparent manner at duly noticed City Council meetings. Q: Why was the Charter adopted by the Council rather than by a committee? A: The Council adopted this Charter in order to expedite the process to take advantage of cost savings as soon as possible. Additionally, the Council did not want this Charter election politicized by Council candidates and thus placed the charter on the ballot independently of the upcoming Council elections. However, the Charter was considered and revised in a series of public City Council meetings. The input of residents was critical to this process, and comments from residents were incorporated into the Charter. Q: What are prevailing wages? How is the prevailing wage requirement impacted by becoming a charter city? A: Prevailing wages are the per diem wages set by the California Department of Industrial Relations. Prevailing wages are significantly higher than industry standard wages. It is commonly estimated that paying prevailing wages adds between 20 and 40 percent to the cost of labor on a public works project. The cost of labor varies with each individual project, but an average labor component of 40 percent of the total cost of a project would be a reasonable estimate. 3

4 Charter cities historically have not paid prevailing wages on city-funded projects unless they chose to do so, whereas general law cities must pay prevailing wages for most public works contracts over $1,000. Prevailing wage requirements continue to apply to projects funded with federal, state, or redevelopment money. There is a case currently pending in the California Supreme Court on the issue of whether charter cities must pay prevailing wages, so the state of the law may change. As of December 1, 2010, there has been no decision in this case, and thus charter cities may continue to opt out of paying prevailing wages and thereby save significant taxpayer dollars on their locally-funded public works projects. Q: What is design-build contracting? How does becoming a charter city impact the City s ability to use this tool? A: The design-build process allows a city to contract with a single entity that both designs and constructs a public works project, rather than a city separately soliciting proposals from an architect or engineer to design the project and then to solicit bids for a contractor to construct that project. This enables faster delivery, eliminates redundancies, reduces risk, and saves costs. Until 2016 (unless the Legislature chooses to extend this date), general law cities may enter into certain design-build contracts for building construction projects in excess of $1,000,000. Charter cities may enter into any design-build contracts unless they are restricted from doing so by their charters or ordinances. Q: How does becoming a charter city help save the City money? A: Charter cities have greater flexibility when it comes to contracting public works projects. General law cities must competitively bid any public works project over $5,000. This process can be expensive and can delay projects from moving forward. The longer it takes for projects to move forward, the more expensive projects typically become due to rising costs for materials. Charter cities can also utilize design-build contracts to save significant amounts of money. It is anticipated that Rancho Palos Verdes will spend millions of dollars on public works capital improvement projects over the next few years, and could save enormous amounts as a charter city on these projects alone because of the cost difference between prevailing wages and industry standard wages. Tax dollars will stretch further on public works projects, giving residents more value for each dollar spent. This type of savings applies to other public works projects as well, not just capital improvement projects. Becoming a charter city would allow the payment of standard industry wages instead of prevailing wages for items like carpentry, cement masonry, electrical work, landscaping, painting, plumbing, roofing and street sweeping. Q: Does this measure cost money to put on the ballot? A: It is estimated that there is a cost of $70,000 to $90,000 to put the measure on the ballot, which is outweighed by the potential cost savings of several million dollars (in labor costs) on 4

5 the capital improvement projects alone, not to mention ongoing savings on other public works projects. Q: Will changing to a charter city cost residents money? A: Changing to a charter city will not cost residents more money, and there are no additional taxes resulting from changing to a charter city. Q: Does becoming a charter city impact the City s ability to raise taxes? A: No, general law cities and charter cities may levy the same taxes, and having a charter does not increase the City s ability to raise or impose taxes. In either case, the California Constitution mandates that new taxes be approved by the City s voters. Q: A general law city must allow local initiatives that, if passed, become ordinances of the city and have the same effect as if they were passed by the city council. Must a charter city likewise allow local initiatives? A: Yes, the people s right to pass initiatives is derived from the California Constitution and cannot be altered by a charter. Thus, charter cities may make some procedural changes, such as listing different time requirements than those required by the California Elections Code, but charter cities must allow for local initiatives. Q: Will becoming a charter city streamline City processes? A: Becoming a charter city could streamline City processes, depending on what ordinances are adopted. Ordinances could be adopted to streamline the processes of passing future ordinances, conducting elections, or public bidding, for example. Q: What is the process for adopting an ordinance? A: With the exception of urgency ordinances, an ordinance of a general law city requires two readings before the city council votes to pass it into law. Such an ordinance becomes effective on the thirty-first day after adoption. A charter city may change this process by adopting a new procedure for passing ordinances. For example, a charter city may only require one reading of an ordinance or reduce the waiting period for the ordinance to become effective. Q: Will adopting a city charter prevent the City from hiring union members for capital improvement projects? A: No, union contractors may still bid for City projects. The City will look at the cost of what it takes to get the job done and base its hiring decision on that, along with contractor qualifications. Becoming a charter city does not rule out contracting with unions. Q: Will this change the City s current Council-Manager form of government? 5

6 A: While some charter cities have what is known as a Strong Mayor form of government, the proposed Rancho Palos Verdes Charter would preserve the City s current form of government, which is known as the Council-Manager form. 6