Storm Water Management Fee

Storm Water Management rendering
In April 2017, Palo Alto property owners voted to approve a new Storm Water Management fee that will replace the City's existing Storm Drainage fee. The fee was approved by approximately 64 percent of those submitted with 50 percent needed to pass. At the time of the new fee’s implementation, effective June 1, 2017, a typical homeowner paid about $13.65 per month. The approved ballot measure contained an annual fee escalator clause that permits the Council to consider raising the Storm Water Management Fee each year to account for inflationary cost increases. Per the ballot measure: 
“In order to offset the effects of inflation on labor and material costs, the maximum rate for the Storm Water Management Fee (and each component of the Storm Water Management Fee) will be increased annually each July 1 (beginning July 1, 2018), by the lesser of (i) the percentage change in the Consumer Price Index [CPI] for the San Francisco-Oakland-San Jose CSMA, published by the United States Department of Labor, Bureau of Labor Statistics during the prior calendar year or (ii) 6%. The City Council would have the authority to set the rate for the Storm Water Management Fee (and each component of the Storm Water Management Fee) at any rate that is less than or equal to the inflation adjusted maximum rate.” 
The Storm Water Management Fee rate is approved and set by the City Council. It is charged per Equivalent Residential Unit (ERU) to customers on a monthly basis. The current fee rate and information regarding how the fee is charged to customers is detailed in the Utility Rate Schedule D-1(PDF, 109KB). Additional background information about ERUs and inflation adjustments can be found in the Frequently Asked Questions

The Storm Water Management Program funds storm drain capital improvement projects, enhanced maintenance of the storm drain system, and storm water quality programs that keep the City's storm water infrastructure clean and at peak performance and provides for storm water system improvements that prevent street flooding. The program also provides litter reduction, creek pollution prevention programs, commercial and residential rebates, and flooding emergency response services as well as the implementation of Green Stormwater Infrastructure (GSI) projects, which include infiltrating and cleansing stormwater to decrease peak flows to the conveyance system. 

New Fee Components

  1. A Base Component which is 55 percent of the total fee to pay for ongoing expenditures associated with stormwater system maintenance, engineering design and analysis of rehabilitation projects, litter and water pollution prevention programs and regulatory compliance. This component is an ongoing fee and is subject to an annual City Council-approved adjustment for inflation. 

  2. A Projects and Infrastructure Component which is 45 percent of the total fee is initially used to generate $3.1 million annually for new stormwater system capacity improvements, system upgrades, and  GSI projects. This component is subject to an annual City Council-approved adjustment for inflation and would end in 15 years (on June 1, 2032) unless further extended by voters through a subsequent ballot measure. Revenue from this fee component will fund: 
  • $1,281,000 in the initial year for storm drain system capacity improvements. Over the 15-year life of the ballot measure, it is projected that there will be adequate funding for approximately 13 projects; 
  • $947,000 for debt service for past storm system improvements through FY 2024; 
  • $400,000 annually for stormwater system replacement and rehabilitation; 
  • $380,000 annually for GSI projects; and 
  • $125,000 annually for residential and commercial rebates for installing GSI measures such as of cisterns, rain barrels, pervious paving and green roofs.