Flood insurance is about to get a little cheaper for thousands of Palo Alto property owners.

The city has just received an upgraded rating from the Federal Emergency Management Administration -- a change that recognized the city's recent flood-management efforts and that raises the discount that the city has been receiving to 20 percent.

Before the change, the city was receiving a 15 percent discount on premiums from the National Flood Insurance Program.

City Manager James Keene, who announced the change, said he and Mayor Greg Scharff were informed last week that Palo Alto is the first city in Santa Clara County to receive the 20 percent discount, which will affect the city's 3,319 policy holders. Collectively, the city's property owners paid $3.95 million over the past year for flood insurance. The 20 percent discount will save residents a total about $875,000 off the full price in the coming year, he said.

“Lots of folks will see some reductions,” Keene said.

Keene said the new rating will be applied to all policies issued or renewed on or before May 1, 2017.

The city achieved this discount through its participation in a voluntary program known as the Community Rating System, which allows jurisdictions that exceed the requirements of the insurance program to seek discounts. In Santa Clara County, Palo Alto was one of several cities to participate in what's known as “Program for Public Information,” a campaign to raise awareness among businesses and residents about flood hazards. Jurisdictions are required to submit annual reports to FEMA reporting their annual progress.

The recent efforts resulted in FEMA changing the city's rating from 7 to 6 (the lower the rating, the higher the discount). Before, the city's participation in the Community Rating System had saved policy holders about $670,000, according to a December report from the Public Works Department.

The report noted that “it would be challenging for the City to earn additional CRS credits without undertaking significant new efforts requiring additional funding or major floodplain management policy changes.”

On Monday, Keene lauded the work of several city departments -- including Office of Emergency Services, the Community Services Department and the Development Services Department -- as well as the efforts of the San Francisquito Joint Powers Authority, a regional agency that includes elected officials from Palo Alto, East Palo Alto, Menlo Park, the two water districts in San Mateo and Santa Clara counties.