Public Agency Protections for Water & Wastewater Rates and Special Assessments
As of January 1, 2025, Assembly Bill 2257 (2024) adds a legal framework to provide for the exhaustion of administrative procedures that increase transparency to water and wastewater ratepayers as well as property owners subject to a special assessment. The bill also provides protection for public agencies. Note this procedure does NOT replace the majority protest required for rate setting or the protest ballot proceeding required for assessments.
Proposition 218 and AB 2257: A Unified Framework
Under Proposition 218, ratepayers are guaranteed a meaningful voice in utility rate decisions through a structured majority protest process:
Written Protests: Property owners and ratepayers may submit written protests up until the close of the public hearing.
- Public Hearing: A hearing is held to consider the proposed rates.
- Majority Threshold: If more than 50% of ratepayers submit valid protests, the proposed rates cannot be adopted. If the threshold is not met, the rates may be approved.
Likewise, property owners are afforded the opportunity to indicate their approval or protest in a noticed protest ballot proceeding when an assessment is proposed:
- Notice and Ballot: Property owners receive a written notice and ballot which may be case and submitted up until the close of the public hearing.
- Public Hearing: A hearing is held to consider the proposed assessment.
- Majority Threshold: If more than 50% of the ballots returned, weighted by the assessment amount, are submitted in protest, the assessment may not be adopted. If the threshold is not met, the assessment may be approved.
Enhanced Notification and Objection Process Under AB 2257
In compliance with Government Code sections 53759.1 and 53759.2, a robust notification and objection process is implemented:
- Additional Notice Requirements
Along with the existing requirements for the mailed notices outlined above, a public agency must include some additional information related to the new administrative procedures:
- A link to the Rate Study or Assessment Engineer’s Report posted on the agency website.
- Hearing details and instructions for submitting objections (separate from protests/ballots).
- Written Objections and Response
Because the objections require a response from the agency, mailing notices and requiring objections to be submitted ahead of the agenda deadline for the Public Hearing is recommended. This will allow staff and the rate setting team sufficient time to prepare a written response and include such response in the public record for review.
- Review and Determination
Before adopting rates or assessments, decision-makers must consider whether to:
- Clarify, reduce, or further review the proposed rates or assessments.
- Overrule objections and proceed with the protest process.
Why It Matters to Ratepayers and Property Owners
These procedures provide for public accountability and transparency and reinforce a commitment to fairness, transparency, and responsible governance. Agencies offer a meaningful opportunity for community engagement and demonstrate a clearer explanation of how concerns are evaluated.
Why It Matters to Public Agencies
The procedures provide protection to public agencies by creating a stronger administrative record, reducing litigation exposure, and limiting litigation only to objectors who participated and the established administrative record.
By integrating these enhanced procedures into water, wastewater, and special assessment adoption, agencies can strengthen public trust while ensuring that legally defensible decisions are made transparently and thoughtfully.