The structure and powers of municipalities in Colorado are established in Title 31 of the Colorado Revised Statutes. “Statutory” cities and towns in Colorado must look to Title 31 for authority on everything from the composition of the governing body to what types of taxes and fees may be imposed. Even when a particular statutory provision does not make sense for a city or town based on local circumstances, statutory municipalities are compelled to follow the letter of the law as established in Title 31. This lack of flexibility can result in inefficiencies and labored administration of local affairs. However, the citizens of every municipality in Colorado have a second option available to them—creation of a home rule charter.
Article XX of the Colorado Constitution reserves home for citizens of home rule municipalities “the full right of self government in local and municipal matters.” This clause has been interpreted to mean that municipalities can regulate matters of “local and municipal concern” under the theory that citizens of a municipality should have the right to decide how their local government is organized and how their local problems should be solved. Article XX home rule powers are not infinite and are controlled by a community’s self-drafted home rule charter, federal law, the state constitution, court decisions, and, in some cases, legislation enacted by the General Assembly. Unproven areas of “local concern” may be subject to challenge in the court system. Even with these limitations, however, home rule municipalities enjoy greater flexibility in administering the community’s affairs since they are not limited to the Colorado statutes and constitution as sources of regulatory authority.
Electing to become a home rule municipality is a multi-step process. Two separate elections must be held—the first to establish a home rule charter commission and the second to decide the home rule question itself. Drafting the charter and holding the elections comes at a cost; expenses typically include consultant fees and publication costs. However, once home rule authority is approved by the voting public, the municipality enjoys greater fiscal oversight over tax collection, typically resulting in higher collection rates, and increased flexibility to handle the business of the city or town in a cost-effective, efficient manner. Procedures such as publication requirements, bidding and construction bonding requirements, and transfer of funds among municipal departments can all be streamlined resulting in the net gain in efficiency reported by many home rule communities.
To dispel one common myth about home rule authority, no Colorado municipality, statutory or home rule, can increase taxes without a vote. Home rule municipalities remain subject to the Taxpayers Bill of Rights (“TABOR”) and other tax oversight. However, home rule cities and towns can choose to collect their own taxes rather than leave tax administration to the State, a level of government with little contact and knowledge of on-the-ground operations in Colorado communities. Self-collection of taxes improves customer service to local residents and fosters solid relationships between municipalities and local business owners. Some Colorado municipalities report as high as a twenty-five percent (25%) increase in revenue without raising taxes after electing home rule authority. The increases are the result of accelerated receipt of funds, cutting the state out of earning interest on taxes, and more effective revenue collection and enforcement. The state, wisely, is focused on its own revenues and does not conduct many local audits to ensure businesses and individuals are paying into the system. Home rule communities have the authority to conduct their own audits and adopt equitable collection procedures that work at the local level. The home rule municipality also gains the ability to expand its tax base to cover products and services currently exempt for statutory cities and towns, focusing on visitor revenue.
Beyond these general benefits of home rule authority, the following are specific powers available to home rule municipalities that may be addressed in home rule charters.
General administrative powers:
- Establish alternative procedures for municipal utility management and operation.
- Broaden jurisdiction of municipal court– may increase revenues.
- Provide new tools for economic development.
- Clarify authority for or expand types of services provided by the municipality.
- Establish specific ethics and conflict of interest rules.
Financial flexibility beyond new taxes:
- Allow local collection and enforcement of local sales/use taxes.
- Allow broader or narrower sales and use tax base.
- Re-examine procedures for budget appropriation and enterprises and bond issuance.
- Eliminate 30 day waiting period for effectiveness of ordinances or otherwise modify ordinance enaction process.
- Create purchasing policy including requirements for bidding and awarding of local projects, for example a local preference regulation, and disposal of public property.
- Establish local zoning, subdivision or other land use procedures different from those established by statute
- Specify condemnation powers
City Council, elected officials, and boards:
- Eliminate statutory bonding requirements for local officials made obsolete by insurance.
- Further define or revise powers of Mayor, City Council, City Administrator, other officers, and boards and commissions.
- Expand or contract the number and types of elective offices.
- Reconfigure election by districts, redistricting, etc.
- Modify or eliminate term limits for Mayor and Council.
- Provide clear authority to adopt the Council/Administrator form of government.
- Establish City Council procedures and requirements.
- Change election dates from those required by statute to permit, for example, a spring regular municipal election.
- Increased discretion for special elections.
- Modify procedures for initiative, referendum, and recall and expand citizen powers.