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What Does "Home Rule Municipality" Mean?

Gunnison, Colorado

October 22, 2020

Of the nation’s 50 states, Colorado is one of 30 recognized as a Home Rule State, having amended its constitution to grant municipalities the ability to exercise local control of their individual governments.

In Article XX of the Colorado Constitution, home rule gives local municipalities the power to make legislation relevant to their areas, exercising control over issues of “local concern” while minimizing state intervention in municipal affairs.

Home rule allows for greater flexibility in other areas of municipal government, including local elections, organizational structure and municipal courts.

A home rule charter that is specifically crafted and tailored to individual municipalities acts as the city or town’s basic governing document over local issues; however, when a dispute arises, whether an issue constitutes “local concern” must be determined by courts on a case- by-case basis, and certain state laws will prevail in matters of statewide concern.

While each home rule charter includes a few mandatory provisions regarding initiative and referendum of measures and recall of officers, many of the powers and functions identified in a town’s charter are decided by an individual town and its citizens through an extensive public input process, noted Ridgway Mayor John Clark in a recent interview on the subject. Nearly 100 cities and towns in Colorado operate under home rule charter, including the City of Ouray and the Town of Ridgway.

Following voter approval, Ouray adopted its home rule charter in 2009. Mayor Pam Larson, who served on the charter committee at the time, said that specific factors considered in adopting home rule for the city included allowing voters to decide on sales tax increases to fund local projects, the ability for the city to collect its own sales tax and flexibility in creating land use regulations.

Ouray City Administrator Patrick Rondinelli added that prior to home rule, the city followed a council-manager form of government that is still in place today. While local control was the main reason for the city’s switch from a statutory to home rule municipality, Rondinelli added that the city “did not change much” in day-to-day operations by becoming home rule.

Approved by voters in 1993, the Town of Ridgway’s home rule charter brought control to the town government on issues such as council structure, lodging tax and sales tax collection. On the other hand, most of Colorado’s municipalities operate as statutory cities and towns. According to the Colorado Municipal League, statutory cities and towns are limited to exercising powers that are granted by the state and are subject to provisions and limitations imposed by the state.

Approximately an hour and a half northeast of Ridgway, the town of Paonia, with a population of 1,425 (according to 2012 data from the U.S. Census Bureau), still functions as a statutory town.

Paonia Mayor Neal Schwieterman explained that the town has never felt that the added effort to prepare a home rule charter was justified.

“It’s a lot of work,” Schwieterman explained. “We just haven’t had the staff time.”

Schwieterman said although the town had found a number of minor inconveniences in his seven years of experience, such as collecting sales tax at local events, the town did not feel hamstrung in dealing with local issues as a statutory town.

In the far southwest corner of the state, the town of Mancos, population 1,341, continues to operate as a statutory town as well.

Town Administrator Andrea Phillips acknowledged that governing as a statutory municipality does limit the town’s authority on certain issues. In a recent development, Phillips stated, the town can raise sales tax on marijuana only by a certain amount in accordance with state statutes.

Clark pointed out that local collection of sales tax, which he said was a source of errors when conducted by the state, is one of the biggest areas of improvement under home rule. A home rule charter allows cities to collect and enforce local sales and use taxes and permits a broader or narrower sales and use tax base. Further, towns are allowed additional types of excise taxes, which may include admissions, entertainment, tourism and lodging taxes. However, under statutory rule a municipality's sales tax is collected by the state. In Paonia and Mancos, sales tax is paid and collected by the Department of Revenue, which later allocates appropriate funds to the towns.

Likewise, sales tax ordinances must be in compliance with state statutes and are not as flexible, for example, if local governments want to raise taxes to pay for local projects. A local government’s organizational structure can also differ in home rule and statutory municipalities.

In Ouray and Ridgway, citizens elect four council members and a mayor to make up the city and town council. As a body, the council then appoints an administrator or manager to manage city affairs, including enforcement of ordinances and policies, hiring and firing of city employees, preparation of annual budgets and other duties outlined in their respective charters. The town administrator/manager is accountable to the council, which is accountable to the citizens.

In Paonia and Mancos, the town mayors are at the head of the government bodies and are elected to that position. Also elected are six citizens who make up the Board of Trustees, constituting the legislative body of the town. The Board of Trustees hires the town administrator, who serves as the administrative officer of the town under the direction of the board.

The driving factor in which cities and towns pursue home rule is to exercise freedom of local governing and minimizing state intervention in municipal affairs.

“Home Rule allows us to dictate how we govern ourselves, whereas statutory communities are subject to state statutes and the desires of the state legislature,” said Rondinelli.

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