Item No. 3
Town of Atherton
CITY COUNCIL STAFF REPORT – STUDY SESSION
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: GEORGE RODERICKS, CITY MANAGER
DATE: JUNE 5, 2024
SUBJECT: DISCUSSION OF CHARTER CITY STATUS
RECOMMENDATION
It is recommended that the Council review and discuss the pursuit of Charter City status and provide direction to staff.
BACKGROUND
Cities generally obtain their powers from the California Constitution, which provides that "a city may make and enforce within its limits all local, police, sanitary and other ordinances and regulations not in conflict with general laws." This is commonly known as the "police power." A city's police power may be preempted by federal or state laws.
There are two types of cities in California: general law cities and charter cities. General law must comply with the constitution and all state laws. A charter city's power comes from the constitution, however, this power is also limited by the charter itself and may only extend to matters concerning municipal affairs. A charter is a voter approved document and may only be amended by voter approval.
Atherton is a general law city. General Law cities are bound by the State’s general law, even with respect to municipal affairs. As of 2020, of California’s 482 cities, 125 are charter cities (most large – but some small).
ANALYSIS
In early 2015, the City Council discussed a Report from a Council Subcommittee discussing the pros and cons of becoming a charter city. That Report is attached as Attachment 1. Following discussion, the Council declined to move forward with pursuit of becoming a charter city.
Consideration was raised again in 2017 during discussions of revenue alternatives as a charter city can pursue a property transfer tax. Again, following discussion, the Council ultimately decided not to pursue a transition to charter city.
Charter City Discussion and Direction
JUNE 5, 2024
The attached 2015 Staff Report and Memorandum outlines the various pros and cons of becoming a charter city. Also attached is a Handout from the League of California Cities (Attachment 2) and a General Information Workbook on Charter Cities (Attachment 3). These provide a general overview of the various issues over which charter cities govern.
However, while charter cities have retained local control in many areas – municipal election matters, procedures for adopting ordinances, compensation of local officials, local contracting and finance, term limits, some land use and zoning decisions, etc. – there are many areas that have been eroded by the State. In these areas, the State has usurped local control by deeming issues “matters of Statewide concern”. These include vehicle and traffic regulation, licensing of trades and professions, school systems, open and public meetings, the power of eminent domain, tort claims, etc. – but most recently, the issue of surplus lands has been declared to be matters of statewide importance and therefore applicable to charter cities For Atherton, because the Town is nearly 100% residential, single-family, the Town’s most important issue for local control is land use and zoning. While the other areas of local control (elections, term limits, finance, contracting, etc.) are important, the Town and State are generally aligned within the State's regulatory framework. The current 6th Cycle Housing Element Update has placed the Town at odds with the State’s affordable housing priorities as it forces the Town to reconsider its single-family residential zoning and 1-acre parcels to conform to the State’s vision for addressing affordable housing needs throughout the region and the State. Instead of leaving the solution to local control, the State is imposing land use and zoning directives through the adoption of State law that applies to all jurisdictions regardless of their status of general law or charter. By deeming the law “matters of Statewide concern” and adopting the appropriate findings thereto, the State has eroded local control and weakened the Town’s escape hatch to the imposition of State regulation in the land use and zoning arena.
However, recently a few jurisdictions in southern California challenged the State’s imposition of Senate Bill 9 (SB 9) to charter cities. The legal rationale was that although the State deemed adoption of SB 9 a matter of Statewide concern with respect to affordable housing, it failed to make the requisite findings connecting SB 9 to affordable housing objectives making it applicable to charter cities. The legal win only applies to those small number of charter city jurisdictions in the legal challenge; however, through appeal, the judgment could either be affirmed for all charter cities or denied and made applicable to charter cities within the second district court of appeal, but likely persuasive in the first district, where Atherton lays. Additionally, the State could opt to adopt a legislative fix and make the requisite findings required to make it applicable to charter cities going around the legal challenge. In any event, either solution would likely not occur before the Town's due date for its Housing Element submittal.
This decision has prompted a return of discussion of the value of becoming a charter city. The item is on today’s agenda to allow the Council the opportunity to discuss and provide direction to staff regarding pursuit of becoming a charter city.
Attachment 4 is the Government Code section(s) related to becoming a charter city. It brief, the process – if pursued by the City Council – is the conduct of noticed public hearings and submission to the electorate at a General Municipal Election (GME). There is insufficient time to bring the issue to the voters at the 2024 GME. However, if the Council is desirous of pursuing the issue, it Charter City Discussion and Direction
JUNE 5, 2024
could be raised for the 2026 GME. Charters can be simplistic (as shown in Attachment 5) or far more detailed (such as the draft charter from the Council Subcommittee in 2013 – Attachment 6).
Much like with General Plans, when adopting local law, the Town would need to ensure that anything adopted is consistent with not only the General Plan but also any Charter provisions enacted by the Town. Any modifications (large or small) to a local charter are required to be sent to the electorate. Each municipal election can cost between $15,000 and $40,000 depending on the number of election jurisdictions participating in the GME and the number of measures.
The Town uses the provisions of SB 9 to account for 48 of the 348 total units produced for the 6th Cycle Housing Element Regional Housing Needs Allocation (RHNA). If the Town were to become a charter city and SB 9 remained inapplicable to charter cities, the Town would need to specifically address consideration of the land use measure via a local ordinance or identify a source to produce an additional 48 units for the 6th Cycle Housing Element RHNA.
As noted above, the final resolution of SB 9’s applicability to all charter cities is still undetermined.
The State has not yet advised that they will appeal and the legislature has not yet proposed a legislative fix. It is anticipated that the SB 9 issue will resolve one way or the other before 2026.
Consideration of becoming a charter city solely on the basis of not allowing SB 9 to apply locally may not be worthwhile.
FISCAL IMPACT
None at this time.
GOAL ALIGNMENT
This Report and its contents are in alignment with the following Council Policy Goals:
• Goal Area F – Be Forward-Thinking, Well-Managed, and Well-Planned
POLICY FOCUS
Council Policy Focus is on the pros and cons of consideration of charter city status.
PUBLIC NOTICE
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately 1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders –to include, but be not limited to, media outlets, school districts, Menlo Park Fire Protection District, service provides (water, power, and sewer), and regional elected officials.
COMMISSION/COMMITTEE FEEDBACK/REFERRAL
This item has not been before a Town Committee or Commission Charter City Discussion and Direction
JUNE 5, 2024
ATTACHMENTS
Attachment 1 – 2015 Staff Report
Attachment 2 – California League of Cities Primer on Charter Cities Attachment 3 – Foundational Aspects of Charter Cities
Attachment 4 – Government Code 34450 – Charter Cities
Attachment 5 – Draft Simple Charter
Attachment 6 – Council Subcommittee Charter 2013