Upland City Council Special Meeting – August 3 Recap
Proposed Business License Reform Measure intended for the November 2026 ballot.
August 3 City Council Meeting Recap
1. Call to Order and Roll Call
The special meeting of the Upland City Council commenced at 5:02 p.m. in the Council Chambers.
Attendance:
Council Member Garcia: Present
Council Member Zuniga: Present
Council Member Breitling: Present
Mayor Pro Tem Maust: Present
Mayor Velto: Present
2. Public Communications on Agenda Items
Members of the public provided testimony regarding the proposed business license reform measure. The comments reflected a range of concerns regarding economic competitiveness and municipal fiscal management.
Opposition Perspectives
Upland Chamber of Commerce: Chairman DorI Ferronto acknowledged the city's good-faith dialogue but stated the board opposes the measure. The Chamber argues the fee structure remains disproportionately burdensome for mobile professional service firms and midsize businesses, making Upland less competitive than neighboring cities.
Small Business Concerns: Speakers cited a 10.3% decline in Upland's sales receipts (Q4 2025) and argued that increasing fees in a challenging economic environment would drive businesses away.
Fiscal Management: Critics argued that 70% of the new revenue would be used for salaries and pensions rather than infrastructure. They suggested that the city's $241 million unfunded street maintenance liability cannot be solved by the projected $2.1 million in new annual revenue.
Process and Alternatives: Some residents characterized the process as "rushed" and suggested a sales tax increase would be a more equitable way to fund infrastructure, as it would not fall solely on business owners who may not have a vote in the city.
Support and Comparative Perspectives
Modernization Necessity: Dan Richards of The Colonies argued that maintaining a fee structure unchanged since 1990 is "absurd." He noted that Upland’s competitors (Rancho Cucamonga, Ontario, Fontana) generate significantly higher sales tax revenue and have larger staff counts, suggesting Upland is operating lean.
Regional Context: Francisco Olivarez (City of Ontario) provided data on Ontario’s gross receipts model, which features no caps or tiers, resulting in higher fees for high-revenue businesses.
Equity: Supporters noted that under the current flat-cap system, small businesses pay a predominant share of costs relative to large retailers like Home Depot.
3. Agenda Item 3A: Business License Reform Measure
The Council considered resolutions to place a business license reform measure on the November 2026 ballot.
Conflict of Interest Verification
The City Attorney confirmed that Council Members Zuniga and Garcia, along with Mayor Pro Tem Maust, do not have a conflict of interest despite owning local businesses. Under FPPC regulations, their interests are "indistinguishable from the public generally" because the measure affects a broad segment of businesses (ranging from 27% to 39% of similarly situated entities).
Staff Presentation: Model 3C
Assistant City Manager Steven Parker presented the "Model 3C" proposal, which was revised following stakeholder input.
Key Features of the Reform:
Gross Receipts Model: Transitions most licenses to a gross receipts basis to ensure larger businesses pay a share commensurate with their impact on city services.
Small Business Relief: Over 50% of businesses (those with gross receipts under $500,000) will see a tax reduction.
Phased Implementation: The rate changes will be split over two years (Year 1 in 2027; Year 2 in 2028).
Revised Minimums and Caps:
The minimum tax is set at $75 (covering the first $100,000 in receipts).
The maximum annual tax is capped at $28,000.
Inflation Protection: A Consumer Price Index (CPI) adjustment will be applied to the $75 minimum, the $28,000 cap, and the $50-per-door self-storage fee.
Exclusions: Gross receipts from the sale of investment bullion ($2,000+) are excluded per state regulation.
PBIA Protection: Downtown businesses in the Parking and Business Improvement Area (PBIA) will have their assessments fixed to the 2026 rate structure to avoid a "double ding."
Fiscal Justification and Comparisons
Structural Deficit: Upland faces a structural deficit of $5.7 million to $6.1 million over the next two fiscal years.
Revenue Gap: The city lacks the alternative revenue sources utilized by neighbors, such as Utility Users Taxes (UUT) or significant special assessment districts.
Infrastructure Crisis: The city's Pavement Condition Index (PCI) score has dropped to 52 (the second lowest in the region). The $2.1 million in new revenue is viewed as a "triage" measure to slow the deterioration of 229 miles of streets and 343 miles of sidewalks.
4. Council Discussion and Treasurer's Report
City Treasurer’s Analysis
Treasurer Greg Bradley supported the measure, describing the current system as "broken" and "out of date."
Inflationary Context: He noted that the 1994 fee of $864 would be nearly $2,000 today if indexed for inflation.
The "Home Depot" Example: Bradley highlighted that a massive retailer like Home Depot currently pays the same $864 cap as a small lumber yard did decades ago, which he termed "absurd."
Fiscal Stability: He credited the city for improving finances since the 2012 "going concern" crisis but warned that the $16 million contingency fund would be exhausted without new revenue.
Council Deliberations
Service Impact: Mayor Velto emphasized that 70% of police calls for service originate from businesses, justifying the need for businesses to contribute to the general fund.
Lean Operations: Council members argued that the city has already "cut to the bone," citing police staffing levels that remain at 1990 levels.
Educational Campaign: Council Member Breitling and Mayor Pro Tem Maust stressed the importance of a robust, factual education campaign to combat misinformation on social media and clarify that most small businesses will see a decrease in fees.
Democratic Process: The consensus among the Council was that their role is not to impose the tax, but to give residents the constitutional right to vote on the city's financial future.
5. Final Action
The Council voted to adopt the resolutions placing the Upland Business License Reform Measure on the November 3, 2026, general municipal election ballot.
The motion included:
Calling for the placement of the measure on the ballot.
Requesting consolidation with the statewide general election.
Providing for filing of primary and rebuttal arguments.
A clerical amendment to Section 5.04.360 to ensure proper subsection referencing for the $28,000 cap.
Vote Result: Passed Unanimously (5-0).
Adjournment: The meeting adjourned at the conclusion of the vote.
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
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info@theuplandupdate.com
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