Upland adopts first-ever utility reserve policy, carves out PFAS fund

The Upland City Council on April 13 adopted the city's first comprehensive utility reserve policy for its water and sewer enterprise funds, a measure staff said is designed to reduce the need for costly bonding and to set aside money for emerging contaminants.

Assistant City Manager Damien Arula and public works staff told the council the policy establishes target minimum and maximum reserve levels for debt service, operating needs, capital replacement, rate stabilization, and dedicated reserves for PFAS and TCP remediation. Staff said the policy ties reserves to the long-term capital replacement schedule in the city's water and sewer master plans and provides a framework for when excess funds may be used for one-time capital projects, debt paydown, or to offset future rates.

The council pressed staff on public communication and staffing. Public works officials said the department currently has about 47 filled water positions, with six vacancies and six recently approved positions pending; staff said some weekend and overtime work is being used to maintain service while hiring continues. Staff also pledged to prepare a PFAS strategic plan and to produce public-facing materials explaining enterprise funds, reserve purpose, and potential impacts on ratepayers.

During discussion, council members emphasized that enterprise funds are legally restricted for utility purposes and cannot be diverted to the general fund. Staff said constructing a dedicated PFAS reserve and reserving potential litigation recoveries for remediation would make the city more competitive for matching grants and clarify how any future settlements would be used.

The motion to adopt the water and sewer reserve policies passed unanimously. Staff said next steps include implementing the policy, updating public materials, and returning with any technical refinements identified during implementation.

Actions: The council approved the resolutions implementing the proposed water and sewer reserve policies and associated appropriations. The action was approved by motion and recorded as passed unanimously.