MUNICIPAL LAW. Basics of Municipal Authority. Standards for Incorporation
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1 MUNICIPAL LAW Susan J. Moore GMA General Counsel Rusi Patel GMA Senior Associate General Counsel Basics of Municipal Authority Standards for Incorporation Hierarchy of Laws Constitutional Constraints Home Rule Municipal Charter Provisions Differences Between Cities and Counties Revenue and Debt Powers Standards for Incorporation Population Density Property Development 1
2 Standards for Incorporation How are cities incorporated? The General Assembly adopts a charter incorporating new the city. Referendum? Hierarchy of Laws U.S. Constitution Federal Laws Georgia Constitution Georgia State Laws»Local Act Ordinances and Resolutions State and Local Laws 2
3 Dillon s Rule Cities can do only those things which are specifically authorized by statute. History of Home Rule The Georgia General Assembly may provide by law for the self-government of municipalities and to that end is expressly given authority to delegate its power so that matters pertaining to municipalities may be dealt with without the necessity of action by the General Assembly. Art. 9, Sec. 2, Par.2. History of Home Rule Municipal Home Rule Act of 1962 Lists specific powers cities can exercise. Municipal Home Rule Act of 1965 Provides a general grant of power. County Home Rule in Constitution 3
4 History of Home Rule 1972 Constitutional Amendment The infamous Amendment 19 Supplementary powers for cities and counties. Allowed counties statewide to provide services that were only previously provided by cities. Allows exercise of powers inside another jurisdiction by contract or as otherwise provided by law. Home Rule Planning and Zoning Power Intergovernmental Agreements - cities can enter into agreements with public agencies for up to 50 years. Art. 9, Sec. 3, Par. 1 Home Rule State Laws - Title 36 Hire and compensate employees Set compensation and benefits of elected officials 4
5 State laws Home Rule Grant franchises for use of streets Adopt reasonable ordinances, resolutions and regulations not inconsistent with charter or state law Municipal Charters Changed by ordinance or initiative and referendum. Changes must be: Adopted at 2 consecutive meetings Published for 3 weeks within period of 60 days before final adoption Copy must be sent to Secretary of State Municipal Charters Cities cannot enact the following charter changes: Form of government Procedure for election or appointment Continuance in office Taxation not authorized by state law Affect the jurisdiction of a court 5
6 Typical Charter Provisions Incorporation and Powers Name and Boundaries Government Structure Council Manager Strong Mayor Weak Mayor Forms of City Government Council-Manager Voters Mayor and City Council City Manager Department Head Department Head Department Head Forms of Government Mayor-Council (Weak Mayor) Voters Mayor and City Council Committee Committee Committee Department Department Department 6
7 Forms of Government Mayor-Council (Strong Mayor) Voters Mayor City Council Department Head Department Head Department Head Typical Charter Provisions Terms and Qualifications for Office Vacancies in Office Compensation and Expenses Inquiries and Investigations/Ethics General Power and Authority Typical Charter Provisions Organization and Procedures Meetings Rules of order and procedures Mechanics of adopting an ordinance Administrative Affairs Administrative Officers Personnel Administration 7
8 Typical Charter Provisions Judicial Branch - Municipal Court Elections and Removal Finance Taxation and Fees Borrowing Accounting and Budgeting Procurement Revenue Powers Constitutional Authority - Cities can impose taxes authorized by the Georgia Constitution, by general law or local act. Statutes - The revenue and taxation power of cities is very limited. Revenue Powers Georgia Tax Statutes Real and personal property taxes LOST SPLOST Occupation taxes Hotel/motel taxes Insurance premiums tax Alcoholic beverage excise taxes 8
9 User Fees Revenue Powers Regulatory fees/inspection fees Water and sewer fees Electric and gas fees Development impact fees Utility franchise fees Miscellaneous user fees Incurring Debt General obligation debt: The full faith and credit of the city is pledged. Requires referendum. Property taxes must be high enough to pay off the debt. Outstanding debt is limited to 10% of assessed value of taxable property in the city. Incurring Debt Lease purchase agreements City only obligated for sum to be paid in current calendar year. Principal portion of contract, when added to other city debt, cannot exceed 10% of assessed value of taxable property in city. 9
10 Incurring Debt Obligations which are NOT debt Revenue Bonds Contracts with other Georgia public entities Tax anticipation notes Constitutional Constraints First Amendment Free Speech Employees Ordinances must be content-neutral and narrowly tailored to serve significant governmental interests Constitutional Constraints Free Speech Access to public space for speeches and marches Billboard and sign regulation Adult entertainment regulation 10
11 Constitutional Constraints First Amendment Freedom of Religion Employees Public displays (such as Christmas decorations) and access to public space Constitutional Constraints Fourteenth Amendment Due Process: Notice + Opportunity to be Heard Equal Protection: Treating similarly situated people the same. Constitutional Constraints Fourth Amendment Search and Seizure Employee Privacy and Drug-testing Police Activity 11
12 Georgia Statutory Constraints Ordinances of one council cannot bind a succeeding council. Holding dual offices prohibited. Georgia Statutory Constraints Elected officials may not vote on any question in which they have a personal/financial interest. Service Delivery Strategy Act Georgia Statutory Constraints Budgets and Audits Balanced budget. Proposed budget must be available for review by the public. Public hearing at least one week prior to budget adoption. 12
13 Georgia Statutory Constraints Budgets and Audits Cities with pop 1,500+ or $300,000+ in expenditures must have annual audit. All other cities must do audit every two years or prepare annual financial report. Uniform charts of accounts. Georgia Statutory Constraints Budgets and Audits Cities with an annual budget in excess of $1 million must send adopted budget and annual audit to the Carl Vinson Institute of Government to be posted on the Internet. ted.cviog.uga.edu/financial-documents Georgia Statutory Constraints Verification of Persons Applying for Public Benefits Using SAVE. Definition of Public Benefit is very broad. City must enter in Memorandum of Agreement with federal SAVE program. City must obtain affidavits from all applicants for public benefits. City must verify status of anyone who indicates they are not a U.S. citizen. 13
14 Hierarchy of Laws U.S. Constitution Federal Laws Georgia Constitution Georgia State Laws»Local Act Ordinances and Resolutions MUNICIPAL CONTRACTS Acquiring property or services Disposing of property Municipal Contracts A contract may be void if: Elected official is personally/financially interested in contract; Contract would tend to lessen competition; Contract would increase city s debt beyond constitutional limits; 14
15 Municipal Contracts A contract may be void if: Contract would bind succeeding council or give away council s legislative powers; or Contract would violate public policy. Municipal Contracts City employees or officials cannot sell property to the city or an agency of the city. Such a sale is a criminal offense. Exceptions: Less than $800 of personal property per calendar quarter. Personal property sale by sealed bid. Real estate sale with proper disclosure. Municipal Contracts Acquire property through eminent domain. Only for a public use. Mandated procedures. Pay just and adequate compensation. 15
16 Municipal Contracts Acquiring Property for Road Purposes Eminent domain Intergovernmental exchange of property Donation Dedication Prescription Municipal Contracts Public Works Projects with cost of $100,000 or more must be advertised and awarded based on sealed competitive bid or sealed competitive proposal. Projects cannot be subdivided to avoid the requirements of this law. Cities can self-perform or use inmate labor and these construction projects are not covered by the bid requirement. Municipal Contracts Public Works Projects Performance and payment bonds. Council must ensure the surety backing the bond can pay it if it s called and must sign off on the actual provisions of the bond. Specific statutory requirements for bid bonds. Contract not valid if required bonds are not obtained. 16
17 Municipal Contracts Contracts with the state or federal government to buy property do not require advertisement or bids. Intergovernmental agreements of up to 50 years for services or use of facilities or equipment. DOAS and Georgia Correctional Industries Administration. Municipal Contracts See city charter for provisions required to be in contracts. E-Verify Requirements- Contracts for labor or services worth $2,500 or more require an affidavit and E-Verify number. No general state law requiring cities to solicit bids except for certain road contracts and public works contracts over $100,000. IF a city extends a bid or proposal for goods and services valued at $10,000 or more or under the public works laws then it must be posted on the Georgia Procurement Registry Municipal Contracts Road construction and maintenance contracts must be bid out unless they: Involve the expenditure of less than $200,000; Are with a state agency or political subdivision; Are with a railroad company or utility; 17
18 Municipal Contracts Road construction and maintenance contracts must be bid out unless they: Are for engineering or other kinds of professional or specialized services; or Are for emergency maintenance requiring immediate repairs; or Are expressly authorized by law. Municipal Contracts No contract of more than $20,000 but less then $200,000 for construction or maintenance of a road is to be awarded by a municipality without the submission of at least two estimates. Municipal Contracts A road construction or maintenance contract must be: in writing; approved by resolution; and entered on the minutes If the contract price is $5,000 or more, the contractor must provide performance and payment bonds. 18
19 Gratuities Cities and counties are generally not allowed to contribute or donate public funds to private or charitable causes. The authority to make charitable contributions must be specifically authorized by the General Assembly in a general statute or local legislation. Elections Local governments are prohibited from, directly or indirectly, making contributions or engaging in any activity to influence the outcome of an election or referendum. Disposing of City Property Generally must be done by sealed bid or auction. 19
20 Disposing of City Property Exceptions to bid and auction: Property received from state or federal government pursuant to a program imposing conditions on disposal of property; Property disposed of pursuant to Urban Redevelopment Law or homesteading program Disposing of City Property Exceptions to bid and auction: Property is sold or transferred to another government agency for public purposes; or The property is no longer needed for public road purposes and is disposed of in accordance with OCGA Disposing of City Property Lease for the use, operation or management of real or personal property for longer than 30 days must be done by sealed bid or auction in the same manner as for a sale. Insurance coverage of at least $1 million plus indemnity and hold harmless. The lease term can be no longer than five years with one five year renewal. After that time, leasing must again be subject to public bid or auction. 20
21 Disposing of City Property For building telecommunications towers, the initial term of the lease cannot exceed 10 years and there can be one renewal period of 10 years. Lease must include provisions for removal of telecommunications tower. After renewal term, lease is subject to bid or auction. Disposing of City Property Cities can sell personal property valued at $500 or less without sealed bid. City may swap real property for property of equal or greater value but must publish notice of exchange once a week for four weeks before closing. Disposing of City Property A city can sell, grant or lease real property to the state or one of its authorities whenever the city determines that it would benefit the city. A city can sell narrow and irregular pieces of property incapable of being used independently as zoned or as streets to abutting property owners without auction or bids. 21
22 Elements of a Lawsuit Ante Litem Notice Complaint Answer Elements of a Lawsuit Motion to Dismiss Discovery Interrogatories Document Production Requests for Admissions Depositions Elements of a Lawsuit Motion for Summary Judgment Trial Appeal 22
23 Tort Types of Actions Mandamus Nuisance Declaratory Judgment Contract Injunction Civil Rights Violation of Federal or State Law of Cities and City Officials Torts, nuisance and contracts. Ultra vires actions. Difference between state law and federal law immunity. State Law Unless there is sovereign or official immunity, cities are generally held liable for acts of officials or employees where the person is acting in the course of agency or employment for the city --- respondeat superior 23
24 Was the person doing the city s business? If YES: Was there sovereign immunity? Georgia cities immune unless it has been waived by: Act of the legislature; Purchase of insurance; or Because the city was performing a nongovernmental (proprietary) function. Example: Legislature waived immunity for motor vehicle negligence claims. OCGA $500,000 for bodily injury (one person) $700,000 (two people) $50,000 property damage $750,000 aggregate 24
25 No sovereign immunity for nuisance claims. Nuisance is created by continuous or repetitious act or condition that injures or damages the plaintiff. Plaintiff must show that city knew about the condition and failed to take action. Official immunity: protects individual public agents from liability in their personal capacity for discretionary actions taken within the scope of their authority and done without willfulness, malice or corruption. A public officer or employee may be personally liable only for ministerial acts negligently performed or acts performed with malice or an intent to injure. 25
26 What is a discretionary action? What is a ministerial action? Public works employee Tom, while driving a city truck and leaving the site of a pot hole repair, pulls out in front of an oncoming car and causes a wreck. Officer Ted, while heading to a possible robbery, runs a red light and hits Lois. 26
27 Mayor Marcia happens upon a truck accident and decides to help out by directing traffic. But she motions two cars to proceed through the intersection at the same time and they have a head on collision. What if a police officer did the same thing? City ordinance requires development permit and states issuance of permit certifies that development is in compliance with all state and local regulations. Drainage study is reviewed and approved as part of the process. Downstream owner later floods. 27
28 Federal Law 42 USC Section 1983: Authorizes damages for violation of federally protected rights against any person acting under color of law. The city is considered a person. Common types of 1983 claims: Excessive use of force by police Personal injuries Employment actions First Amendment Land use and permitting Fourteenth Amendment No immunity for city under federal law. But to hold city liable, plaintiff must show that person acting for the city was acting pursuant to: Policy Practice or Custom 28
29 How do you show a city s: Policy? Practice? Custom? Individual may have immunity: Legislative Qualified: For discretionary acts when the conduct does not violate a clearly established statutory or constitutional right which a reasonable person would have known. City council votes to fire employee who writes letter to the editor critical of funding for the police department. 29
30 City council passes an ordinance banning signs that support the Florida Gators. City manager removes political signs for candidates challenging incumbent members of the city council. Councilmember accepts a bribe from a developer in exchange for denying a rezoning application. Denial of the rezoning would prevent the developer s competitor from developing a strip mall. What kinds of damages can a plaintiff recover? Are they limited? What about attorneys fees? 30
31 DO s and DON TS Separate public duties from private matters Correct problems; don t ignore them. Have, follow and update policies. Generate only the infrastructure the city is prepared to maintain. Actively manage risk. Consult with the City Attorney. The City, the City Attorney and You Who is the client and who does the city attorney represent? Preserving confidences who decides? Understanding what the city attorney actually does. ANNEXATION Growing Cities, Growing Georgia 31
32 Legislative Nature of Annexation No right to be annexed Wide latitude in the reasons for annexing Why Annex? Closer, more responsive local government Better services Sense of place Dense development in already populated areas Forms of Annexation 100% 60% Resolution and Referendum Local Act of General Assembly 32
33 100% Easiest Consent of 100% of the property owners Annex by Ordinance Limitations on annexation across county line for first time ( ) Deannexation 60% Signature of 60% of electors on property to be annexed, and Signature of owners of 60% of the land area (not 60% of owners) Validation of signatures Report Public hearing Annex by ordinance Resolution and Referendum Resolution announcing intent to annex which includes procedural information Report Public hearing and presentation of report Referendum of electors to be annexed, with majority voting in favor 33
34 Local Act of the General Assembly Where 50% of property to be annexed is used for residential purposes, notice to county is required; and Referendum required where residents in area to be annexed exceeds 3 percent of city population or 500 people. City must give copy of proposed legislation to the county Annexation Basics Contiguity: Varies depending on method 100%: 1/8 th of external boundary or 50 feet, whichever is less 60%: 1/8 th of total boundary of land to be annexed Referendum: Abuts Local Act: Not Required Annexation Basics Would abut except that state-owned land, a political subdivision or land the definite width of Street or street right of way Creek or river Right of way of RR or other public service corp. are in the way. 34
35 Annexation Basics Entire parcel Private property complies with city s minimum lot size requirements These restrictions, including contiguity, can be waived by agreement with county Unincorporated Islands Annexation cannot create unincorporated islands Cannot create a situation in which there are no means of reasonable physical access by county for the provision of services to a portion of the county Annexing Unincorporated Islands Island existing on January 1, 1991 may be annexed by ordinance by a contiguous municipality with a population of 200 or more. All or any portion of the unincorporated island may be annexed. Requires 30 days written notice to property owners and provision of services to annexed area on substantially same basis and in same manner as the rest of the municipality. 35
36 Annexation Problems Procedural defects are generally the problem Examples: No ordinance No signature from property owner(s) Defective Annexation Consequence may be loss of other annexations Some annexations have time limit for challenge Lessons: Follow procedures exactly Don t rush Develop checklist/forms Have city attorney supervise Effective Date Home Rule Annexation For ad valorem tax purposes: Dec. 31 For all other purposes, first day of the month following completion of all requirements Local Act Annexation For ad valorem tax purposes: Dec. 31 For all other purposes, July 1 or date provided in act 36
37 Effective Date of Annexation Annexations in cities with independent school systems: Other effective dates may be established Property zoned and used for commercial purposes does not become part of city school system tax base until Dec. 31 of the year following the year of the annexation. Annexation: Getting Started Notice to County within 5 days of accepting the application for annexation County Property Land Use Disputes Zoning Procedures What happens to zoning upon annexation? County zoning is the county s City and county ordinances are not the same City must zone the property 37
38 Annexation Report File an annexation report with DCA and county no more than 30 days after last day of quarter in which annexation becomes effective. Annexation Report Report must include: Legal authority for annexation Name of county, enactment date and effective date of annexation Letter from municipal governing authority stating intent to add area to maps in next regularly scheduled Census Bureau boundary and annexation survey More Information On-line GMA Publication Growing Cities, Growing Georgia GMA Website: Advice + Knowledge GMA Publications Updated publication is on-line 38
39 Ethics and the Law Just because something is legal doesn t mean it is ethical. (And just because it s legal doesn t mean it s a good idea.) Obeying the law is a minimum. Many people have stayed within the bounds of the law but have still not acted ethically. CHECK for UNDERSTANDING I Rest My Case What are the top three things you learned today? 39
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