Prepared by:
Kosmont Companies
Enhanced Infrastructure Financing District (EIFD)
Analysis Summary
Presentation to City Council for
Consideration of Resolution of Intention
June 23, 2026
Background
2 • The City of Cotati is evaluating the use of one or more special purpose financing district(s) to capture value from potential new development to fund critical infrastructure and community investment priorities (e.g., water, sewer, roadway capacity, flood control)
• Among financing district alternatives, the Enhanced Infrastructure Financing Districts (EIFD) tool appears to have most relevance
• Financing capacity is estimated to range of up to ~$25M in present-value terms • While a City-only financing district strategy would likely achieve favorable “return on investment” for the City, a broader partnership including the County of Sonoma would further improve financial feasibility • In addition to the financing district funding capacity, the district would elevate the City’s ability to attract other public funding, particularly state and federal grants • Subject to feedback from City Council, immediate next steps could include discussions with the County to confirm potential partnership and City Council consideration of a non-bonding Resolution of Intention 3 0 5 10 15 20 25 30 35 40 45 50 55
$0M
$100M
$200M
$300M
$400M
$500M
$600M
Years from District Formation
Note: Illustrative.
What is Tax Increment Financing (TIF) – Not a New Tax
Baseline Property Value at District Formation
All Property Tax Stays with General Fund
New Property Value from
New Development / Rehabilitation
Some Portion of Property Tax Available to TIF District, Remainder Stays with General Fund
Assessed
Property Value
within District
New Total
Value After
TIF District
All Property
Tax Goes to
General Fund
EIFD Fundamentals
Communicating in a Digital World
4 45 years from first bond issuance
Public Financing Authority (PFA) implements Infrastructure Financing Plan (IFP)
Long Term
Districts
Mandatory public hearings for formation with protest opportunity; no public vote
Governance
Eligible facilities with useful life of 15+ years & of communitywide significance; purchase, construction, expansion, improvement, seismic retrofit, rehabilitation, and maintenance
Approvals
Eligible
Projects
Eligible Projects
Partial List
5 Roadway / Parking / Transit
Brownfield Remediation
Storm / Flood / Public Facilities Parks / Open Space / Recreation Libraries & Childcare Facilities Affordable Housing
Broadband Small Business /
Nonprofit Facilities
Wildfire Prevention / Other
Climate Change Response
Why are Public Agencies Authorizing Financing Districts? Communicating in a Digital World
6 1. Return on Investment: Private sector investment induced by district commitment accelerates growth of net fiscal revenues, job creation, housing production, essential infrastructure improvements
2. Ability to attract additional funds / other public money (“OPM”) – tax increment from other entities (county, special districts), federal / state grants / loans (e.g., for transit-oriented development, water, housing, parks, remediation)
TIF Districts in Progress
Statewide
Fully Formed In Formation Process Under Evaluation
Jurisdiction Purpose
Artesia + L.A. County Transportation and affordable housing Barstow Industrial and housing supportive infrastructure Brentwood Housing, employment, and transit-supportive infrastructure Buena Park Mall reimagination, tourism-supportive infrastructure Calipatria (CRD) Economic and climate resilience infrastructure Carson + L.A. County Remediation, affordable housing, recreation Covina Downtown housing and blended use supportive infrastructure Downey + L.A. County Transit-oriented development, affordable housing Fresno Downtown, housing and transit-supportive infrastructure Humboldt County Coastal mixed-use and energy supportive infrastructure Inglewood + L.A. County (CRD) Transportation and affordable housing Imperial County Renewable energy, housing and infrastructure La Verne + L.A. County Housing and transit-supportive infrastructure Lakewood + L.A. County Mall reimagination, smart streets, affordable housing Long Beach Economic empowerment and affordable housing
Los Angeles (Palisades, Downtown, other) Affordable housing and transit-supportive infrastructure Los Angeles County Santa Monica Mountains Wildfire Recovery and Rebuild Los Angeles County West Carson Housing / bio-science / tech infrastructure Madera County (3 Districts) Water, sewer, roads and other housing infrastructure Modesto + Stanislaus County Downtown, housing, and recreation infrastructure Mount Shasta Rural brownfield mixed-use infrastructure
Napa Downtown, housing, tourism supportive infrastructure Norwalk + L.A. County Affordable housing and infrastructure Ontario Airport-related, blended use, infrastructure
Palmdale + L.A. County Housing, blended use, transit infrastructure Pittsburg Housing, commercial, and tech park infrastructure Placentia + Orange County Housing and TOD infrastructure Rancho Cucamonga Blended use and connectivity infrastructure Redlands Education related blended use, mall reimagination Redondo Beach + L.A. County Parks / open space, recreation infrastructure Riverside County Thousand Palms Housing, hospitality, medical supportive infrastructure Sacramento County (Unincorporated) Industrial / commercial supportive infrastructure Salinas Water, sewer, and other housing supportive infrastructure Sanger Commercial, hospitality, supportive infrastructure Santa Cruz Downtown, blended use, and climate resilience infrastructure Santa Fe Springs + L.A. County Housing and transit-oriented development infrastructure Santa Rosa + County of Sonoma Downtown investment, affordable housing, aging infrastructure Scotts Valley + Scotts Valley Fire + County of Santa Cruz Housing and mixed-use supportive infrastructure, fire facilities Sebastopol + County of Sonoma Housing, flood control, library, civic facilities Sonoma County West (Unincorporated) Housing, flood control, sewer, fire facilities Yucaipa Housing and commercial infrastructure
8 Source: Sonoma County Auditor-Controller (2026)
Potential Financing District Boundary
Cotati
• Gravenstein Corridor and Downtown
/ Cotati Depot Priority Development
Areas (PDAs)
• Approx. 162 acres (~13.5% of City)
• $219M in existing assessed value
(~14.1% of Citywide value)
• ~0.2% of Countywide value
• For potential County uninc. area:
- Commercial / industrial area in
need of Alder Ave improvements
- Approx. 45 acres
- Approx. $6M in existing value
9 a) Water and sewer (e.g., Downtown sewer trunk main, Well #4, additional water storage tanks)
b) Roadway improvements (e.g., Highway 116, Old Redwood Highway, East Cotati Avenue)
c) La Plaza Park and adjacent roadway
d) Downtown parking improvements
e) Alder Avenue roadway improvements in unincorporated area Example Potential Investments
to Receive TIF District Funding – Cotati
10 Development Pipeline – Major Projects
Sources: Cotati Development Pipeline Tracker (2026)
a) Cotati Station
b) Cotati Village 1
c) Cotati Village 2
d) Pink Viking (Flahavan Estates)
e) Redwood Row
f) La Plaza Village - 8150 La Plaza
g) 120 E. Cotati Ave
h) Lund Hill Lots
11 Development Assumptions with Study Area – Cotati
Absorption Assumed over ~10-15 Years
Note: AV at buildout values in current 2026 dollars
Sources: Cotati Development Pipeline Tracker (2026), Santero Specific Plan (2025), Transit Oriented Community (TOC) Zoning (2025), CoStar (2026) Area # SF or Units Estimated
AV Factor
Estimated
Total AV at Buildout
Residential – For-Sale 47 units $695K per unit $33 million Residential – Rental 505 units $425K per unit $215 million Residential – Affordable 123 units property tax exempt $0 Commercial / Retail 21,774 SF $395 PSF $9 million
Total New Development Assumed within Study Area $256 million City
10.4%
County
Other / School Entities 19.7%
(not eligible)
69.9%
12 • Primary non-school recipients and potential contributors of property tax are the City and County
• City share varies by area and averages ~10.4% of every $1 collected in property taxes within the study area
– City additionally receives equivalent of ~6.0% of property tax in lieu of motor vehicle license fees (MVLF), also
available to TIF district
• County General Fund share averages ~19.7%
– County additionally receives property tax in lieu of MVLF, also available to district, but not incorporated into this analysis to be conservative
• School-related entities cannot participate
As counties tend to rely more heavily on property tax revenue sources generated by new development within incorporated jurisdictions, it is Kosmont’s experience that it is not reasonable to assume allocation of property tax in lieu of MVLF by the County. As cities benefit from additional non-property tax revenue sources (e.g., sales tax, transient occupancy tax) from new development, it is Kosmont’s experience that it is reasonable for cities to consider contributing property tax in lieu of MVLF.
Tax Rate Area (TRA) weighted average distributions for Study Area shown. Post-ERAF (Education Revenue Augmentation Fund) distribution.
Parcels within former Redevelopment Agency Project Areas are subject to RPTTF revenue flow until expiration of ROPS obligations (2035 for Cotati).
Source: Sonoma County Auditor Controller (2026)
Property Tax Revenues Available to Financing District
Cotati
Property Tax Distribution
+ City MVLF of 6.0 = 16.4%
Sonoma County EIFD Participation Policy
13 Property Tax Increment:
• City share contributed County share contributed
• County contributes less than 100% of its share
Fiscal Analysis: Positive net impact to County General Fund Board Priorities: Supports affordable housing, climate adaptation and resilience, transitoriented development, active transportation, and/or advancing racial and social equity 14 City allocation includes allocation from both AB8 + MVLF in-lieu. County allocation does not include MVLF in-lieu. * Bonding capacity assumes Year 5 is first bond issuance for district. “Year 5 means fifth year of revenue following district formation. Net proceeds shown. Bondable revenue assumes $25,000 admin charge, 150% debt service coverage. 6.0% interest rate; 30-year term. Proceeds net of 2% underwriter's discount, estimated reserve fund (maximum annual debt service), costs of issuance estimated at $350,000.Source: Kosmont Financial Services (KFS), registered municipal advisor.
Revenue and Bonding Capacity Scenarios
Cotati
Revenue
Allocation Scenario
Year 5
Accumulated
Revenue +
Bonding
Capacity*
Year 10
Accumulated
Revenue +
Bonding
Capacity*
50-Year
Present-Value
@ 3%
Discount Rate
50-Year
Nominal
Total
A) City 25% + County $ Match
(21% of County share) $1,061,000 $4,050,000 $14,162,000 $35,834,000 B) City 25% + County 25%
(percentage match)
$1,238,000 $4,534,000 $15,618,000 $39,518,000
C) City 50% + County 33%
(supported by City and County General Fund fiscal
impact analysis)
$2,432,000 $7,799,000 $25,431,000 $64,348,000
15 Financing Districts work better with a Multi-Agency Partnership & Attract Other Funding
Other Public Sources
§ Cap-and-Trade / HCD grant & loan
programs (AHSC, IIG, TCC,CERF)
§ Prop 4 climate funding
§ Prop 68 parks & open space grants
§ Prop 1 water/sewer funds
§ Caltrans ATP / HSIP grants
§ Federal EDA / DOT / EPA funding
§ Federal ARPA, Invest Act, IIJ Act
Other Private Sources
§ Development Agreement / impact fees
§ Benefit assessments (e.g., contribution from
CFD)
§ Statewide Community Infrastructure Program
(SCIP) pooled financing
§ Private investment
• Ideal strategy includes City and County partnership
• District which involve a City / County joint effort are more likely to win state grant funding sources • Districts explicitly increase scoring for CA state housing grants (e.g., IIG, AHSC, TCC) Public Agency and Community Return on Investment
16 * Construction job-years, where one job-year is defined as one year of employment for one individual • Housing: 670+ units
• Economic revitalization, addressing critical infrastructure needs • Job creation, wages:
§ 2,098 temporary construction-related jobs* in City and County, ~$178M related new wage income § 90 permanent jobs in the City and County, related ~$5M in new annual wage income • Acceleration of development and related fiscal revenues for taxing entities:
§ $2.8 million in present-value fiscal benefit for City general fund over 50 years, net of tax increment contribution to TIF district and net of estimated fiscal expenditures (50% City TIF allocation scenario) § $384,000 in present-value fiscal benefit for County general fund over 50 years, net of tax increment contribution to TIF district and net of estimated fiscal expenditures (33% County TIF allocation scenario) § $13.5 million in new County sales tax funding for transportation, library, parks, mental health, homelessness, fire protection, emergency response, child care and other non-General Fund services over 50 years • Attract other funding not otherwise available for projects within the community 17 Estimated Fiscal Impacts by Agency
Within City of Cotati
Note: Assumes installation of necessary public infrastructure.
Source: Kosmont Companies (2026)
Annual
@ Year 10
Year 0-50
Nominal
Total
Year 0-50
Present Value
@ 3.0%
City of Cotati
Estimated Fiscal Revenues (Net of 50% EIFD Allocation) $1,810,250 $146,591,500 $58,428,200 Estimated Fiscal Expenditures $1,690,600 $139,854,100 $55,579,900 Estimated Net Fiscal Impact to City $119,650 $6,737,400 $2,848,300 County of Sonoma
Estimated Fiscal Revenues (Net of 33% EIFD Allocation) $709,700 $58,690,600 $23,324,700 Estimated Fiscal Expenditures $697,800 $57,726,100 $22,941,200 Estimated Net Fiscal Impact to County $11,900 $964,500 $383,500 Reference: Other County Sales Tax Revenues $411,400 $34,026,300 $13,522,500 18 Illustrative TIF District Formation Schedule
§ Tax increment allocation begins fiscal year following district formation § Debt issuance, if desired, would occur after a stabilized level of tax increment has been established (may be 3-5 years) Target Date Task
Dec 2025 – June 2026
a) Conduct outreach/discussion among City staff and Council, County staff and Board of Supervisors, other relevant stakeholders
b) Final determination of district boundaries, eligible projects, governing Public Financing Authority (PFA) Board June / July 2026 c) Participating taxing agencies adopt Resolution(s) of Intention (ROI) and formally establish PFA August 2026 d) PFA directs the drafting of the Infrastructure Financing Plan (IFP) September 2026 e) Distribute draft IFP to property owners, affected taxing entities, City Council, County Board of Supervisors October 2026 f) PFA holds an initial public meeting to present the draft IFP to the public and property owners Oct / Nov 2026 g) City Council/legislative bodies of other affected taxing entity contributing increment adopt resolution(s) approving IFP November 2026 h) PFA holds first public hearing to hear additional comments and take action to modify or reject IFP (at least 30 days after “f”)
December 2026 i) PFA holds second public hearing to consider oral and written protests and take action to terminate proceedings or adopt IFP and form the district by resolution (at least 30 days after “h”) 19 Potential Next Steps
• Address questions, receive feedback from City Council • City Council consideration of a non-binding Resolution of Intention • Consideration of Council appointments to the EIFD Public Financing Authority (two councilmembers, one alternate councilmember, member of the public to be appointed in the future) • Consideration by County Board of Supervisors of a Resolution of Intention to partner with City • Preparation of required Infrastructure Financing Plan (IFP), required public meetings, hearings, and noticing, with potential EIFD formation by end of 2026 / early 2027 20 THANK YOU
Questions?
Kosmont Companies
1601 N. Sepulveda Blvd. #382 Manhattan Beach, CA 90266
Ph: (424) 297-1070 | Fax: (424) 286-4632
www.kosmont.com
Disclaimer
21 The high-level analyses, projections, assumptions, rates of return, and any examples presented herein are for illustrative purposes and are not a guarantee of actual and/or future results. Project pro forma and tax analyses are projections only. Actual results may differ from those expressed in this analysis.
Discussions or descriptions of potential financial tools that may be available to the Client and public agencies are included for informational purposes only and are not intended to be to be “advice” within the context of this Analysis.
Municipal Advisory activities are conducted through Kosmont Companies’ affiliate, Kosmont Financial Services, which is Registered as a Municipal Advisor with the SEC and MSRB.