RUA RESOLUTION NO. XX-XX
A RESOLUTION OF THE RIALTO UTILITY AUTHORITY, CALIFORNIA, ESTABLISHING UTILITY RATE SETTING PROCEDURES (FOR WATER RATES AND SEWER/WASTEWATER RATES) UNDER PROPOSITION 218, ASSEMBLY BILL 2257 (GOVERNMENT CODE SECTIONS 53750 THROUGH 53759.2), AND GOVERNMENT CODE SECTION 5956.6.
WHEREAS, the City of Rialto (“City”) provides “utility services” for water service and sewer/wastewater service to property owners (who may also be referred to as “owners”) within the relevant City service area, and establishes the amount of water rates and sewer/wastewater rates to be charged customers in accordance with Rialto Municipal Code (“Municipal Code”) Chapters 12.04 and 12.08 (particularly Municipal Code Sections 12.04.060 and 12.08.200) and applicable law; and WHEREAS, the City provides utility services to its customers in cooperation with the Rialto Utility Authority (“RUA”) under the terms of a Lease Agreement (Water Enterprise) and a Lease Agreement (Wastewater Enterprise), both of which are dated May 1, 2001; and WHEREAS, based on the terms of the Concession Agreement dated March 27, 2012, the City and RUA have delegated specified authority to Rialto Water Services (“RWS”) to operate the water service system and the wastewater service system, including RWS’ authority to bill and collect fees from owners and customers for those water services and wastewater services, while the City and RUA have retained the authority to establish the amount of rates to be billed in accordance with Government Code Section 5956.6 (see Concession Agreement sections 5.8 and 11.6); and WHEREAS, California law authorizes the RUA to charge a fee to the property owners or property owners’ “tenants” (who may be collectively referred to as “ratepayers” or “customers”) for the proportionate cost of providing water services and wastewater services to each customer in accordance with the procedural and substantive requirements of the voter-approved ballot measure known as “Proposition 218” (California Constitution Article XIII D; as it is implemented by the Legislature at Government Code sections 53750 – 53759.2; and as it has been judicially interpreted by appellate court decisions). The RUA refers to those fees as water rates and sewer/wastewater rates (which may be referenced herein individually as “water rates,” “wastewater rates,” “sewer rates,” or “sewer/wastewater rates”; and they may be referenced collectively as “utility rates” or “rates”); and WHEREAS, Under Proposition 218, the RUA’s water rates and wastewater rates are each considered to be a “fee” for a “property-related service” (also referred to as a “property-related fee”), subject to the particular requirements of Constitution Article XIII D, Section 6. A property-related fee is one imposed upon any parcel or person as an incident of property ownership. In general, the RUA may only increase its existing rates if the RUA (1) calculates the rates in accordance with Proposition 218, (2) conducts a public hearing before the RUA’s Board of Directors (“RUA Board”), as described in this resolution, and (3) a “timely written protest” is not submitted by property owners representing a majority of the parcels served by the RUA; and WHEREAS, Under Government Code sections 53759.1 and 53759.2 (“AB 2257”; Chapter 561, Statutes of 2024), the RUA may establish a supplemental process for objecting property owners to exhaust administrative remedies, also described in this resolution, by which the RUA will take specified actions in response to any “timely written objection.” Under this process, only an owner who submits a timely written objection will have a right to challenge a proposed increase in wastewater service charges through a legal proceeding; and WHEREAS, the purpose of this resolution is to provide a meaningful opportunity for a property owner to submit a written objection to proposed new or increased rates before resorting to litigation after the new or increased rates are approved by the RUA Board; and WHEREAS, this resolution is intended to provide a procedure for property owners to submit a written objection regarding new or increased rates to the RUA’s attention early in the rate consideration process, and to provide an opportunity for the RUA to address or resolve any objections before the RUA Board makes a final decision on whether to adopt a proposed rate pursuant to Proposition 218; and WHEREAS, this resolution will identify the process the RUA will follow in order to implement the administrative remedies to be exhausted by property owners under Government Code sections 53759.1. In general, the RUA will make available the proposed rates, post the written basis for the proposed rates on the City’s internet website, provide 45 days for a property owner to review the proposed rates and timely submit to the RUA a written objection to the rates that specifies the grounds for alleging noncompliance with Proposition 218, and require the RUA to consider and respond in writing to timely submitted objections prior to the close of the public hearing described in these recitals; and WHEREAS, for any rates approved by the RUA implementing the procedures described in this resolution, a person or entity shall be prohibited from bringing a judicial action or proceeding alleging noncompliance with Article XIII D of the California Constitution for those rates, unless that person or entity has timely submitted to the RUA a written objection to that rate that specifies the grounds for alleging noncompliance with Proposition 218; and WHEREAS, the RUA Board hereby intends to adopt the exhaustion of administrative remedies procedure as outlined in Government Code section 53759.1, and the administrative record principles contained in Government Code section 53759.2.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE RIALTO UTILITY AUTHORITY AS FOLLOWS:
Section 1: The foregoing recitals are true and correct and incorporated herein by this reference.
Section 2: The RUA Board hereby adopts the utility rate setting procedures attached hereto as Exhibit “A,” and incorporated herein by reference (“Utility Rate Setting Procedures”). The Utility Rate Setting Procedures explicitly incorporate and implement the requirements contained in Proposition 218 and the procedures by which property owners are required to exhaust administrative remedies as set forth in Government Code section 53759.1, subdivision (c).
Section 3: For any rate adopted or approved by the RUA implementing the procedures described in this resolution, a person or entity shall be prohibited from bringing a judicial action or proceeding alleging noncompliance with Article XIII D of the California Constitution for those rates, unless that person or entity has timely submitted to the RUA a written objection to those rates in accordance with this resolution that specifies the grounds for alleging noncompliance with Proposition 218.
Section 4: The RUA Board hereby adopts the administrative record principles contained in Government Code section 53759.2.
Section 5: This resolution will take effect immediately upon adoption by RUA Board, and will apply to any proposed new or increased rates for which notice is provided in accordance with this resolution.
Section 6: The RUA Board authorizes the City Manager to take such other and additional actions as may be reasonably necessary to implement the purpose of this resolution and implement the exhaustion of administrative remedies procedure adopted herein.
PASSED, APPROVED AND ADOPTED this 28th day of October 2025.
JOE BACA, President
ATTEST:
BARBARA A. McGEE, Secretary
APPROVED AS TO FORM:
ERIC S. VAIL, Counsel
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss
CITY OF RIALTO )
I, Barbara A. McGee, Board Secretary of the Rialto Utility Authority, do hereby certify that the foregoing Resolution No. ____ was duly passed and adopted at a regular meeting of the Board of Directors of the Rialto Utility Authority held on the 28th day of October 2025.
Upon motion of Board Member ____________, seconded by Board Member _______________, the foregoing Resolution No. ____ was duly passed and adopted.
Vote on the motion:
AYES:
NOES:
ABSENT:
IN WITNESS WHEREOF, I have hereunto set my hand and the Official Seal of the City of Rialto this 28th day of October, 2025.
BARBARA A. MCGEE, Secretary
Utility Rate Setting Procedures
Resolution No. ____ (Exhibit “A”)
These “Utility Rate Setting Procedures” (“Procedures”) describe the processes that will be followed by the Rialto Utility Authority (“Authority”) in establishing any new or increased water rates or wastewater rates, as summarized in the Resolution identified in the header of this Exhibit “A.” The Utility Rate Setting Procedures include compliance with Proposition 218 (including the consideration of “written protests” from record owners) as well as the procedures for exhausting administrative remedies under Government Code section 53759.1 (including the consideration of “written objections” from record owners).
For the purpose of considering written protests and written objections, the RUA will consider the term “record owner” to include tenancies of real property where tenants are directly liable to pay the rates to the RUA (consistent with Proposition 218; California Constitution Article XIII D, Section 2(g)).
1. Overview of Exhaustion Procedure
If the RUA publishes a notice of public hearing identifying procedures for property owners to submit written objections (described in Section 2(b), below), the RUA will follow the “exhaustion procedure” set forth herein, to be conducted concurrently with the Proposition 218 process, for the RUA Board’s consideration of any proposed new or increased water rates. This exhaustion procedure shall be conducted in accordance with “Proposition 218” (California Constitution Article XIII D; as it is implemented by the Legislature at Government Code sections 53750 – 53759.2; and as it has been interpreted by judicial decisions), and the particular procedures set forth in Government Code section 53759.1. The exhaustion procedure provides an opportunity for record owners to submit a “timely written objection” to identify substantive bases for asserting proposed utility rates do not comply with Proposition 218. A ”record owner” may be referred to in these Procedures as the “owner” or “property owner.” The processes described herein may be referred to as “these Procedures.” a. RUA staff will post on its internet website a notice of the exhaustion procedure, and this notice will be prominently incorporated in the Proposition 218 public hearing notice mailed to each record owner. b. The notice will identify the date and time by which timely written objections must be submitted to the RUA, and the date will be no less than 45 calendar days after the notice is mailed to record owners. c. RUA staff will review timely written objections and draft written responses providing the substantive basis for retaining or altering the proposed utility rates in response to the written objections. RUA staff will present its written responses to the RUA Board prior to the close of the public hearing for the Proposition 218 protest hearing, and the RUA Board will review to determine whether action is needed in response to the written objections or written responses. d. Following the RUA Board’s review and response to timely written objections and written responses, it is within the discretion of the RUA Board to proceed with the Proposition 218 protest hearing process, as described herein, to consider approval of the proposed utility rates. e. Rate Challenger Must Exhaust Administrative Remedies. No claim, suit for damages, suit for injunctive relief, petition for writ of mandamus, or administrative or judicial proceeding shall be brought against the RUA (including the RUA Board, or its employees, officers, or designees) regarding a challenge to a proposed utility rate unless the challenging party first exhausts its administrative remedies by complying with these Procedures and submitting to the RUA a timely written objection.
2. Notice of Proposition 218 Public Hearing and Initiating Exhaustion Procedure Prior to approving or imposing any new or increased utility rates, the RUA will conduct a public hearing and provide prior written notice to each record owner of the hearing and the exhaustion procedure as described in these Procedures. To the extent the RUA sends a regular billing statement for utility service provided to a “customer” (e.g., a “tenant” or other “ratepayer”) who is not the record owner, the RUA will also mail the written notice to the customer at the address for the billing statement. The RUA will mail the public hearing notice to each record owner no later than 45 days prior to the public hearing. The contents of the hearing notice will include:
a. Compliance with Proposition 218:
(1) The date, time, and location of the public hearing. (2) The amount of the utility rates imposed on each parcel. This may be satisfied by identifying the rate amounts for each customer type subject to the rates. (3) The basis upon which the amount of the proposed utility rates were calculated. (4) The reason for the utility rates.
(5) The location to which owners must submit written protests via mail, or personal delivery. (6) To the extent required by Government Code section 54354.5, the notice will identify the opportunity for record owners to be heard as to whether the proposed utility rates are not in compliance with any requirements of the Revenue Bond Law of 1941 (Government Code Sections 53000 – 55821), including: (a) the rates are discriminatory or excessive, or (b) the rates will not be sufficient under the provisions of any outstanding revenue bonds (including Government Code section 54515). (7) How members of the public may obtain additional information regarding the proposed new or increased fee, including a link to information that is available on the City’s website or by requesting a mailed copy. This will include a copy of the resolution or ordinance by which the proposed new or increased utility rates are proposed to be adopted. b. Compliance with the Exhaustion Procedure for Written Objections. If the RUA chooses to follow the exhaustion procedure for written objections, concurrently with mailing the public hearing notice, the RUA will post on the City’s internet website the written basis for the proposed utility rates and a link to the Proposition 218 public hearing notice. The public hearing notice will be supplemented with the following prominently displayed information:
(1) The “deadline” (date and time) by which a “timely written objection” must be submitted to the RUA. The deadline will be no earlier than 45 days after the RUA mails to property owners the notice of the public hearing. (2) The location to which written objections must be submitted to the RUA via mail, personal delivery, or email. (3) All substantive requirements for submitting a written objection. The record owner must comply with the requirements set forth in Procedures section 3, below, including specifying the grounds on which the owner alleges the proposed new or increased utility rates does not comply with Proposition 218. (4) Notice that: (a) any person’s failure to submit a timely written objection bars any right of that person to challenge the proposed new or increased fee through a legal proceeding; and (b) there is a 120-day statute of limitations for challenging the proposed new or increased utility rates (in accordance with Government Code section 53759). c. The RUA will mail the public hearing notice to each record owner of a parcel that is subject to payment of the new or increased fee. The notice shall be mailed to owner’s address shown on the last equalized property tax assessment roll. (1) There is a rebuttable presumption that the most recent equalized property tax assessment roll of the San Bernardino County Recorder is sufficient evidence of the record owner of each parcel. A person may rebut the presumption by providing to the RUA written proof of ownership. (2) The Board Secretary, or designee, may certify by affidavit the proper mailing of notices described in these Procedures, and any such affidavit shall constitute conclusive proof of mailing in the absence of fraud. (3) Failure of any person to receive notice shall not invalidate the hearing or its results. (4) The RUA will also provide supplemental notices to the address where the RUA customarily mails the billing statement for utility rates. d. Concurrently with publishing and mailing the public hearing notice, the RUA will post on its website relevant information regarding the proposed new or increased rates including a copy of the cost of service analysis (which may be referred to as a utility “rate study”) which provides documentation of compliance with all substantive requirements of Prop 218 regarding the calculation of the amount of the proposed new or increased fee.
3. Requirements for Submitting Timely Written Objections In order for a record owner to submit a timely written objection, it must:
a. Be received by the RUA at the location identified on the public hearing notice, no later than the deadline identified on the public hearing notice. The deadline may be no earlier than 45 days after the RUA mails to record owners the notice of public hearing. b. Be in writing (1) identifying the name of the record owner, and the street address or assessor’s parcel number (or other clear identification) of the property subject to the utility rates; and (2) signed by the record owner, or otherwise identifying that the record owner submitted the written objection, subject to verification by the RUA. c. Specify the grounds for alleging the proposed rates do not comply with Proposition 218. The grounds must identify (i) the particular requirement of Proposition 218 that is in question, and (ii) the reason the proposed utility rates do not comply with that requirement. For any proposed new or increased “fee” for a property-related service (such as utility rates), relevant substantive requirements of Proposition 218 include:
(1) Revenues derived from the utility rates shall not exceed the funds required to provide the property related utility service. (2) Revenues derived from the utility rates shall not be used for any purpose other than that for which the fee or charge was imposed. (3) The amount of the utility rates shall not exceed the proportional cost of the service attributable to the parcel. (4) No utility rates may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question. Utility rates based on potential or future use of a service are not permitted. (5) No utility rates may be imposed for general governmental services including, but not limited to, police, fire, ambulance or library services, where the service is available to the public at large in substantially the same manner as it is to property owners.
4. Requirements for Submitting Timely Written Protests
In order for a record owner to submit a timely written protest, to be considered as a part of the Proposition 218 protest hearing described in Section 6, below, it must:
a. Be received by the RUA at the location identified on the public hearing notice, no later than the close of the public testimony portion of the public hearing. b. Be in writing (1) identifying the name of the record owner, and the street address or assessor’s parcel number (or other clear identification) of the property subject to the utility rates; and (2) signed by the record owner, or otherwise identifying that the record owner submitted the written objection, subject to verification by the RUA. A written protest must be submitted in paper form. Any protest will not satisfy this requirement if it is submitted in any non-paper format such as: email, facsimile, or spoken protest via telephone or in person. c. Must clearly identify that the record owner opposes the proposed new or increased utility rates that are the subject of the hearing. The written protest must identify whether the protest is challenging a water rate, a wastewater rate, or both water rate and wastewater rate. d. Will only be counted as one protest per parcel, per the type of rate (water or wastewater) being protested. That means if any one or more record owners of a parcel submits a timely written protest (or timely written objection) for the same parcel and the same type of rate, it will be counted as one timely written protest. e. Record owners of multiple parcels within the RUA may file one protest for each parcel owned within the RUA’s service area. f. A record owner may withdraw a written protest only if the withdrawal is submitted in writing by the record owner clearly indicating an intent to withdraw for an identified property, and it is received by the RUA at the location (and no later than the time) for submitting written protests. After a written protest is withdrawn, a record owner may submit a new or replacement written protest in accordance with the requirements of these Procedures. No other modification to a timely written protest may be made. g. The Board Secretary shall take custody of all submitted written objections and written protests. (1) In order to protect the integrity of the procedures for considering written objections and written protests as described in these Procedures, all written objections and written protests shall remain confidential until the City Manager (or designee) has determined they may be published in accordance with the criteria in paragraph 4(g)(2). (2) Any submitted written objection and written protest shall be a public record, subject to public disclosure under the California Public Records Act (Government Code sections 7920.000, et seq.); however, the RUA may withhold the record if the RUA determines that the public interest served by not disclosing clearly outweighs the public interest served by disclosure under Government Code section 7922.000. As a general rule, the RUA finds there is a substantial public interest in not disclosing written objections and written protests to protect the integrity of the process described herein during the time that: (A) written objections are still being submitted and (B) prior to the time that the Brown Act meeting agenda is posted (e.g., at least 72 hours before a regular meeting under Government Code section 54954.2).
5. RUA’s Response to Timely Written Objections
At the close of the written objection period, RUA staff shall review timely written objections and shall draft written responses to the written objections. The RUA’s written response will include: (i) the grounds on which the objection is (or is not) resulting in amendments to the proposed new or increased utility rates; and (ii) an explanation of the substantive basis for retaining or altering the proposed new or increased utility rates.
RUA staff shall present the written responses to the RUA Board at the public meeting that was specified in the public hearing notice described in Section 2, above. a. In accordance with the Brown Act, the public will be provided an opportunity to address the RUA Board prior to the Board’s action related to the timely written objections and written responses. (See Government Code section 54954.3(a).) b. In accordance with Government Code section 53759.1(d), the RUA Board, in exercising its legislative discretion in considering timely written objections and written responses, shall determine for the proposed new or increased utility rates whether further review, clarification, or reduction is needed, and whether to proceed to the Proposition 218 protest hearing.
6. Conducting the Proposition 218 Protest Public Hearing If the RUA Board determines to proceed to the Proposition 218 protest public hearing for proposed new or increased utility rates (as previously noticed in accordance with Section 2, above), the public hearing shall be conducted consistent with the following:
a. The RUA Board will open the public hearing and consider all evidence presented during the hearing including the public hearing notice and all documents referenced therein (particularly including the Rate Study), all written objections, written responses, written protests, and any testimony, documents, or information presented during the public hearing. b. Prior to closing the public hearing, the RUA Board will request if there are any additional written protests to be submitted to (or withdrawn from) the RUA. c. The RUA Board will then close the public hearing and request a report from the Board Secretary to identify the number of timely written protests compared to the total number of parcels subject to the new or increased fees. (1) A majority protest exists only if the number of timely written protests exceeds one-half of the parcels served by the RUA. (2) If the Board Secretary determines that additional time is needed to tabulate timely written protests, the RUA Board shall recess or continue the public meeting to provide sufficient time for the Board Secretary to complete the tabulation. (3) If the Board Secretary determines that there is a majority protest, the RUA shall not impose the new or increased utility rates. (4) If the Board Secretary determines that there is not a majority protest, the RUA Board shall continue its deliberations and take action on the proposed new or increased utility rates. (5) The Board Secretary determinations under these Procedures shall be the final determination of the RUA subject to appropriate judicial review. This shall include the Board Secretary’s determinations that: (a) a written protest meets the requirements for a timely written protest in accordance with these Procedures; or (b) a majority protest has (or has not) been submitted for the proposed rates. -4-
By following these Procedures, the City also documents compliance with Government Code Section 5956.6 since the City will (a) provide a mailed notice of public hearing at least 14 days prior to the hearing, (b) make public data in support of the fee available to the public at least 10 days prior to the hearing, (c) conduct the public hearing to allow testimony regarding the fee prior to approval, and (d) set the fee in an amount that does not exceed the estimated amount required to provide the service for which the fee is charged. The fee amounts for water rates and wastewater rates shall be approved by ordinance or resolution.
If the City publishes a notice of public hearing that does not identify procedures for property owners to submit written objections, the City will conduct the public hearing in compliance with Proposition 218, and consider any written protests in accordance with these Procedures. 1234567891011121314151617181920212223242526272812345678910111213141516171819202122232425262728 1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28