City of Cotati
City Council
Growth Financing Policy
File No. PA#26-35
October 13, 2026
Project Description
Proposed policy framework to ensure new development does not create a fiscal burden on existing residents and businesses.
1. A General Plan Amendment establishing City policy that growth should pay its fair share of municipal service costs;
2. An amendment to the Municipal Code implementing the
General Plan policy through objective development standards applied to future residential development.
2 Background
• Fiscal challenges serving new development since Prop 13 • Many cities look for additional revenue through non-property tax sources - Community Facilities Districts (CFDs)
• Cotati established CFD in 2017 -Condition projects to annex into CFD as part of entitlement
• New housing laws = nondiscretionary housing approvals -Creates a need for updated funding policies
Community Facilities District Process
4 Land Use Fiscal Year 2017-2018 Maximum
Special Tax
Single Family
Residential
$644.86/Dwelling Unit
Multi-Family
Residential
$429.91 per Dwelling Unit
• 2015 Taussig & Associates Study-Identified Deficit
• 2017 Resolution-Set Tax & Boundary-City Wide
• Funds a variety of City services-police, parks flood and stormwater, city staff
• Implemented through discretionary approvals and building permits
Proposed General Plan Amendment
General Plan is city’s long-term policy framework- all actions must be consistent. Instituting growth funding philosophy in the General Plan provides a policy foundation
Proposed Policy CSF-1.7: Growth Participation in Municipal Service Funding
New development shall contribute its fair and proportional share toward the ongoing municipal service costs generated by that development…
The City shall determine the amount of the deficit from time to time based on individual development types (multi-family, single family, commercial)… The determination shall be based on factors including development revenues, service demand, development intensity, anticipated fiscal impacts, geographic service areas… The City shall provide at least one funding mechanism that development can use to satisfy the obligation.
5 Proposed CMC Amendment
• Implementing action proposed for CMC: Section 17.30.110 -Objective Development Standard
• Applicable when service deficit is identified
• Identifies CFD as an existing tool to address funding deficits • Proposes a tiered approach for covering costs of annexation based on project size
-4 units or less-City pays
-5 units or greater-developer pays
6 Proposed 17.30.110
Satisfaction of General Plan Growth Financing Policy
7 A. General Plan Policy CF-1.7 requires development to contribute toward any fiscal deficit created by the development, requires the City to determine the deficit from time to time, and requires the City to make available a funding mechanism that allows a development to satisfy the obligation. This section implements the policy and establishes an objective standard that requires compliance with General Plan Policy CF-1.7.
B. The City Council shall determine the deficit from time to time based on the factors set forth in Policy CSF-1.7. The City Council may determine that residential additions, accessory dwelling units, and junior accessory dwelling units, due to their accessory nature, do not have a deficit. All development projects shall, in accordance with General Plan Policy CSF-1.7, contribute funding to eliminate the deficit. The proposed mechanism used to satisfy the foregoing requirement shall be confirmed by the Director prior to the issuance of the first building permit in the development project, and the Director shall confirm that an enforceable mechanism to satisfy the requirement is in place prior to the granting of any occupancy.
C. The City maintains one or more Community Facilities Districts into which development projects can annex into as a means of satisfying the obligation. Development projects of 5 or more units shall pay the costs of annexation.
General Plan Consistency
8 Objective CSF 1A New Development does not Exceed the City’s Ability to Provide Necessary Public Services and does not Overburden Existing Public Services
Policy CSF 1.1 Require all development projects to demonstrate that the City’s public services and utilities can accommodate the increased demand for services associated with the project.
Policy CSF 1.2 Require new development to offset or mitigate impacts to public services to ensure that service levels for existing users are not degraded or impaired.
Policy CSF 2.33 Ensure that the Police Department has adequate staff and equipment to accommodate existing and planned population growth in Cotati.
Required Findings
Amendments to the General Plan and municipal code: CMC Section 17.62.070 9 a. Is consistent with the goals and policies of all elements of the General Plan, and any applicable specific plan.
b. The proposed amendments would not be detrimental to the public interest, health, safety, convenience, or welfare of the city.
c. The proposed project has been reviewed in compliance with the CEQA d. The proposed amendment is internally consistent with other applicable provisions of this Zoning Code.
e. Additional finding for zoning code amendments: The proposed amendment is internally consistent with other applicable provisions of this Zoning Code; Recommendation
10 It is recommended by the Community Development Department and Planning Commission that the City Council:
1. Adopt Resolution No. X amending the Cotati General Plan to establish policies requiring new development to mitigate its fiscal impacts; and
2. Introduce an Ordinance to modify the Cotati Municipal Code (CMC) to include objective development standards to implement the general plan policies to ensure that new development contributes toward the municipal service costs it creates and does not impose an ongoing fiscal burden on existing residents and businesses.
Thank you!
Noah Housh
Community Development Director
[email protected]
707-665-3635