Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: ENHANCED INFRASTRUCTURE FINANCING DISTRICT
(EIFD) FEASIBILITY STUDY UPDATE
Date: April 28, 2026
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council receive a presentation on the current status of the joint enhanced infrastructure financing district (EIFD) and provide direction on next steps.
Background
On November 18, 2025, the City Council authorized entering into an agreement with Kosmont to evaluate the feasibility of an enhanced infrastructure financing district (EIFD) in a joint study with the City of Rohnert Park.
The basic concept behind an EIFD is that some portion of future property tax would be allocated to the newly formed district to fund projects that in turn catalyze improvements that improve the assessed value of private properties and deliver new services, employment and/or housing for the community. An EIFD is particularly beneficial if a City can partner with the County to jointly contribute property tax increment to a district. The County of Sonoma has an EIFD policy that would potentially allow up to the same percent share of tax increment as the City contributes.
From the perspective of staff, County participation is critical to make pursing an EIFD worth the loss of future unrestricted property tax increment.
The scope of work is broken into three phases, as follows:
• Phase 1: Initial Feasibility Analysis
• Phase 2: Fiscal Impact Analysis and Pursuit of Taxing Entity Partnership • Phase 3: Implementation
To be able to form an EIFD with 2026 as the base tax year, timing is important. Specifically, the goal for district formation, if the endeavor appeared to be beneficial, was December 1, 2026.
Given the time constraints, the City Council authorized proceeding into Phase 2, if an EIFD appeared to be favorable after Phase 1. At this time, Phase 1 is complete and given the favorable outcome of the initial fiscal analysis and meeting with officials from the County of Sonoma, staff is currently proceeding with Phase 2.
Analysis/Discussion
The attached slide deck includes the initial financial analysis and conceptual project list of eligible projects. Additionally, the respective Mayors of Cotati and Rohnert Park as well as staff from both cities meet with Supervisors Rabbitt and Coursey, including County staff working on EIFDs.
Summary of Initial Feedback From County of Sonoma
Currently, the Sonoma County and City of Santa Rosa EIFD is the only district in the county.
However, in addition to the potential Cotati & Rohnert Park EIFDs, there is a West County EIFD that is significantly advanced and other conversations about EIFDs in Cloverdale and City of Sonoma. Given this, there was a desire to generally understand the impact of EIFDs to the County more broadly as these district potentially proliferate. In addition, specific feedback for our proposed EIFD include:
• Projects should catalyze or accelerate development, such that there is a clear nexus to increasing property values. Projects such as beautification or trail projects were cited as inappropriate for EIFDs, as the connection to improved property values is tenuous in the view of the County.
• Although the County has an EIFD policy, to determine their % commitment to the EIFD, they will need to see the Fiscal Impact Report.
• They may need to get a third-party review of the Fiscal Impact Report, but that's uncertain at this time and would have schedule implications. • Our schedule to get this done by December 2026 was aggressive in the view of the County.
Following this meeting between the cities and the County of Sonoma, on April 14, 2026, the Board of Supervisors (Board) requested an update on all current County EIFD discussions and exploration interests. As currently scheduled, this information will be included in an update in early June when the Board considers approving the West Sonoma County EIFD Infrastructure Financing Plan. Therefore, County staff have requested that the cities provide a summary of our jurisdictions’ interests and any Board requests in advance of that meeting. Aside from providing a status update on our progress, the primary requests are expected to be participation by the County in any EIFD in accordance with their policy and on a timeline that captures 2025 as a base year.
Following the completion of Phase 2, staff will return to the City Council to present the findings and discuss next steps, if any. The financial analysis is expected to be complete by the end of May, so the City Council update is expected to occur in June.
Financial Considerations
There are no additional financial considerations, as the contract costs were budgeted and previously approved through Phase 2.
Environmental Issues
Where it can be determined with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA review.
This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed action is exempt from CEQA pursuant to Section 14.03.021 of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment.