PREPARED BY: MATT RODRIGUEZ DATE OF MEETING: 01/26/2026
SUBJECT:
TITLE
CONSIDER ADOPTING A RESOLUTION TO PROCEED WITH AMENDMENT NO. #1 TO THE FY 2025-27 CITY COUNCIL PRIORITY WORKPLAN, UNDER MAJOR POLICY AREA: FOCUS ON ECONOMIC DEVELOPMENT AND FISCAL DIVERSIFICATION TO ADD: POLICY No. 417 - POLICY IMPLEMENTATION OF AN ENHANCED INFRASTRUCTURE FINANCING DISTRICT (EIFD) FORMATION AND DEVELOPMENT, AND APPROPRIATE A TOTAL OF $79,000 IN ONE-TIME FUNDING FROM FY 2025-26 GFDR FUND BALANCE (FUND 110) FOR POLICY IMPLEMENTATION
CEQA: This proposed action is not a project as defined by CEQA.
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
FY 2023-25 Council Priority Workplan Compliance Statement
Under Major Policy Goal: Focus on Economic Development and Fiscal Diversification , the City Council would consider adding an amendment to the FY 2025-27 City Council Priority Workplan, effective April 7, 2025.
CEQA Compliance Statement
This proposed action is not a project under CEQA; although, particular projects in the Workplan may be subject to CEQA and require additional review in the future.
BACKGROUND
Following the City’s Long Range Financial Forecast presented in December 2023, the City Manager has been seeking creative solutions to enhance fiscal and revenue capacity for the City’s’ General Fund Operating Budget and to assist in mitigating declining Casino contract revenue to City which has totaled nearly ($2.4M) since FY 2022-23 through FY 2024-25.
Strategic Budget Initiatives Adopted
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. These Strategic Budget Initiatives were implemented in the development and eventual adoption of the City’s current Adopted Two-Year (Biennial) GF Operating Budget in May 2024, effective July 1, 2024.
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
FY 2025-27 Council Priority Workplan - Policy Objectives
As a new economic development tool, an Enhanced Infrastructure Financing District (EIFD), would be a proposed policy that is consistent with ongoing implementation of current policy objectives contained in the adopted FY 2025-27 Council Priority Workplan (effective April 7, 2025) including, but not limited to, the following:
• Policy #301.3: Promote housing production to meet RHNA requirements (2023- 2031)
• Policy #309: Support implementation of certified Housing Element update and Housing Action Plan
• Policy #400: Diversify revenue stream using new emerging technologies
• Policy #402: Find creative ways of attracting new business and economic investment
• Policy #403: Create a long-term, sustainable economic sustainability plan for mitigating economic impacts from competing native gaming casino projects (i.e. Vallejo casino)
• Policy #405: Explore and sustain new revenue enhancements to the City’s General Fund
Enhanced Infrastructure Financing District (EIFD)
Under Chapter 2.99 of Part 1 of Division 2 of Title 5 of the State of California Government Code (starting with Section 53398.50), the City can establish an Enhanced Infrastructure Financing District (EIFD). This mechanism contained in State law allows for the development of an Infrastructure Financing Plan (IFP) to fund capital improvements and enhance infrastructure throughout the City. Furthermore, an EIFD is a governmental entity, legally separate and distinct from the City, and is governed by a Public Financing Authority (PFA) for the purpose of funding public capital facilities and infrastructure, as well as other specified projects that are incorporated within a proposed Infrastructure Financial Plan (IFP).
Many cities and counties in CA are exploring the feasibility of EIFDs to generate new revenue sources for primarily two (2) reasons to include the following:
1. Return on Investment: Private sector investment induced by district commitment accelerates growth of net fiscal revenues, job creation, housing production, essential infrastructure improvements; and
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).
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) Road and Bridge Improvements
Kosmont Financial - 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.
The City Manager, under his current budget authority, retained Kosmont to conduct a Phase I - Feasibility Analysis on EIFD development and formation for the City of San Pablo. 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, for formal consideration and review.
Economic Development, Housing and Proj. Mgmt Standing Committee Review
On December 10, 2025, following a presentation on the feasibility analysis and benefits on the development and formation of a future EIFD for San Pablo, the EDHPM Standing Committee, consisting of Councilmembers Cruz and Ponce, recommended the following to the City Council:
1. Recommend a Policy Recommendation to the FY 2025-27 Council Priority Workplan (under Major Policy Goal: Focus on Economic Development and Fiscal Diversification) to proceed with adding:
Add 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.”;
2. Direct City Manager / Kosmont Consultant Team to finalize the feasibility analysis (Phase I), and upon completion, recommend proceeding with implementation (Phase II), with a one-time funding allocation of $79,000 from FY 2025-26 GFDR (Fund 110) Operating Reserve; and
3. Schedule a Council Study Session for further City Council review/feedback on progress & implementation; 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.
This evening, following review and recommendation by the EDHPM Standing Committee (Cruz; Ponce), the City Manager is recommending Kosmont provide the formal results of Phase I - Feasibility Analysis, and an overview of next steps for Phase II - Policy Implementation to the City Council to proceed with formal EIFD formation and establishment for the City of San Pablo.
FISCAL IMPACT
There are no budgeted funds for this expense contained in the Adopted FY 2024-25 & FY 2025-26 Two-Year (Biennial) GF Operating Budget. Therefore, the City Manager is requesting the City Council appropriate a total of $79,000 in one-time funds from FY 2025-26 GFDR Fund 110 to Fund 100-1310-43600 Professional Services to proceed with Phase II - Policy Implementation phase under an existing contract executed with Kosmont Financial via adopted Resolution.
ATTACHMENTS
Att A - Resolution
Att B - Proposed Presentation on Phase I - EIFD Feasibility Analysis and next steps on Phase II - Policy Implementation for EIFD Formation for the City of San Pablo