Council approves fee schedule despite objections over $129 monthly BMR monitoring charge

On May 19, 2026 the East Palo Alto City Council approved its annual comprehensive fee schedule update, including a $129 monthly monitoring charge applied to permanently below-market-rate (BMR) homeownership units, drawing sharp objections from several councilmembers and a resident during the public hearing.

The finance director, Tomo, told the council the update does not add new types of fees but applies inflationary adjustments: a 2.5% CPI increase for user and regulatory fees and a 2.7% construction-cost indexing for impact fees. The BMR monitoring fee, listed in the schedule and administered under a third‑party contract, was a focus of questioning during the hearing.

A councilmember who objected to the fee said the charge ‘‘feels excessive’’ for lower‑income homeowners. ‘‘If I was living in a BMR unit and all of a sudden I was hit with… $1,500 a year, I’m going to be hot pissed at the city for imposing a fee,’’ the councilmember said. That speaker and other councilmembers urged staff to reconsider the frequency and method of billing, suggesting annual or semiannual monitoring might be more appropriate.

City staff and the city manager responded that monitoring and enforcement require significant program resources. The city manager said the monitoring covers more than basic income checks: staff investigate deed‑restriction violations, trust transfers, short‑term rental uses, and other circumstances that software alone may not detect. Staff noted that the administration contracts with an outside vendor to run the BMR monitoring program; a staff report referenced a three‑year contract with EPA Can Do and a partner for a total contract amount of $313,636 to administer the portfolio.

Tomo and other staff clarified that the fee is currently assessed to homeowners who purchase BMR units (not to the original developer). Staff said the fee covers the city’s cost to contract out monitoring services and enforcement work. The city attorney’s office and other staff indicated the current vendor agreement runs through October of this calendar year, and the council could re‑examine program design and procurement options when that contract is renewed or replaced.

Councilmember Romero moved to adopt the fee adjustments as presented, a motion that was seconded and carried by voice vote. On the record the council heard several requests to revisit the monthly cadence, to seek cost reductions or alternative contract structures, and to evaluate options before the current contract’s expiration.

Public comment echoed the council’s concerns about household burden. Resident Gail Dixon told the council she worries about ‘‘junk fees’’ that are passed on to low‑income people and urged additional scrutiny of how fees are imposed and whether title companies or other mechanisms could be used to protect homeowners.

Next steps: staff said they would carry the approved fee schedule forward for formal adoption as part of the city’s budget process and recommended bringing additional information on contract terms and possible procurement options before the council prior to the contract expiration in October.

Votes and actions recorded in the hearing: the council moved and approved the comprehensive fee schedule update (agenda item 13.1) by voice vote (aye votes recorded on the transcript).