1.5.1 Charter City Powers – Municipal Affairs vs. Statewide Concerns

California is what is known as a Home Rule state. Article XI, Section 5 of the California Constitution provides that charter cities “may make and enforce all ordinances and regulations in respect to municipal affairs, subject only to restrictions and limitations provided in their several charters and in respect to other matters they [are] subject to general laws [of the state].” Charter city power may also be limited by other provisions of the California Constitution. In contrast, general law cities, like other local government agencies, have the limited powers granted to them by state statute. A city charter does not grant powers, it “accepts the privilege granted by the Constitution of complete and autonomous rule with respect to municipal affairs.”58 To determine what limitations apply to city adopted legislation, the key question is whether the issue addressed is a “municipal affair” or the term courts use for its opposite, a “statewide concern.”

As a general proposition, a “municipal affair” is local in nature, does not affect persons or property outside the jurisdiction of the city, and does not interfere with a statewide regulatory scheme established by the Legislature. Article XI, Section 5 of the California Constitution enumerates a few specific “municipal affairs:”

Constitution, regulation, and government of the city police force
Sub government in all or part of the city
Conduct of city elections
Provision for the election, appointment, and compensation of municipal of officers and employees

The above list is not exhaustive. Other general areas that courts have determined to concern “municipal affairs” include the following:

Taxation for local purposes (apart from taxation of banks and insurance companies and other areas for which the state has developed a comprehensive taxation scheme). For example, see Weekes v. City of Oakland, 21 Cal. 3d 386 (1978), where the California Supreme Court determined that the levy by a city of a tax on employee “gross receipts” for services performed in the city was a municipal affair.
Formation of assessment districts and assessment procedures (subject to constitutional limitations)
Land use and zoning (with certain exceptions)
Budgeting and expenditure of tax receipts
Public contracting requirements (with certain exceptions)

The concept of “municipal affair” is fluid as well as indefinite, as municipal and state interests change over time. “Municipal affair” questions are particularly challenging when addressing matters for which both a charter city and the State have taken action. Although there is no concept of “preemption” of local ordinances by state law in the manner that federal law preempts state law, and the Legislature is not empowered to determine what is and what is not a “municipal affair,” courts will take into account a manifest intent and purpose that a general state law “occupy the field” to the exclusion of municipal regulation.59

For determining whether a charter city ordinance controls over a general state statute in a particular case, the California Supreme Court has developed a four pronged test:

Does the matter implicate a “municipal affair?”
If so, is there a genuine conflict between the municipal ordinance and state law?
If so, is there a “statewide concern” (a dimension demonstrably transcending identifiable municipal interests)?
If so, is the statute “both reasonably related to the resolution of [the statewide] concern and ‘narrowly tailored’ to limit incursion into legitimate municipal interests?”

Although “municipal affair” and “statewide concern” are mutually exclusive ultimate conclusions, court cases60 use the terms in a pragmatic balancing between municipal and state interests.