Stormwater Management Fee

Background

The Stormwater Management Fee (SWMF) is a voter-approved fee charged to residential property owners. The SWMF helps keep water clean and reduces street flooding by funding projects that maintain and improve Palo Alto’s stormwater system. Many of the projects and services funded by the Fee are requirements of the Municipal Regional Stormwater Permit issued by the regional water board.

The stormwater system is comprised of infrastructure that conveys stormwater from the urban landscape to the streams and San Francisco Bay. It includes gutters, storm drains, pipes, and pumps, as well as green stormwater infrastructure and trash capture devices that help keep our waterways clean.

The monthly Stormwater Management Fee is charged to landowners per Equivalent Residential Unit (ERU). Utility Rate Schedule D-1(PDF, 258KB) describes how ERUs are calculated and lists the current Fee rate. The Fee rate can increase annually based on the Consumer Price Index (CPI) to offset inflation for labor and material costs. City Council is authorized to set the fee at any rate less than or equal to the inflation-adjusted rate, as long as that rate is less than six percent.

The City Council is responsible for approving any fee increases for each new fiscal year. Changes are applied to utility bills starting as early as July 1. The Stormwater Management Oversight Committee oversees appropriate use of SWMF funds, and City Council approves any necessary fee increases each year.

Projects and Services funded by the Stormwater Management Fee

The Stormwater Management Fee includes two components:

1. The Base Component funds ongoing stormwater system management and maintenance. Fifty-five percent of the Stormwater Management Fee is allocated to the Base Component which includes:

• Routine stormwater system maintenance (e.g., cleaning and flushing lines)
• Inspections for the stormwater system rehabilitation and replacement
• Litter and water pollution prevention programs such as street sweeping and creek clean-ups
• Ensuring the City meets regulatory requirements to protect creeks and the San Francisco Bay from pollutants. This regulatory compliance includes outreach, education, inspections, and enforcement of regulations that apply to businesses and residents Response to flooding and other stormwater emergencies

2. The Projects and Infrastructure Component funds new stormwater system capacity improvements, system upgrades, and green stormwater infrastructure projects. Forty-five percent of the Fee is allocated to this component. Projects include:

• Thirteen storm drain system capacity improvements(PDF, 499KB)
• Debt payments for seven previous stormwater system improvements
• Stormwater system replacements and rehabilitation
• Public green stormwater infrastructure projects such as the bioretention area in Rinconada Park
• Residential and commercial rebates for green stormwater infrastructure such as rain barrels, rain gardens, and pervious paving

Fiscal Responsibility and Accountability

Three elements of the SWMF are intended to ensure fiscal responsibility and accountability:

1. The project and infrastructure component of the Fee sunsets in 2032, providing voters another opportunity to weigh in on that element of the Fee. The base component of the Fee does not sunset.
2. The Fee increase is capped at six percent and is subject to City Council approval. City Council is authorized to approve annual Fee increases based on the Consumer Price Index (CPI), but that increase cannot exceed six percent.
3. The Stormwater Management Oversight Committee ensures money raised by the Fee is spent in accordance with the ballot measure that passed in 2017.

In addition to fiscal responsibility as described above, projects funded by the Fee are held accountable in terms of their environmental impact by regional, state, and federal regulations (e.g. Municipal Regional Stormwater Permit, California Environmental Quality Act).