Leggo My Home Rule: Charter Cities and State Municipal Interference

• Jurisdiction: California,United States
• Author: By Catherine Ferguson*
• Publication year: 2014
• Citation: Vol. 37 No. 4

Leggo My Home Rule: Charter Cities and State Municipal Interference

By Catherine Ferguson*

I. INTRODUCTION

Eyes are focused on the San Diego Superior Court as it gets set to hear the most recent case regarding the power of California Charter Cities and the hotly debated Senate Bill 7 ("SB 7"). SB 7 gave the State the authority to deny funding to charter cities that refuse to comply with the State's prevailing wage for construction projects funded by local taxpayer money. The bill was passed in reaction to the Supreme Court striking down the State's attempt to force cities to comply through direct legislation. Charter cities across the state are challenging the bill as violating the California Constitution's guarantee that charter cities can run their own municipal affairs. Supported by the League of California Cities, approximately 12 charter cities, including the named cities of El Centro, Carlsbad, El Cajon, Fresno, Oceanside, and Vista are suing the State to have the bill struck down.

The current proceedings are comparable to litigation between the federal government and the states regarding Congress' taxing and spending powers. The State and cities will likely look to the rulings that came out of those cases regarding the policies distinguishing financial coercion from financial motivation. This article will explore the foundation of charter cities in the state Constitution, the history of SB 7, and possible parallels to similar federal cases in order to predict possible outcomes of the litigation.

A. Power of Charter Cities as Established in the California Constitution

California cities are given the right to charter their own laws under Article XI, section 5(a) of the State constitution. The clause states that charter cities can make and enforce all ordinances and regulations in respect to their municipal affairs, subject only to restrictions provided in their charters and in respect to general laws.¹ The constitution also provides that city charters shall supersede all law inconsistent with said charters except those that are of statewide concern.² The issues in the litigation concerning SB 7 revolve around whether prevailing wage is a statewide concern that is strong enough to overcome the charter cities' home rule powers.

The "home rule doctrine" is the concept that a charter city has autonomous rule over municipal affairs, subject only to conflicting provisions in the federal and state constitution and to preemptive state law.³ Courts use the Bradley Test to determine whether a law falls under this authority. Under this test, the court must find 1) that the charter city's interest is in a municipal affair, 2) whether there is an actual conflict, and 3) whether the issue is one of statewide concern.⁴

In the court decisions preceding SB 7, the California Supreme Court ruled that the State's prevailing wage law was not a statewide issue that could overcome the charter cities' interest in their municipal affairs.⁵

B. Prevailing Wage Litigation and Senate Bill 7

In 1931, California enacted the State's prevailing wage law requiring contractors on public works projects to pay their workers the general prevailing wage.⁶ Prevailing wage is defined as the hourly wage, benefits, and overtime paid to workers within a certain area.⁷ Prevailing wage laws were passed in order to prevent government contractors from evading local labor market conditions by bringing labor in from cheaper areas.⁸

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In 2012, the city of Vista prevailed in litigation which decided whether the State's prevailing wage law applied to charter cities. In that case, the State Building and Construction Trades Council of California, AFL-CIO (the Union) sued the city insisting that it pay the State's prevailing wage.⁹ The court looked to the constitution which authorizes charter cities "to govern themselves, free of legislative intrusion, as to those matters deemed municipal affairs."¹⁰ Vista argued that cities know best what they need and should have the exclusive right to enact legislation with regards to "municipal affairs."¹¹ It argued that prevailing wage was not a statewide concern and therefore fell outside of the state's authority to overrule the city's charter.¹²

The Court concluded that a city's decisions regarding the level of wages to pay the workers on city-funded public works projects was "certainly" a municipal affair and that the State's prevailing wage law conflicted with a city law which provided that prevailing wage requirements would not apply to such projects.¹³ The court stated, "we can think of nothing that is of greater municipal concern than how a city's tax dollars will be spent, nor anything which could be of less interest to taxpayers of other jurisdictions."¹⁴

The court also ruled that prevailing wage was not a matter of statewide concern that overcame the city's home rule authority explaining that, "[a]utonomy with regard to the expenditure of public funds lies at the heart of what it means to be an independent governmental entity."¹⁵ The court emphasized that it was the wholly local nature of the issue that forbade the State's interference in the city's governance.¹⁶ The city has a right to self-autonomy when it comes to municipal affairs that are purely local; therefore, the State had no grounds to overrule the charter.

In response to the court's decision, the California legislature passed SB 7 which provides that a charter city is ineligible to receive state funding on a construction project if either: a) the city has a charter provision or ordinance that authorizes a contractor not to pay prevailing wages or b) the city has awarded, within the past two years, a public works contract without requiring the...