The challenge, filed in San Diego Superior Court, seeks to prevent the state of California from mandating the terms of local contracts paid for with local funds. The California Supreme Court has clearly stated that the Legislature cannot dictate how charter cities spend their own money on local construction projects. (State Building and Construction Trades Council of California, AFL-CIO v. City of Vista (2012) 54 Cal.4th 547.) SB 7 violates these constitutional principles.
The League-supported litigation challenges SB 7(Steinberg, 2013), which interferes with a charter city’s choice as to whether to pay prevailing wages in local projects where the state contributes no funding. Charter cities that fail to follow this mandate are barred from applying for state construction funding assistance for two years. This legislation requires charter cties to compromise their constitutional right to govern how they pay for projects funded entirely with local money or else be excluded from eligibility for state funding available to every other California city. SB 7 limits the constitutional authority of charter cities in a manner that is unprecedented.
In particular, SB. 7 violates California Constitution Article XI, Section 5(a), which guarantees that charter cities can govern their own “municipal affairs” without state interference. It also violates Article XIII, Section 24(b) because it restricts local tax revenue by requiring expenditures on state priorities. Since charter cities are created by the “reserved power” of the local electorate, the Legislature cannot interfere with voters’ authority over their city’s “municipal affairs” as recognized by Article IV, Section 1. Further, because SB 7 creates two classes of charter cities (one eligible for state funding and one not), it amounts to an illegal special law under Article IV, Section 16.
The League of California Cities has joined with a coalition of 11 charter cities to provide significant financial and other support for the cities challenging this unconstitutional legislation. The charter cities are represented by Lounsbery, Ferguson, Altona & Peak on Escondido, California. James P. Lough is serving as lead counsel. Mr. Lough successfully argued State Building and Construction Trades Council of California, AFL-CIO v. City of Vista in 2012 before the California Supreme Court. The Vista case reaffirmed the right of charter cities to conduct their own “municipal affairs” without state interference.