STAFF REPORT
Meeting Date:
April 28, 2026
NON APPEAL
17 SUBJECT: FIRST PUBLIC HEARING PURSUANT TO GOVERNMENT CODE SECTION 34458 REGARDING A POTENTIAL CITY CHARTER
RECOMMENDATION: It is recommended that the City Council:
1. Open the public hearing and receive a report regarding a possible City Charter; and
2. Provide direction to staff regarding next steps, including on whether to schedule a second public hearing on the draft City Charter, in compliance with Government Code § 34458.
SUMMARY OF THE MATTER
At the City Council's January 30, 2026, Strategic Planning session, the City Council discussed briefly whether the City should move from being a general law city to a charter city. The City Attorney's Office prepared a memorandum (attached as Attachment 1) that generally outlines the steps in this process, as well as some of the pros and cons associated with general law and charter cities. At the City Council’s February 10, 2026, meeting, the City Council received a report on the City Charter discussion and directed staff to return at a future date with a more robust discussion on certain more discrete topics and possible options for a City Charter.
In summary, general law cities, like the City of Laguna Beach (“City”), must follow the State of California's (“State”) laws regarding city operations. Charter cities, however, can carve out certain types of functions, programs, and processes and make them unique to their community. These can include service delivery methods, procurement methods, and election-related processes. However, certain areas of law like Brown Act compliance, conflict-of-interest laws, and streets and sidewalks would remain governed by State law.
As the City Manager has previously discussed, becoming a charter city could enable more cost savings and efficiencies in delivering City services. For example, only charter cities can contract out parking ticket enforcement, due to existing State law. The City Manager also has discussed different models of providing certain maintenance services, which could increase flexibility and cost savings via a mix of City staffdelivered maintenance and contracted maintenance.
Pursuant to Government Code section 34458, the consideration of a city charter has a unique, statutorily prescribed procedure that must be undertaken before the charter can be considered for placement on the ballot. More specifically, unlike other ballot measures, a city charter must go through a dual public hearing process, with specific noticing requirements and the hearings being held at least 30 days apart.1 To ensure compliance with this process in the event the City Council ultimately determines to consider a city charter for placement on the ballot, and given the upcoming November 2026 election, this item is the first of those public hearings. This hearing was duly noticed. The City Council may hold additional meetings on this topic, as it desires.
1 The formal process to adopt a charter involves extensive public input, as described in Attachment 1.
FIRST PUBLIC HEARING PURSUANT TO GOVERNMENT CODE SECTION 34458
REGARDING A POTENTIAL CITY CHARTER
April 28, 2026
Topics for the City Council to consider at this hearing are (1) whether to continue with the City Charter process as well as (2) the substance of the draft City Charter (attached as Attachment 2), which reflects the Council’s direction at its February 10, 2026 meeting relating to topics to be included in the charter. The draft is intended to be, as directed, a minimal, streamlined charter while simultaneously ensuring it properly reserves certain powers for the City moving forward.
DISCUSSION
Under California law, municipalities may be organized under one of two legal structures: general law or charter law. General law cities, such as the City currently, derive their authority primarily from State statutes. Charter cities, by contrast, derive certain powers from a locally adopted charter pursuant to Article XI of the California Constitution. Although both types of cities perform the same basic municipal functions, their differing sources of powers create meaningful implications for the scope and limits of their municipal authority. A more robust discussion and explanation of the distinctions between each form of municipal organization is found in Attachment 1.
Varying Formats of City Charters
In review of the various charters adopted by other jurisdictions, there is a range of detail and complexity in each charter. Some are dozens of pages long with detailed processes and substantive law on various topics.
Others are more “bare bones” or limited with the local jurisdiction stating they are a charter city, reserving certain topics as “municipal affairs,” and then relying upon the normal ordinance adoption process to substantively regulate these municipal affairs. Many charters are also in between the two ends of the spectrum. There are pros and cons to both the “expansive” and “limited” approaches.
The detailed, expansive city charter approach makes clear to the electorate exactly what process and law will govern these municipal affairs. However, because they are formally approved by the voters via the charter adoption process, the only way these can be modified is via a charter amendment at a subsequent election. This makes changes more cumbersome. On the other hand, detailing numerous topics is more protective of that specific policy decision than an ordinance adopted post charter adoption, as discussed below. Typically, these types of charters are a result of a very lengthy, debated process where on the numerous policy decisions to be included in the charter, as once adopted, any change requires voter approval at a subsequent election. It should be noted that due to time constraints on the process with the impending November 2026 election, a detailed and substantive charter with a variety of policy decisions implemented is likely not feasible at this time.
The limited approach provides for more flexibility as the substantive processes and policies not expressly enshrined in the charter can be changed by future City Council’s via the standard ordinance or resolution process—and not by the electorate.
Based on prior Council feedback, the City is currently advancing with the “in between” approach, although it leans more heavily towards a limited charter, with a handful of policies being expressly enshrined in the proposed City Charter (as detailed further below) and the remainder being deferred to the reservation of the City’s municipal power authority in the Charter.
FIRST PUBLIC HEARING PURSUANT TO GOVERNMENT CODE SECTION 34458
REGARDING A POTENTIAL CITY CHARTER
April 28, 2026
The attached draft City Charter (Attachment 2) is close to the minimal amount of substance that City staff would recommend. While other jurisdictions may have even shorter charters, Attachment 2 expressly refers to the topics and areas that the City Council has expressed a desire to regulate by charter (see topics below).3 As drafted, the details of such regulation for those topics will be adopted via future legislative action such as ordinances or resolutions. For example, if the City desires to contract out parking enforcement services (assuming the City Charter is presented to and adopted by the voters), the City Council will need to subsequently adopt a resolution or ordinance allowing for such parking enforcement to be done via contract; if the City Council did not take such subsequent legislative action, then the City would remain governed by the State laws on that topic, like a general law city. This approach (i.e., expressly naming the municipal affair topics in the charter) is the most legally protective of the City in ensuring those topics may be regulated under the home rule doctrine, while also allowing this and future City Councils the ability to modify or remove the City-specific regulation on these topics, but as determined by each City Council.
In addition, for additional municipal affair topics that are not expressly referenced in the draft City Charter, if adopted, this and future City Councils may nevertheless regulate those topics as a charter city by legislative act through the Charter’s retention of its municipal affairs power (Proposed Charter § 200) as exercised by the City Council (Proposed Charter § 201). This approach allows for flexibility for future charter regulation on different and emerging topics.
Further, the draft City Charter explicitly incorporates existing ordinances, resolutions, and policies adopted by the City Council (Proposed Charter Article III). These were all adopted pursuant to the City’s status as a general law city and future City Council action will be required in the event of adoption of a City Charter to modify or remove these prior City enactments.
Topics Proposed to be Regulated by the Laguna Beach City Charter Based on discussion and direction at the February 10, 2026, City Council meeting, the following sections describe three specific areas of municipal affairs4 that could be exercised by the City of Laguna Beach upon adoption of a City Charter:
• Public Works Contracting
• Contracting for Certain Services
• Fine Amounts for Administrative Citations
3 Note that the draft Charter does still include reference to certain topics—specifically, the City’s form of government (Proposed Charter § 400), terms for Councilmembers (Proposed Charter § 401), and elections (Proposed Charter Article V)—to memorialize in the City Charter that these topics will continue to function as they currently do. In other words, this offers assurances that a future City Council will not seek to make changes to these topics by relying on the general “municipal powers” provision, without voter approval.
4 In addition to these three topics, the City Council comments also indicated retaining express reference to the Public Financing (Proposed Charter § 205), Reductions (Proposed Charter § 206), and Mandates (Proposed Charter § 207) topics.
FIRST PUBLIC HEARING PURSUANT TO GOVERNMENT CODE SECTION 34458
REGARDING A POTENTIAL CITY CHARTER
April 28, 2026
Public Works (Proposed Charter § 204)
Under the Public Contract Code, general law cities are generally required to award public works contracts to the lowest responsible bidder that submits a responsive bid. While the City retains some discretion in evaluating the bid for responsive and the contractor qualifications for responsibility, the lowest-bid framework can present constraints on the City's ability to rely upon other criteria that may result in a more qualified contractor, albeit one that may be slightly more expensive. Further, there are certain due process requirements for determining a bidder not responsible and notice requirements for a non-responsive bid.
Notably, the City has recently adopted the California Uniform Public Construction Cost Accounting Act (CUPCCA). This is a voluntary program that the City availed itself of that establishes standardized cost accounting and different bidding procedures for certain public works projects. Specifically, it establishes three levels of projects. The lowest level can be performed by City staff or negotiated contract without formal bidding. The second level may be awarded through an informal bidding process using a pre-qualified contractor list, rather than the formal competitive bidding process required under the Public Contract Code.
Anything above this second threshold amount is subject to the standard formal bidding process of the Public Contract Code, referenced above.
As it pertains to a possible charter, public contracting is recognized as a municipal affair for charter cities.
Pursuant to Public Contract Code Section 1100.7, charter cities may be exempt from state competitive bidding statutes, provided the city charter or a local ordinance expressly exempts the city and the subject matter of the bid constitutes a municipal affair. This would allow the City to:
• Establish its own bid evaluation criteria that may include price, qualifications, safety record, local workforce requirements, and other factors deemed in the public interest; • Adopt a best-value procurement framework for public works projects; • Streamline contracting processes for projects below thresholds to be established locally; and • Negotiate design-build, construction manager at-risk, or other alternative delivery methods without being constrained by state procurement timelines.
Still, if the City’s voters were to ultimately adopt a city charter, even if the City Council then legislatively adopted separate processes for its public works contracting, the City would still need to provide some level of due process to bidders to ensure a fair and equitable application of any rules that the City may adopt.
That is, the City must nevertheless set rules for the bid and award, and it cannot award public works contracts on a case-by-case basis without prescribing rules and guardrails. However, to reiterate, a Cityspecific process could be designed to be more flexible than the somewhat rigid requirement of Public Contract Code requirement to award to the lowest responsible bidder that submits a responsive bid.
Contracting for Municipal Services – Emphasis on Parking Enforcement (Proposed Charter § 208) The California Vehicle Code and other state authority place restrictions on the ability of general law cities to contract with a private third-party vendor to issue parking citations. These same limitations do not apply to charter cities and, should the City adopt a charter, it would be able to comfortably contract with a third- FIRST PUBLIC HEARING PURSUANT TO GOVERNMENT CODE SECTION 34458
REGARDING A POTENTIAL CITY CHARTER
April 28, 2026
party vendor for parking enforcement if the City Council so desired. Currently, the City relies upon sworn LBPD officers and non-sworn LBPD employees for these functions, which limits staffing flexibility and may increase costs compared to models where a third-party vendor is involved.
A model that involves a third-party vendor may result in an incentive-based structure where the third party is compensated based on the number of parking citations issued. Thus, with a dedicated third-party vendor solely responsible for parking enforcement, it is likely the number of parking citations would increase. The City could set up a parking enforcement program where this third-party is only deployed in certain areas of the City or certain times. However, a third-party vendor would likely be desirous of maximum opportunity to make the contract with the City more financially feasible/beneficial.
Parking enforcement is not the only municipal service that could be addressed via contract services by a charter city. However, there are certain labor requirements and issues regarding existing MOUs with the various City employee labor groups that must be addressed prior to implementing many such contracting services.
Administrative Citations (Proposed Charter § 202)
The Government Code has a few sections addressing administrative citations and fine amounts. (See Government Code sections 36900 & 53069.4.) These sections do set maximum fine amounts for an administrative citation for LBMC violations that would otherwise be an infraction. However, there is some grey area in the law regarding whether there is a cap on administrative citation fines for LBMC violations that would otherwise be a misdemeanor.
For charter cities, an administrative citation fine amount is a municipal affair and the only limit on the fine amount associated with an administrative citation would be any maximum limit set by the charter, other City legislative action, and constitutional concerns (i.e., Excessive Fines Clause of the U.S. Constitution).
While the City has some legal arguments – and some general law cities also assess fines in excess of the amounts listed in the Government Code for administrative citations for violations that would otherwise be a misdemeanor – a City Charter that reserves the administrative citation fine amount as a municipal affair is the most legally protective in allowing the City to set fine amounts for administrative citations that do not run afoul of constitutional restrictions. Therefore, if a City Charter reserving its municipal affairs power over administrative citations was adopted, the City would be in the strongest position possible– following adoption by the City Council of a resolution or ordinance specifying the amounts – to commence imposing greater fines as an enforcement tool for some of the issues in the City that are often more difficult to deter.
FINANCIAL ANALYSIS
The financial impact of a City Chater is somewhat dependent on the policy decisions made by the City Council regarding the various subjects contemplated by this staff report and any other policy decisions the City Council may make. Certain decisions, such as possible contract parking enforcement, could provide additional revenues to the City based on a future contract should a City Charter be adopted.
FIRST PUBLIC HEARING PURSUANT TO GOVERNMENT CODE SECTION 34458
REGARDING A POTENTIAL CITY CHARTER
April 28, 2026
ENVIRONMENTAL ANALYSIS
The recommended action consists of organizational or administrative activities of the City that will not result in a direct or indirect physical change in the environment and therefore does not constitute a "project" within the meaning of the California Environmental Quality Act. (Public Resources Code Section 21065; CEQA Guidelines Section 15378(b)(5).)
ATTACHMENTS
1. January 30, 2026 Memorandum from the City Attorney’s Office (Pgs. 7-12)
2. Draft City Charter (Pgs. 13-20)
Submitted By: Megan Garibaldi Approved: Gavin Curran, for Megan Garibaldi, City Attorney Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Pat Donegan, Assistant City Attorney