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Commission amends budget to park PFAS settlement proceeds in water reserve
Summary
The commission approved a budget amendment to record expected settlement proceeds from the 3M / DuPont PFAS litigation in the water operations fund and to hold the net proceeds in the water reserve for future utility‑related uses such as system investments, operations or rate stabilization.
The commission voted Tuesday to amend the fiscal‑year 2024‑25 budget to record anticipated proceeds from multi‑jurisdictional settlements related to PFAS (the chemical family often associated with the 3M and DuPont litigation) and to place the city’s share in the water operations reserve.
Finance staff told commissioners that the city expects settlement receipts in the coming months; the amendment records the funds in the city’s accounting system and earmarks the net proceeds for the water operations fund reserve. The resolution (R2025‑65) leaves final allocation decisions — for example, whether proceeds will be directed to capital investments, operations, or rate stabilization — to the budget process and to subsequent commission direction.
Chief Financial Officer Tariq Ramani told the commission staff will bring proposed allocations and a plan for any necessary capital projects or operational spending once the funds are received and the precise settlement amounts are finalized.
Why it matters: PFAS‑related settlements are providing federal‑ and state‑level recoveries to governments and utilities. The city’s action sets aside its expected share of proceeds in the water reserve so the funds can be used for utility purposes rather than general operating expenses.
Next steps: Staff will report back during the regular budget cycle with a recommended allocation plan for the funds and any project schedules or rate impacts associated with using the money for infrastructure or treatment investments.
