Finance committee recommends 2.4% stormwater fee rise — $0.40 monthly increase

The Palo Alto Finance Committee on March 4, 2025, voted unanimously to recommend that the City Council adopt a resolution amending the stormwater and surface water drainage fee schedule to reflect a 2.4% consumer price index adjustment, increasing the monthly residential equivalent unit from $17.20 to $17.61 — a $0.40 rise.

The fee increase implements a voter‑approved index tie in the existing stormwater ballot measure and is intended to fund both ongoing stormwater operations and capital projects. Cara North, assistant director, Environmental Services Division, told the committee the stormwater management fee is divided into two components: a base component that comprises roughly 55% of the fund and covers ongoing programs such as litter and pollution prevention, engineering, storm drain maintenance and emergency response, and a second component of about 45% that pays for infrastructure projects and is scheduled to sunset on June 1, 2032.

North said voters approved 13 projects under the ballot measure; three of those projects have been completed. She identified Hamilton Avenue and Center Drive among projects currently in design and said several projects will move into construction this year. North also told the committee that the city has encountered difficulty getting competitive bids and that construction costs have escalated.

Committee members asked whether the enterprise is part of the general fund; North said the stormwater fee is held in a separate enterprise fund managed by her team and that any transfer of general‑fund money into the enterprise would require City Council approval. A member asked why the CPI was used as the indexing mechanism; North said that was the design approved by the Green Ribbon Stormwater Committee and presented to voters.

Chair Burt moved the recommendation to forward the resolution amending the utility rate schedule (Schedule D‑1) to the City Council; a second was recorded but not named in the transcript. The committee approved the recommendation unanimously (yes: 4, no: 0). The committee also asked Public Works staff to include a status update and schedule for the Hamilton Avenue project when the item goes to council.

The committee’s recommendation advances the CPI‑based increase to the City Council for final action. The committee and staff noted the fee is voter‑approved and that the CPI tie was part of that approval; staff advised that implementation of property‑related fee changes must meet the city’s 60‑day noticing requirements if adopted by council.