Yuba City is poised to start work on connecting 4,000 Hillcrest households to city surface water after opponents failed to defeat a water connection surcharge Monday.

Veto of the nearly $20-per-month surcharge would have required just over 2,000 Proposition 218 protest ballots. But opponents could only muster up 807 protest votes: 634 in Region 2/3 and 173 in Region 1.

The City Council voted unanimously to introduce an ordinance for the water surcharge after hearing the results from City Clerk Terrel Locke.

"This is put to bed now, the city can move forward," said Mayor Rory Ramirez in his last meeting with the council.

But opponents may not let it sleep just yet. They are considering whether to file a legal challenge to the city's sur-

charge, which they are calling a tax for an improvement, said Elaine Miles, a Hillcrest resident who has spoken against the surcharge.

"The issue is not surface water, the issue is the fairness of this tax," said Miles.

The project also has to be designed and put out to bid. If bid offers are above the amount of the surcharge, the city would have to repeat the Proposition 218 process a third time.

Some opponents said they were against a Hillcrest area-only surcharge to pay for the pipes and storage tanks to hook the area up to city surface water. A major pipe will be upsized beyond Hillcrest needs to handle water for future development, but the city said it is paying for the added cost of the piping.

"I say this cost should be borne by all of the city, and not just this one area," said Suzanne Connelly, a Hillcrest resident.

Others were happy to pay the surcharge, saying it would be less than the costs of water softener salts, bottled water and appliance replacement.

"I just feel it would be a much better choice," said Deb Fahs, who lives in Region 2.

The city has been proposing a surface-water connection to replace the Hillcrest groundwater source. Hillcrest water is high in arsenic and requires extensive treatment — something the plant is not designed for, and which reduces the plant's water output, according to the city.

At one point the city issued a notice to residents about the high arsenic levels.

City officials said at Monday's meeting that one of the Hillcrest wells had to be taken out of service because it collapsed and was "pumping gravel" with production of 10 percent of normal.

Some surcharge foes questioned the city's maintenance of the Hillcrest water plant.

Monday's hearing could mark the beginning of the end of the controversial Hillcrest water issue which has been battled out in meetings since 2007. Monday's Proposition 218 hearing was the second one for the city after a previous attempt failed overall but passed in Region 1, prompting another try after some claimed they were misinformed.

Hillcrest residents could see the surcharge on their water bills by the summer of 2010, a month after the connecting pipes and storage tanks are completed, according to city officials.