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Council reviews new state 'exhaustion' process for proposed water and sewer fee changes
Summary
City staff explained the new state exhaustion procedures (AB 2257) that run alongside Prop 218 rate hearings to give property owners a formal written objection route before rates are adopted; council discussed timing and legal effects ahead of December and March hearings.
City staff on Nov. 19 briefed the council on new state requirements for utility rate challenges that run alongside the traditional Prop 218 protest process. Rebecca Scott (city staff) told council the exhaustion procedures are a state‑mandated step to preserve or limit future legal challenges and to provide a structured opportunity for property owners and ratepayers to submit written objections and receive written responses.
"So what's before you tonight is actually not related to the EU commission... it's related to a new state requirement that allows folks to have a formal opportunity to review proposed fees, submit written objections, and then they can get a written response from city staff," Scott said. City Attorney staff explained the difference from Prop 218: exhaustion procedures enable engagement and potential fixes before rates are finalized, while Prop 218 is the formal protest/adoption process at council.
Staff outlined a two‑step schedule: council will review proposed rates Dec. 3 and direct staff to mail a Prop 218 (Prop 218/Prop 218 newsletter) notice with ceiling rates; exhaustion procedures and Prop 218 protest windows will run in parallel, with another public Prop 218 hearing in mid‑March where rates could be adopted up to the published ceiling. Staff said the exhaustion window includes a minimum 45‑day period for submitting objections.
Councilmembers asked whether the exhaustion procedure is an appeal or a forum for substantive engagement; staff and the city attorney said it is intended to be an opportunity for the public to raise specific objections that staff can investigate and address in hopes of reducing litigation and improving the rate‑setting process.
