It sounds to me that they pressurized the plumbing (probably with nitrogen) before proceeding to install the meter, and the system did not hold pressure. They're not allowed to connect water in this situation, lest they flood the building and be held accountable.
Your shut-off valve, and something else downstream, might be leaking just enough to fail this check.

How was the drywall crew going to benefit from hooking up the water if there are no fixtures or faucets for them to use? I think you need to look again. Is there a hose bib or something? Were the drywallers going to install their own? Something does not add up.

There's a hose bib outside next to the cut off valve that I thought the drywall crew could use.

I know something doesn't add up; I just don't know what.

When I bought the house, there was a broken pressurized pipe in the bathroom squirting water everywhere. When I called the water company at that point, they said that there couldn't be any water because I didn't have a meter. And yet the workmen who were gutting the house were getting soaked! A plumber came out to look at things, but didn't do anything. Days later, the water flow mysteriously ceased.

I'm meeting with the city again tomorrow so that I'll at least be able to ask some questions.

the term open pipes, on a utility note mean that there are
pipes in the building that are not caped off..
they must have walked the building and saw uncaped piping
so..knowing that turning on the water will result in water coming out of those open ended pipes..they did not turn it on..you need to cap all pipes and turn on the water
because...with water off..if drywall puts a screw/nail into apipe..you will not know it till latter,,now is when you want to know..knowing latter will cost you money to fix.
right now will cost you nothing..
and...no pipes should EVER be left open..BECAUSE..a tape and float guy could, accidently..drop mud on and end the pipe , plugging it up...more money lost..
a bug..could crawl in there and send you a post card thanking you for his new home..
worse than that a dirt dobber could build a nest and rock your world..you would wind up repiping..cause you would not know where the plug is
and last but not least..the code says to cap pipes when not in use...to PROTECT THEM

or...why dont you turn the water on...stick a meter key on the curb stop and turn it till the arrow points the other way..1/4 turn

Thanks, everyone. I just met with the city worker and he showed me what happens when he turns on the water at the meter--water immediately swells up from the ground between the meter and the house. Thank goodness I hadn't put in a sidewalk yet.

Frodo, I hadn't thought about the drywall guys damaging the pipes with nails. So thanks for the info. I had already covered the toilet drain hole in the floor and the tub/shower drain for fear of drywall dust and mud falling in.

Obviously, I'm new to renovation work, but I am learning!

your fearsare real...the sheetrockers and painters
around here,,there are crews that i can not understand them when they speak..there music is very loud and has a lot of horns and people screaming I---EEEE!!!!any way for some reason..they will pee in the toilet hole, and miss the hole and pee on the floor..they have been known to "poo poo"
in the tub, or aempty 5 gallon bucket..so my point???
cover your pipes!!! turn the water on!!!
i use sheet metal, that covers the closet collar.and 2 closet bolts and nuts to hold it on to the flange
plastic tub protecters....cost about 10 bucks,,they are worth it. put in tub, when you install it
then later..pick it up and toss out the door..tub is actually white!!...also..install nail on stud protectors
[little peice of metal that attaches to stud, stops nails from penitrating wood and pipe