PREPARED BY: MATT RODRIGUEZ DATE OF MEETING: 04/20/26
SUBJECT:
TITLE
CONSIDER RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN PABLO (1) DECLARING ITS INTENTION TO ESTABLISH THE SAN PABLO ENHANCED INFRASTRUCTURE FINANCING DISTRICT TO FINANCE THE CONSTRUCTION, REPAIR, ACQUISITION, AND/OR MAINTENANCE OF CAPITAL IMPROVEMENTS AND FACILITIES, INCLUDING THE ACQUISITION AND/OR REMEDIATION OF LAND FOR SUCH IMPROVEMENTS AND FACILITIES; (2) ESTABLISHING A PUBLIC FINANCING AUTHORITY; AND (3) AUTHORIZING CERTAIN OTHER ACTIONS RELATED THERETO
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATIONS
Recommendation
Adopt Resolution
Body
COMPLIANCE STATEMENTS
FY 2025-27 Council Priority Workplan Compliance Statement
Under Major Policy Area: Focus on Economic Development and Fiscal Diversification, Policy # 417: Explore feasibility and implementation of an Enhanced Infrastructure Financing District (EIFD) as an economic development tool to capture value from potential new development across the City to fund critical infrastructure and community investment priorities is an adopted policy item contained in the FY 2025-27 Council Priority Workplan, effective April 7, 2025.
CEQA Compliance Statement
The City Council’s adoption of the Resolution of Intention and establishment of the PFA are exempt from the California Environmental Quality Act (CEQA) as they are actions solely related to the creation of a government funding mechanism and the administrative or organizational activities of the City. Therefore, these actions do not constitute a “project” pursuant to CEQA Guidelines Sections 15378(b)(4) and 15378(b)(5). Neither of these actions could result in a physical change in the environment because the City has not committed itself to any specific project(s) that could be funded by the EIFD. As a separate and independent ground, these actions are exempt from the requirements of CEQA pursuant to Section 15061(b)(3) of the CEQA Guidelines because it can be seen with certainty that there is no possibility that they will have a significant effect on the environment. However, future actions (such as the approval of infrastructure improvements using funding from the EIFD) will be subject to environmental review in accordance with CEQA.
Background
On December 13, 2023, the City Council authorized a total of eight (8) Strategic Budget Initiatives proposed by the City Manager which were adopted for implementation via Resolution 2023-067.
Two (2) specific Strategic Budget Initiatives (#3 and #8) listed below enable the City Manager to explore the ongoing feasibility and exploration of new GF revenue sources to address declining Casino revenues to the City and reduce the dependency of the City’s operating reserves annually to mitigate short-term and long term structural deficits, and to sustain City program and service delivery. These included the following:
#3). Identify New GF Revenue Sources; and
#8). Explore additional fiscal measures using forecast model to reverse forecasted structural deficits as recommended by the City Manager.
EIFD Feasibility Analysis and Policy Implementation
Kosmont Financial Services (KFS) was hired by the City to carry out a Phase I Feasibility Analysis for developing and forming an EIFD in San Pablo. The results from Phase I were shared with the Economic Development, Housing and Project Management (EDHPM) Standing Committee on December 10, 2025, and later presented to the City Council on January 26, 2026. Following the January 2026 presentation, the City Council authorized the City Manager and staff to begin Phase II of the Enhanced Infrastructure Financing District (EIFD) formation process pursuant to Resolutions 2026-009 adopted on January 26, 2026, and 2026-024 adopted on March 2, 2026.
EIFD Statement of Facts
As a result of the elimination of redevelopment agencies in California, the City lost a tax increment financing (TIF) tool to invest in public facilities supporting the development of communities. In 2014, SB 628 created a new tax increment financing tool called the Enhanced Infrastructure Financing District (EIFD). The original legislation has been amended to modify the EIFD formation procedural requirements and requirements to issue bonds to finance infrastructure.
EIFDs aid cities in funding public facilities and other public investments to foster future development and increase property values. By capturing tax increment revenue generated within the district as new development occurs and property values increase over time, similar to a redevelopment project area, a portion of tax increment revenue is redirected from participating taxing entities to the EIFD. Importantly, the establishment of EIFDs does not increase property taxes or any other taxes for landowners within or outside the EIFD boundaries.
The following chart illustrates how tax TIF captures that new revenue from new development into the EIFD (note these dollars are for illustrative purposes only):
The City has been evaluating the use of an EIFD to facilitate economic development across various significant development opportunity sites throughout the City via investment into critical infrastructure. To date, City staff and consultant KFS have prepared detailed analysis, indicating feasibility for implementation of an EIFD.
Adoption of the City Council’s Resolution of Intention (Attachment 1) provides for the following:
1. Preliminary Boundaries of the EIFD: The proposed EIFD boundaries are noted in color in Exhibit A of the Resolution of Intention. Though the exact boundaries of the EIFD are subject to further review and refinement as the formation process continues, the current boundary is proposed to be City-wide at this time.
2. The Public Facilities and Development Proposed to be financed by the EIFD: The activities listed under the Resolution of Intention include all eligible activities under the EIFD legislation and are listed in Exhibit B to the Resolution of Intention (more specific projects will be delineated in the required Infrastructure Financing Plan prior to district formation). Discussions so far have identified the following examples of potential projects to be funded:
• Affordable Housing
• Artificial intelligence (A.I.) supportive technology / expanded fiber investment
• City facilities
• Lighting and landscaping
• Road and bridge improvements
3. Use of Incremental Tax Revenue: The Resolution of Intention anticipates that a portion (not all) of the City’s future property tax increment revenue generated within the EIFD will be allocated to the EIFD. The exact amounts will be determined in future resolutions adopted by the City Council. It is anticipated that the County may additionally participate in the EIFD, in which case, a portion of the County’s property tax increment revenue will also be allocated to the EIFD.
4. Establishes a Public Financing Authority to serve as the Governing Board of the EIFD: The Public Finance Authority (PFA) membership is proposed to be comprised of three members of the City Council and two members of the public appointed by the City Council (to be appointed at a future date). An alternate PFA board member may also be appointed to represent the City Council in the absence of a regular member. Should another taxing entity, such as the County of Contra Costa, agree to participate as a taxing entity, then the PFA membership would be modified to be two members of the City Council, one member of the County Board of Supervisors, one member of the public appointed by the City Council, and one member of the public appointed by the Board of Supervisors. Members shall serve at the pleasure of their respective appointing legislative bodies and shall serve until their successor assumes office.
5. Sets a time and place for the first public hearing on the EIFD to be conducted by the Public Financing Authority: The first public hearing is tentatively scheduled for October 5, 2026 or as soon thereafter as the matter may be heard, in the City Hall Council Chambers, 1000 Gateway Avenue, San Pablo, CA 94806.
Approval of the Resolution of Intention and appointments to the PFA begin a series of activities that will take place over the next several months, primarily by the PFA Board. The following schedule outlines the various key tasks and milestones in the formation process. As the following proposed schedule indicates, the final City Council approvals are expected to follow later in calendar year 2026.
|
Task |
Target Date |
Notes |
|
Initial meeting of Public Financing Authority (PFA) |
June 2026 |
PFA will review the EIFD, potentially adopt bylaws, direct the preparation of the draft Infrastructure Financing Plan (IFP) |
|
PFA meets to review draft IFP |
August 2026 |
|
|
City Council considers resolution approving the IFP and allocation of property tax increment |
September 2026 |
|
|
County Board of Supervisors considers resolution approving the IFP and allocation of property tax increment |
September 2026 |
If the County is a participating agency. |
|
PFA holds Public Hearing #1 |
October 2026 |
Additional comments taken; PFA takes action to modify or reject IFP, or otherwise proceed to Public Hearing #2 |
|
PFA holds Public Hearing #2 and Protest Proceeding |
November 2026 |
If majority protest exists - PFA takes action to terminate EIFD. If no majority protest, PFA can propose adoption of the IFP and formation of the EIFD |
|
Staff files EIFD with State Board of Equalization (BOE) |
November 2026 |
|
The IFP referenced in the timeline above becomes the roadmap for the work to be accomplished by the EIFD. The IFP will analyze the tax increment anticipated to be generated by the properties in the EIFD boundary, consider the cost of various infrastructure options to be considered for investment, evaluate the bonding capacity created by the tax increment generated, estimated general fund fiscal impacts, and provide a plan for how the EIFD will capture tax increment to fund infrastructure investments. The IFP contents are currently under development and will be provided in draft format to the public, PFA, and City Council in accordance with the schedule above.
Public information is an important part of the EIFD formation process. A web page will be developed that will serve as a resource to interested stakeholders. Landowners and residents within the EIFD boundaries will also receive mailed notifications of public meetings and hearings throughout the formation process, and public hearings will additionally be advertised via local newspaper. In the event of a majority protest by property owners or residents within the boundaries, the formation proceedings would be discontinued.
City Manager Recommendation
The City Manager and staff recommend that the City Council adopt the attached Resolution:
1. Declaring its intention to establish the San Pablo Enhanced Infrastructure Financing District (EIFD) to finance the construction, repair, acquisition, and/or maintenance of capital improvements and facilities, including the acquisition and/or remediation of land for such improvements and facilities;
2. Establishing the “Public Financing Authority of the San Pablo Enhanced Infrastructure Financing District”; and
3. Authorizing and directing the City Manager, or the City Manager’s designee, to take all actions necessary or advisable to give effect to the transactions contemplated by the Resolution.
FISCAL IMPACT
There is no immediate fiscal impact for establishing the San Pablo EIFD or PFA. If ultimately established, the EIFD would create the opportunity to use tax increment financing to fund targeted infrastructure investments in the City. Further information regarding fiscal impact will be analyzed as part of the development of the IFP, which will be presented to the PFA and City Council as noted in the timeline above.
ATTACHMENTS:
Att A - Resolution of Intention