For decades, Palo Alto's storm drains have functioned like hidden highways, ferrying water away from local streets and into the Bay.

Built for the most part half a century ago, it shows its age. According to a report from Public Works, it was built "in a poorly coordinated manner as part of multiple individual residential subdivision developments during the high growth years between the mid-1940s and late 1960s."

Many of its elements, according to staff, fail to meet the modern design standards of being able to convey a storm runoff from a 10-year storm without flooding the streets.

Now, as Palo Alto moves ahead with a major effort to upgrade the system, city officials aren't just looking to install new pumps and dig new drains. They are also looking to transform the city's traditional way of looking at storm water.

Traditionally viewed as a hazard and a nuisance, it will now be seen as valuable commodity that integrate into -- and enhance -- local ecosystems. Once dumped, rain water will now be harvested.

"It's the whole new way of looking at storm water as more of an asset rather than something to get rid of," said Joe Teresi, senior engineer at Public Works. "The basic concept in green storm-water infrastructure management is to infiltrate water and treat it as once was done when the environment was in natural state."

Lauded by city staff as a "paradigm shift," the new approach was heartily endorsed by the City Council on Monday night, when council members agreed to pursue a ballot-by-mail election next year to raise fees for storm-drain improvements.

In moving ahead with the January 2017 election, the council enthusiastically backed a list of recommendations from the city's Storm Drain Blue Ribbon Committee, a 10-member group that has been meeting earlier this year to discuss improvements to the existing system. Over the course of their discussions, committee members agreed that the system needs more than just an investment; it also needs a new funding structure and a more holistic approach toward storm water.

Among the committee's recommendations was changing the name of the fund (and the fees) that pays for storm-drain improvements. "Storm Drain Fees" will now be known as "Storm Management Fees" to reflect the change. As Claire Elliott, co-chair of the Blue Ribbon Committee, explained to the council on Monday: "'Storm drainage' implies that it's something we're going to dispose of and get rid off; 'storm management' takes into consideration that it might be a resource as well."

The committee also recommended that the $13.65 fee be split into two fees: a maintenance fee of $6.62 per month per property (or "equivalent residential unit"), which would remain constant and permanent. The remaining fee of $7.03 per month would expire after 15 years. It would be used to fund capital improvement projects, incentive programs and green storm-water infrastructure.

Under the proposal approved this week, the council will also have the ability to increase the fee by 6 percent per year or to correspond with the change in the Consumer Price Index (whichever amount is less). If property owners approve the fees, they would take effect on June 1, 2017, when the current fees (which voters approved in 2005) expire.

Elliott and her committee colleagues (Norm Beamer, David Bower, Nancy Clark, Peter Drekmeier, Susan Rosenberg, Bob Wenzlau, Stepheny McGraw, Hal Mickelson and Richard Whaley) also recommended a list of 16 projects that would be funded by the roughly $27.2 million that would be raised for capital improvements.

The most expensive items on the list are capacity improvements along Louis Road (from Embarcadero to the Seale-Wooster Canal) in Midtown and to Hamilton Avenue (between Center and Rhodes drives) in the Duveneck/St. Francis neighborhood. Other items include storm-drain upgrades along West Bayshore Road (in Palo Verde), at East Meadow Circle and along East Charleston Road.

The new projects will build on the storm-water improvements that the city had been implementing over the past decade, particularly after property owners approved in 2005 a storm-drain fee to fund seven infrastructure projects. These included a pump station near the San Francisquito Creek and storm-drain improvements along Alma Street and Clara Drive.

If the new fees are not approved, residents' storm-water bills would drop to the pre-election level of $4.25 per month. According to Public Works, this rate "will not support current operational costs for storm-drain system maintenance and state-mandated storm-water quality protection programs, and will provide no funding for continuation of a storm-drain capital improvement program."

In approving the election, council members pointed out that the increase in bills would be nominal. Currently, property owners pay about $13.03 (a combination of the voter-approved $10 fee and inflationary increases).

Vice Mayor Greg Scharff praised the plan to split off the fees into maintenance and capital categories and called the committee's recommendations "thoughtful."

"This way we have a sustainable and clear process to fund things going into the future," he said.

Council members also lauded the philosophical shift on storm water. Mayor Pat Burt, who represents the city on the San Francisquito Creek Joint Powers Authority, noted that when a major storm happens, the runoff from the city's storm-drain system converges with water from local creeks near U.S. Highway 101. At a certain point, the level of water goes beyond what the gated system can accommodate, prompting water to back up onto streets.

"There is no solution other than having less storm water," Burt said.

Burt lauded the shift from the old "hardscape" system in which storm water is piped away and discharged to the Bay to a new one in which the water is returned to the natural environment. He called this "a big transformation."

"It's not just our storm water, it's about how it helps us complement our creek flood-control program and how it basically adds to a sustainable approach," he said.

The shift toward harvesting, rather than dumping, rain water has already started to take place. The most recent example is in the Southgate neighborhood, where the city has installed bioretention planters, which collect runoff from nearby paved areas and permeable crosswalks. The project, which was funded by the 2005 ballot measure, cost $2 million and was completed in 2014.

Other projects that fit under the umbrella of "green storm-water infrastructure" include rain gardens, tree wells and green roofs. The report from the Blue Ribbon Committee states that such infrastructure projects offer amenities "with many benefits beyond water-quality improvement and groundwater replenishment, including creation of attractive tree-lined streetscapes, wildlife habitat, reduction of heat island effect, bicycle and pedestrian accessibility and enhanced public health."

"There's a lot of ways that green infrastructure can be incorporated and we hope every time the city does an improvement project of some sort that they look for opportunities to incorporate it so it's part of the thought process for everything we're doing whenever possible," Elliott told the council.