How Palo Alto is run

Who runs Palo Alto, what it costs, and where your money goes

The city manager, council pay, the budget, your property tax bill and who provides each service, from Palo Alto's own public documents. Every number links to its source and says which year it describes. Checked Oct 9, 2026.

Who runs Palo Alto

A city manager hired by the council runs the city day to day. The council sets policy, adopts the budget and sets the tax rate.

City of Palo Alto · Oct 31, 2025

What they are paid

City manager Ed Shikada: base pay$435,5102025-07-01. Includes a 3% merit raise effective the first full pay period after July 1, 2025. City of Palo Alto · Dec 1, 2025
In the contract
  • One year of salary and benefits as severance if fired or asked to resign
  • Home-purchase help: the city could put up to $3 million toward a Palo Alto home and lend him up to $1 million (2019 amendment)
  • Free parking at the Civic Center
A council member$19,200 a year2025-01-01. $1,600 a month, effective Jan. 1, 2025. City of Palo Alto · Dec 17, 2024
The mayorNot confirmed2025-01-01. The salary schedule lists only the council member rate of $1,600 a month and no separate rate for the mayor. City of Palo Alto · Dec 17, 2024

Palo Alto city staff

1,089 full-time-equivalent positions, including Utilities 282, Police 139, Fire 120, Community services 83. FY2026-27. Authorized positions in the adopted budget, down 21.25 from FY2025-26. City of Palo Alto · Jul 1, 2026

The city posts salary schedules with pay ranges by job title and a council-adopted schedule for the city manager, city attorney and city clerk. We name pay only for elected officials and the city manager.

Is Palo Alto in the red?

Cities must pass a balanced budget, so "profit" and "deficit" mean something different here. The useful questions: does the city's everyday money (the general fund) cover its everyday costs, how much does it keep in savings compared with its own target, and how big are its pension and debt bills.

General fund, FY2026-27$312MOut of $1.04B across all city funds, which includes utilities and other money that can only be spent on one thing. City of Palo Alto · Jul 1, 2026
Savings shrank, FY2024-25 (audited)−$2.9MGeneral fund revenue $252M, spending $254M. Spent $1.4 million more than it took in. With $29.4 million in transfers in and $40.2 million in transfers out, the general fund balance fell by $2.9 million. City of Palo Alto · Oct 31, 2025

Savings

Unassigned general fund balance: $53.1M (2025-06-30). City of Palo Alto · Oct 31, 2025

Pension promises not yet funded$504M(2025-06-30). CalPERS · Aug 1, 2026
Debt owed$371MGovernmental $197.1 million, mostly certificates for the Public Safety Building ($97.1 million) and library bonds. Utilities $174.3 million, mostly state water loans ($153.8 million), including $111.2 million for the sewage treatment plant upgrade. 2025-06-30. City of Palo Alto · Oct 31, 2025
Credit ratingAAA (S&P and Moody's)2025-04. City of Palo Alto · Oct 31, 2025

Why we skip the "budgeted deficit": many cities plan to dip into savings, then spend less than planned. The audited result tells you what really happened.

Where the money comes from and goes

The general fund only: the city's everyday money for FY2026-27.

Comes from

  • Property taxes$76.1M · 24%
  • Charges for services$45.8M · 15%
  • Sales tax$33.4M · 11%
  • Transfers in from other funds (includes utility transfers)$32.9M · 11%
  • Hotel tax (transient occupancy)$32M · 10%
  • Utility users tax$23M · 7%
  • Rental income$16.1M · 5%
  • Charges to other city funds$14.7M · 5%
  • Other (business tax, real estate transfer tax, permits, interest, grants, misc.)$37.9M · 12%

City of Palo Alto · Jul 1, 2026

Goes to (FY2026-27)

  • Employee pay and benefits$191M · 61%
  • Transfer to capital projects (infrastructure)$35.5M · 11%
  • Contract services$32.4M · 10%
  • Charges from other city funds (allocated charges)$31.9M · 10%
  • General expense$9.5M · 3%
  • Other transfers out$5.7M · 2%
  • Other (supplies, rents and leases, equipment)$6.1M · 2%

City of Palo Alto · Jul 1, 2026

Your property tax bill: who gets it

Most of the bill is the 1% base levy that Prop. 13 allows, shared among the county, schools, the city and other agencies. The city's only voter-approved rate is for its library bonds. Rates are per $100 of assessed value; the ACFR rounds the total to 1.14.

1¢

of each property-tax dollar goes to the city of Palo Alto

  • 1% base levy: shared by the county, schools, the city and other agenciesShared under Prop. 131 · 88%
  • School district bonds0.0483 · 4%
  • Santa Clara County retirement levy0.0388 · 3%
  • Community college district bonds0.0286 · 3%
  • City of Palo Alto library bonds (Measure N)0.0076 · <1%
  • County hospital bonds (Measure A)0.0055 · <1%
  • County affordable housing bonds (2016 Measure A)0.0043 · <1%
  • Santa Clara Valley Water District0.0041 · <1%
  • Midpeninsula Regional Open Space District bonds0.0013 · <1%
  • Total (% of assessed value)1.1385

FY2024-25 rates for a home in Palo Alto (Santa Clara County). City of Palo Alto · Oct 31, 2025

See what a Palo Alto home costs each year, line by line →

Who provides your services

Not everything in Palo Alto is run by the city. Who provides a service decides whose budget pays for it and whose election decides it.

Compared with similar cities

The cities in this state closest in population that we cover. Read it for scale, not as a ranking: cities provide different services.

LodiCACamarilloCAPalo AltoCAEastvaleCA
Residents68,51368,76469,00470,575
Top administrator's base pay$285,000$349,196$435,510$315,675
Council member pay$19,200$19,447$19,200$19,200
General fund per resident$1,404$965$4,521$682
Debt per resident$1,591$233$5,382$818
Unfunded pension per resident$2,437$482$7,311$4
City staff per 1,000 residents7.02.515.81.2

Figures as shown in each city's section, divided by its population. Years differ by state, and pension figures are measured differently in each state (each city page says how). Camarillo and Eastvale pays another agency for police or fire, so its own staff count is lower.

What Palo Alto publishes

What a resident can find online today. A "no" is something you can ask the council to publish.

Questions to ask your council

  1. The city owed $371.4 million in bonds and loans on June 30, 2025, much of it state loans for the sewage treatment plant upgrade. How will repaying those loans affect sewer rates?

The fiscal year runs July 1 to June 30. The council reviews a 10-year financial forecast in winter (January 20, 2026), the city manager presents the proposed budget in early May (May 4, 2026), the Finance Committee holds budget hearings in May (May 5 to May 19), and the council adopts the budget in mid-June (June 15, 2026). See who is running for council

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