1. Executive Overview & Major Council Actions

The July 27, 2026, Upland City Council meeting focused primarily on the City's proposed Business License Tax restructuring, utility collection efforts, long-term water planning, and routine municipal operations. While several consent calendar items were approved unanimously, the most significant outcome was the Council's decision to postpone action on the proposed Business License Tax following extensive feedback from the local business community.

Business License Tax Proposal Deferred (Item 13A)

At the beginning of the meeting, the Mayor announced that Item 13A had been removed from the agenda after receiving substantial input from local businesses and the Upland Chamber of Commerce. Rather than proceeding with the proposal as presented, the Council directed staff to revise the ordinance by reducing the proposed tax rates by approximately 25% to 30%. A Special City Council Meeting was scheduled for Monday, August 3, 2026, to review the revised proposal.

Delinquent Utility Accounts Transferred to the Property Tax Roll (Items 11A & 11B)

The Council approved the annual placement of delinquent utility accounts onto the San Bernardino County property tax roll to improve collection rates.

Approved transfers included:

• 211 delinquent water and sewer accounts totaling approximately $286,000

• 770 delinquent Burrtec refuse accounts totaling approximately $161,000

2025 Urban Water Management Plan Adopted (Item 11D)

The Council unanimously adopted the City's 2025 Urban Water Management Plan and Water Shortage Contingency Plan. The adopted plan projects that Upland will maintain 100% water supply reliability through 2050, even under extended drought conditions.

Annual Weed Abatement Program (Item 11C)

The Council approved the annual Weed Abatement Report. Of the ten properties originally identified for enforcement, nine owners voluntarily brought their properties into compliance. The Council authorized contractor abatement for the lone remaining non-compliant parcel located at 649 W. Vernon Avenue.

Council Advisory Appointment (Item 10B)

The Council unanimously approved the appointment of Michael Miller as Councilmember Garcia's advisory representative.

2. Business License Tax Restructuring (Item 13A)

Although postponed, the Business License Tax proposal generated the most extensive discussion of the evening and highlighted the City's ongoing effort to address its structural budget deficit while balancing concerns raised by the business community.

Fiscal Objectives

Upland's current Business License Tax structure has remained largely unchanged for more than 31 years and presently generates approximately $1.2 million annually.

The proposed restructuring sought to generate an additional $2.8 million, increasing annual Business License Tax revenue to approximately $4.0 million.

Approximately 70% of the new revenue, about $1.96 million annually, was designated to support General Fund personnel costs, including employee salaries, benefits, and pension obligations.

City staff presented the proposal as one component of addressing the recently adopted $5.6 million General Fund budget deficit.

Business Community Concerns

Throughout public testimony, business owners and representatives from the Upland Chamber of Commerce expressed concern that the proposal would disproportionately affect many local businesses.

Small and Mid-Sized Businesses

The Chamber noted that businesses generating between $100,000 and $1.5 million in annual gross revenue would experience some of the largest increases under the proposed fee schedule.

Several business owners testified that their annual business license fees would increase by as much as seven times their current amount.

Larger Businesses

According to the staff report, approximately 610 licensed businesses in Upland report annual gross revenues exceeding $1 million.

Public testimony indicated these businesses would experience average increases of approximately 6.6 times their current business license fees.

Micro-Businesses

Approximately 3,400 of Upland's roughly 6,000 licensed businesses generate less than $100,000 in annual gross revenue.

Discussion also focused on the administrative cost of collecting these smaller license fees. The City's collection contractor, HDL, reportedly charges approximately $20 per account, leaving the City with only about $30 in net revenue from each minimum-fee account.

Several speakers noted that neighboring cities maintain significantly higher minimum business license fees, generally ranging from $250 to $450 annually.

Gross Receipts Versus Net Profit

One of the primary concerns raised by opponents involved the use of gross receipts rather than net income as the basis for calculating the tax.

Business owners emphasized that industries operating on narrow profit margins, particularly restaurants, retailers, and grocery businesses, could be disproportionately impacted.

As one example discussed during the meeting, a restaurant generating $100,000 in annual sales while operating on a 3% to 4% profit margin would retain only $3,000 to $4,000 in actual profit, yet its tax obligation would be based on the entire $100,000 in gross revenue.

Downtown Business Concerns

Several Downtown Upland business owners also explained that they already pay additional assessments through the Property and Business Improvement Area (PBIA).

Depending on the business, those assessments currently range from approximately 20% to 244% of their existing business license fee, creating concerns about the cumulative financial impact of the proposed tax increase.

Regional Competitiveness

Comparative information presented during the meeting indicated that Upland's proposed Business License Tax rates would be substantially higher than those charged by neighboring cities, including:

• Rancho Cucamonga

• Ontario

• Montclair

Comparisons were also made with municipalities throughout Los Angeles and Orange counties.

Business representatives argued that significantly higher local tax rates could reduce Upland's competitiveness when attracting and retaining businesses.

Local Sales Tax Trends

Council discussion also referenced recent sales tax performance.

According to the data presented:

• Upland's Q4 2025 taxable sales declined 10.3% compared with Q4 2024.

• During the same period, San Bernardino County taxable sales increased 5.9%.

• Taxable sales across Southern California increased 0.9%.

These figures became part of the broader discussion regarding the City's economic environment and the potential impact of increasing business costs during a period of declining local sales activity.

3. Utility Collections & Delinquent Account Recovery (Items 11A & 11B)

The Council also reviewed the City's annual delinquent utility account recovery program.

Water and Sewer Accounts

The approved transfer included 211 delinquent water and sewer accounts totaling approximately $286,000.

The accounts consisted of:

• 201 single-family residential

• 7 multi-family residential

• 3 commercial

Staff reported that collection efforts significantly reduced the number of delinquent accounts prior to Council approval.

The process began with:

• 263 accounts totaling approximately $350,000

Following payment notices and customer outreach, balances declined to:

• 219 accounts totaling approximately $295,000

By the time of the Council meeting, additional payments further reduced the total to:

• 211 accounts totaling approximately $286,000

Collection Effectiveness

Staff compared several collection methods.

Property Tax Roll

Placing delinquent utility charges on the property tax roll consistently produces collection rates between 95% and 98%, making it the City's most effective recovery method.

Collection Agency

The City previously referred:

• 149 accounts

• Approximately $151,000

to a third-party collection agency.

Only:

• 30 accounts

• Approximately $16,000

were ultimately recovered, an overall recovery rate of approximately 11%, an improvement over the City's historical recovery rate of about 8%.

Franchise Tax Board Intercept

The City also submitted:

• 163 delinquent accounts

• Approximately $438,000

to the State Franchise Tax Board's debt intercept program.

Payments were received on only 14 accounts.

Historical Results

Staff noted that the property tax roll continues to be the City's most successful collection tool.

Following the August 2025 tax roll transfer, the City recovered nearly $800,000 in previously unpaid utility charges from 588 delinquent accounts during Fiscal Year 2026.

Burrtec Refuse Accounts

The Council also approved transferring 770 delinquent refuse accounts totaling approximately $161,000 to the County property tax roll.

These accounts included:

• 573 single-family residential

• 49 multi-family residential

• 45 commercial

4. Unfunded Regional Mandates & Fiscal Challenges

Councilmember James Breitling provided an update regarding the proposed Santa Ana Regional MS4 Stormwater Permit, describing its potential fiscal impact on the City.

According to an independent Beacon Economics analysis discussed during the meeting, compliance with the proposed permit could cost the City approximately $390 million, including:

• $264 million in required capital infrastructure improvements.

• Approximately $6 million annually in ongoing operational expenses.

Councilmember Breitling noted that the annual operating costs alone could consume more than 90% of Upland's current General Fund budget.

This discussion occurred against the backdrop of the City's existing infrastructure needs, which include an estimated $240 million in deferred street and sidewalk repairs.

Following testimony from Upland and other affected cities, the Santa Ana Regional Water Quality Control Board postponed final consideration of the permit until September 2026 to further evaluate its financial implications.

5. Environmental & Water Management Programs

Weed Abatement Program (Item 11C)

Staff reported continued improvement in the City's annual weed abatement program.

In prior years, approximately 300 properties required enforcement action. That number has now declined dramatically due to improved compliance efforts.

This year, only 10 properties initially required action, with nine owners voluntarily correcting violations before enforcement became necessary.

The remaining parcel at 649 W. Vernon Avenue accumulated approximately $640 in fees and penalties. Staff also noted that a brush fire occurred on the property on July 4, 2026, reinforcing the public safety importance of maintaining defensible space.

Urban Water Management Plan (Item 11D)

The newly adopted 2025 Urban Water Management Plan confirmed that Upland continues to exceed California's water conservation requirements.

Under SBX7-7, Upland's conservation target was 220 gallons per capita per day (GPCD).

The City currently averages approximately 210 GPCD, outperforming the state conservation target.

Based on current water supply planning, the City projects 100% water supply reliability through 2050 under:

• Normal water conditions

• Single-year drought conditions

• Extended five-year drought scenarios

6. Upcoming City Events & Meetings

The Council also highlighted several upcoming community events and meetings:

• Special City Council Meeting (Business License Tax): Monday, August 3, 2026

• National Night Out: Tuesday, August 4, 2026, at Upland High School (Inner Quad)

• Second on Second: Saturday, August 8, 2026, in Historic Downtown Upland

• Next Regular City Council Meeting: Monday, August 10, 2026

Disclaimer: The Upland Update is an independent community resource and is not affiliated with the City of Upland. This is my personal initiative to keep residents and businesses informed about key issues, city developments, and community events that impact our daily lives. My goal is to ensure you have clear, transparent, and timely information to stay engaged and involved in shaping Upland’s future.

James Breitling

(909) 342-2523

info@theuplandupdate.com

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