PREPARED BY: MATT RODRIGUEZ DATE OF MEETING: 03/02/2026
SUBJECT:
TITLE
CONSIDER RESOLUTION (1) APPROVING A FIRST AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH KOSMONT FINANCIAL SERVICES FOR IMPLEMENTATION OF PHASE II CONTRACT SERVICES FOR ENHANCED INFRASTRUCTURE FINANCING DISTRICT (EIFD) FORMATION AND DEVELOPMENT; AND (2) REVISE ONE-TIME FUNDING APPROPRIATION TO $79,500 FROM FY 2025-26 GFDR FUND 110 OPERATING RESERVE TO FUND #100-1310-43600 OPERATING BUDGET - PROFESSIONAL SERVICES (PREVIOUSLY ADOPTED ON JANUARY 26, 2026 VIA RESOLUTION 2026-009)
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
FY 2025-27 Council Priority Workplan Compliance Statement
Under Major Policy Goal: Focus on Economic Development and Fiscal Diversification, Policy No. #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 contained in the FY 2025-27 City Council Priority Workplan, effective April 7, 2025.
CEQA Compliance Statement
This proposed action is not a project as defined by CEQA.
BACKGROUND
On January 26, 2026, the City Council reviewed the feasibility of creating an Enhanced Infrastructure Financing District (EIFD) from Kosmont Financial Services (Kosmont) to potentially develop a new economic development financing mechanism using tax increment for funding future capital infrastructure and leveraging private economic and housing investments for the City.
Specifically, the formal policy implementation of a future EIFD will enable the City of San Pablo to leverage tax increment funds for the purpose of construction of capital improvements in the following project categories including, but not limited to, the following:
a) Affordable Housing
b) A.I. supportive technology / Expanded fiber investment
c) City Facilities
d) Lighting and Landscaping (Supplant GF Subsidy to LLAD)
e) Street, Road and Bridge Improvements
Kosmont Financial Services - Feasibility Analysis and Policy Implementation
In October 2025, the City Manager solicited the financial services of Kosmont Financial (Kosmont), a reputable financial services consultant firm, who has extensive experience in the formal establishment of EIFDs for local cities and counties throughout California. Under the City Manager’s budget authority, the City Manager retained Kosmont to conduct a Phase I - Feasibility Analysis on EIFD development and formation for the City of San Pablo using one-time funds from the FY 2025-26 CM Operating Contingency Reserve (Fund 190). A copy of the original agreement executed by the City Manager with Kosmont is attached for review (See Attachment).
As of December 2025, Phase I - Feasibility Analysis has been completed and initial findings were presented to the Economic Development, Housing and Project Management (EDHPM) Standing Committee on December 10, 2025, and the City Council on January 26, 2026, respectively.
City Council Action on January 26, 2026
Following the formal presentation from Kosmont to the City Council on January 26, 2026, the City Council authorized the following:
(1) Added Policy Amendment No. #417, under Major Policy Goal: Focus on Economic Development and Fiscal Diversification, to: 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 to be formally added to the FY 2025-27 Council Priority Workplan;
(2) Authorized the City Manager to proceed with Phase II - Implementation and formation and ongoing development of the EIFD for the San Pablo community and adopted Resolution No. #2026-009 (See Attachment);
(3) Authorized a total appropriation of $79,000 to fund Phase II - Implementation Services for the EIFD development under the same adopted Resolution using FY 2025-26 GFDR Fund 110 funds allocated to the City Manager Departmental Budget under professional services fund #100-1310-43600 (See Attachment); and
(4) Recommend future City Council consideration of a non-binding Resolution of Intention and/or explore discussion with Contra Costa County regarding potential partnership.
Phase II - Implementation Contract Services - First Amendment
Following initial City Council action on January 26, 2026, the City Manager recommends the City Council authorize a first amendment to the Kosmont Financial Services Agreement (Kosmont). Originally signed in October 2025 for Phase I - Feasibility Analysis, this proposed amendment no. 1 will enable City staff to contractually proceed with Phase II - Implementation Services.
Revised GFDR Fund 110 Fund Appropriation - Corrected Error
On January 26, 2026, the City Council initially allocated $79,000 for Phase II contract services via Resolution 2026-009. The total appropriation previously approved needs to be corrected to $79,500 due to a typo error. Additionally, the proposed Amended Agreement with Kosmont requires formal authorization by the City Council as it exceeds the City Manager’s Budget Authority for professional services contract authorization per the City’s Purchasing Regulations, and San Pablo Municipal Code requirements.
FISCAL IMPACT
As previously advised on January 26, 2026, there are no budgeted funds for this expense contained in the Adopted FY 2024-25 & FY 2025-26 Two-Year (Biennial) GF Operating Budget thru June 30, 2026. Therefore, the City Manager is requesting the City Council correct a typo error and increase a revised total appropriation of $79,500 in one-time funds from FY 2025-26 GFDR Fund 110 and allocate to Fund #100-1310-43600 Professional Services to proceed with Phase II - Policy Implementation under First Amendment to the Kosmont Financial Services Agreement.
ATTACHMENTS
Att A - Resolution
Att B - First Amendment to Agreement between Kosmont Financial and City of San Pablo for Phase II - Implementation Contract Services
Att C - Agreement between Kosmont Financial and City of San Pablo for Phase I - Contract Services for Feasibility Analysis (October 2025)
Att D - City Council Adopted Resolution #2026-009