HomeMy WebLinkAboutStaff Report 14107
City of Palo Alto (ID # 14107)
Finance Committee Staff Report
Meeting Date: 5/3/2022 Report Type: Action Items
City of Palo Alto Page 1
Title: Adoption of a Resolution Amending Utility Rate Schedule D -1 (Storm
and Surface Water Drainage) Reflecting a 4.2 Percent Consumer Price Index
Rate Increase to $15.98 Per Month Per Equivalent Residential Unit for Fiscal
Year 2023
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that the Finance Committee recommend that Council adopt the attached
resolution (Attachment A) amending Utility Rate Schedule D-1 (Storm and Surface Water
Drainage), to implement a 4.2% rate increase consistent with the applicable Consumer Price
Index, increasing the monthly charge per Equivalent Residential Unit (ERU) by $0.64, from
$15.34 to $15.98 for Fiscal Year 2023.
Background
In April 2017, a majority of Palo Alto property owners approved a ballot measure adopting a
monthly Storm Water Management Fee to fund storm drain capital improvement projects,
enhanced maintenance of the storm drain system, storm water quality protection programs
and related activities. The ballot measure authorizes the Council to consider raising the Storm
Water Management Fee each year to account for inflation and subject to a maximum annual
increase of 6%. Specifically, the ballot measure stated that:
“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 Manageme nt 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.”
On June 21, 2021, Council adopted a resolution to implement the Storm Water Management
Fee to be $15.34 per month per ERU, effective July 1, 2021.
1
Packet Pg. 3
City of Palo Alto Page 2
Discussion
According to Bureau of Labor Statistics records, the CPI for the San Francisco -Oakland-San Jose
CMSA increased by 4.2% between December 2020 and December 2021. This CPI increase is
substantially lower than the 6% maximum allowable increase, and therefore consistent with the
ballot measure, staff recommends that the Storm Water Management Fee be increased by
4.2% to allow fee revenues to keep pace with general cost increases and to provide sufficient
funds for planned storm water management capital and operating expenditures. To enact the
Storm Water Management Fee increase, Council must adopt the attached resolution amending
Utility Rate Schedule D-1 (Storm and Surface Water Drainage). The new rate for the Storm
Water Management Fee will be $15.98 per month per ERU. Single-family residential properties
are billed a monthly amount based on parcel size, in accordance with the following table:
RESIDENTIAL RATES (Single-Family Residential Properties)
PARCEL SIZE (sq.ft.) ERU
< 6,000 sq.ft. 0.8 ERU
6,000-11,000 sq.ft. 1.0 ERU
> 11,000 sq.ft. 1.4 ERU
Commercial, industrial, institutional, and multi-family residential properties are billed monthly
at a rate of 1.0 ERU for each 2,500 square feet of impervious surface on the parcel.
Timeline
The Stormwater Management Fee increase will take effect on July 1, 2022.
Resource Impact
The 4.2% fee increase is expected to increase annual revenue to the Stormwater Management
Fund by approximately $312,000 and, if adopted, will be reflected in the Public Works
Department Stormwater Management Fund Fiscal Year 2023 Operating Budget revenue.
Policy Implications
The Stormwater Management Fund supports the City’s Sustainability and Climate Action Plan
goals.
Stakeholder Engagement
Stakeholder engagement occurs throughout the year during the Stormwater Management
Committee meetings that occur on the first Thursday of even months. The Committee’s role is
to review the budget of the Stormwater Management Fee.
Environmental Review
Council action on the proposed resolution is not a project subject to CEQA review because it is a
fiscal activity which does not involve any commitment to any specific project which may result
in a potentially significant physical impact on the environment. (CEQA Guidelines Section
1
Packet Pg. 4
City of Palo Alto Page 3
15378(b)(4).
Attachments:
• Attachment A: DRAFT Resolution Amending Utility Rate Schedule D -1 (Storm and
Surface Water Drainage)- track changes
1
Packet Pg. 5
NOT YET APPROVED
1
Resolution No. ______
Resolution of the Council of the City of Palo Alto Amending Utility Rate
Schedule D-1 (Storm and Surface Water Drainage) to Increase Storm
Water Management Fee Rates by 4.2% Per Month Per Equivalent
Residential Unit for Fiscal Year 2023
The Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule D-1 (Storm and Surface Water Drainage) is hereby amended to read in accordance
with sheet D-1-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule,
as amended, shall become effective July 1, 2022.
SECTION 2. The Council finds that this rate increase is being imposed to offset the
effects of inflation on labor and material costs pursuant to the annual inflationary fee escalator
provision of the Storm Water Management Fee ballot measure, which was approved by a
majority of Palo Alto property owners on April 11, 2017.
SECTION 3. The Council finds that the revenue derived from the authorized adoption
enumerated herein shall be used only for the purpose set forth in Article VII, Section 2, of the
Charter of the City of Palo Alto.
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
/ /
1.a
Packet Pg. 6
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
D
R
A
F
T
R
e
s
o
l
u
t
i
o
n
A
m
e
n
d
i
n
g
U
t
i
l
i
t
y
R
a
t
e
S
c
h
e
d
u
l
e
D
-
1
(
S
t
o
r
m
a
n
d
S
u
r
f
a
c
e
W
a
t
e
r
D
r
a
i
n
a
g
e
)
-
t
r
a
c
k
c
h
a
n
g
e
s
(
1
4
1
0
7
:
NOT YET APPROVED
2
SECTION 4. The Council finds that the adoption of this resolution changing the Storm
Water Management Fee to meet operating expenses, purchase supplies and materials, meet
financial reserve needs and obtain funds for capital improvements necessary to maintain service
is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public
Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a).
After reviewing the staff report and all attachments presented to Council, the Council
incorporates these documents herein and finds that sufficient evidence has been presented
setting forth with specificity the basis for this claim of CEQA exemption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ _____________________________
Assistant City Attorney City Manager
_____________________________
Director of Public Works
_____________________________
Director of Administrative
Services
1.a
Packet Pg. 7
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
D
R
A
F
T
R
e
s
o
l
u
t
i
o
n
A
m
e
n
d
i
n
g
U
t
i
l
i
t
y
R
a
t
e
S
c
h
e
d
u
l
e
D
-
1
(
S
t
o
r
m
a
n
d
S
u
r
f
a
c
e
W
a
t
e
r
D
r
a
i
n
a
g
e
)
-
t
r
a
c
k
c
h
a
n
g
e
s
(
1
4
1
0
7
:
GENERAL STORM AND SURFACE WATER DRAINAGE
UTILITY RATE SCHEDULE D-1
CITY OF PALO ALTO UTILITIES
Issued by the City Council
Effective 7-1-2022
Supersedes Sheet No.D-1-1 dated 7-1-2021 Sheet No. D-1-1
A. APPLICABILITY:
This schedule applies to all Storm and Surface Water Drainage Service, excepting only those
users and to the extent that they are constitutionally exempt under the Constitution of the
State of California or who are determined to be exempt pursuant to Rule and Regulation 25.
B. TERRITORY:
Inside the incorporated limits of the city of Palo Alto and land owned or leased by the City.
C. RATES:
Per Month:
Storm Water Management Fee per Equivalent Residential Unit (ERU) .......................... $15.98
D. SPECIAL NOTES:
1. An Equivalent Residential Unit (ERU) is the basic unit for computation of storm
drainage fees for residential and non-residential Customers. All single-family
residential properties shall be billed the number of ERUs specified in the following
table, based on an analysis of the relationship between impervious area and lot size for
Palo Alto properties.
RESIDENTIAL RATES (Single-Family Residential Properties
PARCEL SIZE (sq.ft.) ERU
<6,000 sq.ft. 0.8 ERU
6,000 - 11,000 sq.ft. 1.0 ERU
>11,000 sq.ft. 1.4 ERU
All other properties will have ERU's computed to the nearest 1/10 ERU using the
following formula:
No. of ERU = Impervious Area (Sq. Ft.)
2,500 Sq. Ft.
2. For more details on the Storm Water Management Fee, refer to Utilities Rule and
Regulation 25.
{End}
1.a
Packet Pg. 8
At
t
a
c
h
m
e
n
t
:
A
t
t
a
c
h
m
e
n
t
A
:
D
R
A
F
T
R
e
s
o
l
u
t
i
o
n
A
m
e
n
d
i
n
g
U
t
i
l
i
t
y
R
a
t
e
S
c
h
e
d
u
l
e
D
-
1
(
S
t
o
r
m
a
n
d
S
u
r
f
a
c
e
W
a
t
e
r
D
r
a
i
n
a
g
e
)
-
t
r
a
c
k
c
h
a
n
g
e
s
(
1
4
1
0
7
: