Cotati Eyes Multi-Million-Dollar Growth Fund For Future Projects At City Council Meeting Tonight

ROHNERT PARK-COTATI, CA — Cotati leaders will vote tonight on a whether to pursue a financing tool that city staff reports say could capture future property tax growth and generate tens of millions of dollars for major public projects.

The financing tool — called an enhanced infrastructure financing district, or EIFD — is used to channel property tax revenue into long-term infrastructure projects, including roads, water systems, sewer upgrades, parks, parking improvements, and affordable housing.

The City Council is expected decide whether to declare their intention to establish an EIFD and create a governing public financing authority to oversee the effort.

Enhanced infrastructure financing districts

Cotati staff reports describe an EIFD as a state-authorized financing tool that allows cities and counties to capture a portion of future increases in property tax revenue generated by new development and rising property values within a designated area.

It does not raise property taxes or create new taxes. Instead, participating agencies agree to redirect part of the new tax revenue growth — known as tax increment financing — into a dedicated fund that can finance public infrastructure and other community-benefit projects.

City officials say the proposed district would help fund critical improvements in the Gravenstein Corridor and Downtown/Cotati Depot Priority Development Areas, where hundreds of new housing units and commercial projects are expected over the next decade.

Potential projects include a downtown sewer trunk line, Well No. 4, additional water storage tanks, Highway 116 and Old Redwood Highway improvements, La Plaza Park upgrades, downtown parking improvements, and Alder Avenue roadway work in the unincorporated area if Sonoma County joins the district.

The proposal follows a feasibility study conducted by Kosmont Companies, which concluded that an EIFD could provide substantial infrastructure funding while maintaining positive fiscal impacts for both Cotati and Sonoma County.

The study assumes the district would eventually include approximately 675 housing units and nearly 22,000 square feet of commercial space, according to staff reports.

Under the preferred funding scenario, Cotati would dedicate 50% of future property tax increment revenue generated within the district, while Sonoma County would contribute 33% of its tax increment.

Staff said consultants estimated that the approach could generate roughly $64.3 million over 50 years, with a present-day value of about $25.4 million available for infrastructure investments.

It is unclear whether those figures have not been otherwise verified by Patch.

The proposed district would cover about 162 acres within city limits — roughly 13.5% of Cotati — with another 45 acres of unincorporated county land potentially included if Sonoma County agrees to participate.

Moving forward with Sonoma County

The proposed resolution is essentially a signal to Sonoma County that Cotati is willing to create the district, and that the county needs to decide whether it wants to put some of its future tax growth into the same pot.

Sonoma County plays a pivotal role in Cotati's proposed Enhanced Infrastructure Financing District because the county receives a larger share of property tax revenue within the proposed district than the city itself.

Under the plan being studied, Cotati would contribute 50% of its future property tax growth to the EIFD, while Sonoma County would contribute 33% of its future property tax growth.

Those combined revenues would create a significantly larger funding source for infrastructure projects than Cotati could generate alone.

Because Sonoma County has not yet agreed to participate, Cotati's resolution is largely intended to signal its commitment and encourage the county to join the district.

The county will ultimately decide whether the proposal meets its financial and policy goals before committing any future tax increment revenue.

Cotati would not be breaking new ground in this respect. Sonoma County already participates in an Enhanced Infrastructure Financing District with Santa Rosa, which uses future property tax growth to help fund infrastructure and development-related projects.

Cotati officials are seeking a similar partnership, arguing that a county-city EIFD could generate substantially more funding for roads, utilities, housing, and downtown improvements than the city could produce on its own.

If approved, the City Council would establish a Public Financing Authority composed of two council members, one Sonoma County supervisor, and two public representatives.

The authority would prepare an Infrastructure Financing Plan and oversee a series of public hearings before any district is formally created.

The current schedule calls for public hearings later this year, with potential EIFD formation by the end of 2026.

Property owners and residents within the district boundaries would have opportunities to comment throughout the process, and a majority protest could halt formation of the district.

Consultants estimate the district could help accelerate more than 670 housing units, support nearly 2,100 temporary construction jobs, create about 90 permanent jobs, and unlock additional state and federal grant opportunities tied to housing, transportation, climate resilience, and infrastructure projects.

6 p.m. Tuesday
Cotati City Council
City Hall 201 W. Sierra Ave. and online