To: County Board of Supervisors
Department or Agency Name(s): County Executive’s Office
Staff Name and Phone Number: David Guhin and Christel Querijero, 707-565-2431
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
Enhanced Infrastructure Financing District Policy Revision Recommendations
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Recommended Action:
Recommended action
Receive and approve updates to the County’s Enhanced Infrastructure Financing District (EIFD) Policy.
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Executive Summary:
The County's experience with the Santa Rosa and West Sonoma County Enhanced Infrastructure Financing Districts (EIFDs), together with growing interest from other jurisdictions, has identified policy questions not fully addressed by the County's 2024 Enhanced Infrastructure Financing District (EIFD) Policy (Policy). This item presents proposed updates concerning future General Fund commitments, fiscal analysis, governance, project delivery, borrowing, and County-only districts.
Discussion:
An Enhanced Infrastructure Financing District (EIFD) is a type of special-purpose financing district that uses a portion of incremental property tax revenues from new development and property value growth within a specifically defined geographic area to finance public capital facilities or other specified projects of communitywide significance, such as infrastructure and public amenities. An EIFD does not itself impose a new tax. Instead, participating taxing entities agree to dedicate a portion of the growth in their existing property tax revenues above an established base-year amount. [1]
On February 27, 2024, before adopting a resolution approving the Santa Rosa EIFD Infrastructure Financing Plan (IFP), the Board adopted a policy establishing minimum requirements for the County's participation in an EIFD with one or more taxing entities (Attachment A). The policy assumes that a city is requesting County participation, although it also acknowledges that the County may form an EIFD as the sole property tax increment contributor. Its purpose is to protect the County's interests, guide staff evaluation of proposals requesting County participation, and ensure fiscal due diligence before staff recommends participation to the Board. [1]
Since adopting the policy, the County has gained practical experience through participation in the Santa Rosa EIFD and establishment of the West Sonoma County EIFD. On August 18, 2026, staff reported additional interest in establishing County-only and joint city/county districts and presented a cumulative General Fund exposure analysis. [2]
Staff anticipates proposals from the Cities of Cotati, Rohnert Park, and Sebastopol in the next six months. With the growing level of interest in EIFDs as an infrastructure financing tool, the policy update would address cumulative General Fund exposure, contribution limits, governance representation, project readiness, debt controls, and requirements for County-only districts.
Why Updates Are Needed
The County's current policy provides an initial framework for evaluating participation, generally when a city is approaching the County. It requires the city's percentage contribution to be at least equal to the County's, states that the County will not contribute 100% of its increment, requires a positive net impact to the County General Fund, and links participation to established Board priorities. It also provides for preliminary review by the offices of the County Executive and the Auditor-Controller-Treasurer-Tax Collector (ACTTC). These requirements establish the basis for considering an individual proposal, but they do not resolve the full range of financial and administrative questions that arise as the number and variety of proposed districts increase. [1]
The principal fiscal trade-off is not a reduction in the established property-tax base, but a reduction in the County's flexibility to use future revenue growth. Revenue dedicated to an EIFD becomes available for the district's authorized purposes rather than general County priorities. Some of that growth may result from development enabled by the infrastructure investment; some may occur regardless of the EIFD. Distinguishing those sources of growth matters when evaluating the amount of County revenue committed and the additional financial benefit reasonably attributable to the investment. [1, 2]
The August 2026 <https://sonoma-county.legistar.com/LegislationDetail.aspx?ID=8159913&GUID=2945060D-94CA-4DA0-9E75-E16C47B79D4D> analysis presented to the Board examined the combined exposure from existing, proposed, and potential EIFD’s using common assumptions, including a 25% County contribution net of required school-funding transfers. It provided a high-level picture of future revenue that could be dedicated across multiple districts. The analysis was an exposure screen, not an approval analysis for every district or a determination of how much the General Fund can afford to dedicate. It also did not establish that all contemplated districts would proceed on the modeled boundaries, schedules, or terms. [2]
A cumulative review answers a different question from a district-specific fiscal study. An individual proposal may show a positive financial result over its life, yet the combined effect of several commitments may reduce resources available for services, reserves, emergencies, and other infrastructure priorities. Similarly, a project that produces a positive result over several decades may create budget pressure in the first several years. The timing of revenue, the reliability of development assumptions, and any additional County operating costs are therefore relevant alongside EIFD lifetime totals. [2, 9]
The percentage of increment committed is only one part of the County's financial exposure. Total dollars also depend on the geographic area, property-tax base, growth assumptions, contribution period, and revenue sources included. A percentage ceiling does not control those other factors. A seat on the EIFD Public Financing Authority does not necessarily give the County approval rights over material changes, and reimbursement of staff costs does not eliminate administrative capacity or property-tax system constraints. The proposed revisions address these issues separately rather than treating any single requirement as a substitute for the others.
County-only districts create additional implementation questions. A city-sponsored proposal ordinarily identifies the outside jurisdiction as responsible for preparing information, advancing review costs, and participating in project delivery. When the County is the sole tax increment contributor, those responsibilities still exist but must be assigned and funded within the County. The existing policy acknowledges this structure without establishing a separate pathway. [1]
This policy update would also distinguish participation conditions established before an allocation is approved from the County's options after revenue has been pledged or other obligations incurred. Clear limits, reporting duties, milestones, and procedures for material changes can be incorporated into the original approval and agreements.
Other County EIFD Policies
Staff reviewed EIFD policy documents from the counties of Contra Costa, Los Angeles, Monterey, Orange, Sacramento, Santa Cruz, and Ventura (Attachments D through J). The policies provide useful precedent for the issues under consideration, but they vary in purpose, contribution limits, fiscal review, governance, financing, and administration. A more detailed discussion is provided in Attachment B. [3, 4, 5, 6, 7, 8, 9]
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Policy Area |
Other Policy Approaches |
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Purpose and Eligibility |
Peer policies use different screens for public benefit, including economic development, job creation, affordable housing, climate resilience, transportation, and other infrastructure goals. Ventura separately addresses County-initiated and joint EIFDs, illustrating the need for different procedures when the County is the sole increment contributor. [3, 4, 5, 6, 8, 9] |
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Fiscal Commitment |
Numerical contribution limits in the reviewed policies range from 25% to 50% of the relevant County increment, while Los Angeles and Sonoma state that the County will not contribute 100% without a lower numerical ceiling. Peer policies also use dollar caps, city matching requirements, and contribution or district terms ranging from 20 to 45 years. These controls address different dimensions of exposure. [3, 4, 5, 6, 7, 8, 9] |
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Fiscal Analysis |
Most policies require a positive net fiscal impact. More detailed approaches include with-and-without development comparisons, "but for" tests of whether County participation is necessary, sensitivity analysis, and review of new service and administrative costs. Ventura also examines near-term affordability. The reviewed peer policies generally focus on individual districts rather than a required portfolio-wide exposure model. [4, 5, 6, 7, 8, 9] |
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Financing and Delivery |
Policies address financing and project-delivery risk through debt-readiness standards, contingency planning, performance milestones, and remedies for stalled projects. Sacramento includes historical-revenue and debt-coverage provisions. Several policies recognize that withdrawal or dissolution must account for debt and contractual obligations already incurred. [4, 5, 8, 9] |
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Governance and Accountability |
Peer approaches range from a minimum County PFA seat to representation tied to financial participation. Ventura also addresses approval rights over material IFP changes, debt secured by County increment, and project changes, and requires implementation agreements with dollar limits, milestones, remedies, and reporting. [3, 5, 8, 9] |
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Administration |
Policies range from reimbursement of consultant costs to advance funding of County staff, legal, tax-system, and implementation costs. Santa Cruz and Ventura also address Tax Rate Area and property-tax system issues. These provisions distinguish reimbursement from the separate question of County administrative capacity and system risk. [3, 4, 5, 8, 9] |
Across the peer policies, three questions remain distinct: whether a project is appropriate for County participation, whether the County can afford the proposed commitment, and what obligations and oversight apply after participation is approved. A project may advance County priorities while still reducing future General Fund flexibility, and a financially manageable contribution does not by itself establish sufficient public benefit.
No single safeguard substitutes for the others. A percentage cap does not control total dollar exposure; a positive lifetime fiscal result does not establish near-term affordability; PFA representation does not necessarily provide control over material changes; and cost reimbursement does not eliminate administrative or system impacts. Sonoma County’s cumulative exposure analysis adds a separate portfolio-level consideration by evaluating the combined effect of multiple districts on future General Fund flexibility. [2]
Recommendations for County EIFD Policy Revisions
1. The proposed updated Policy is attached (Attachment C). Staff’s recommendations, outlined below, retain the current policy's requirements for fiscal due diligence and alignment with County priorities while defining the information, limits, responsibilities, and review steps that would apply to future proposals. Cumulative General Fund Review
Recommendation: Require the County Executive’s Office, in collaboration with the Auditor-Controller-Treasurer-Tax Collector and County Counsel, to prepare a cumulative review so that each EIFD is evaluated not only independently, but also in the context of the County’s existing and potential EIFD commitments.
§ Require a preliminary cumulative exposure screen before authorizing substantial County-funded feasibility work or formal participation steps.
§ Update the analysis before approval of an Infrastructure Financing Plan (IFP) or County increment allocation.
§ Show the County’s existing exposure, the proposed addition, and the combined annual and lifetime effects.
§ Evaluate exposure in relation to the County’s General Fund forecast, reserve policies, not just percentages of total County expenditures.
§ Provide an annual EIFD portfolio update reflecting changes in revenues, forecasts, and potential districts.
2. Contribution Limits and Duration
Recommendation: Replace the current requirement that the County will not contribute 100% of its increment with clearer limits on the percentage and duration of County participation.
§ Set maximum County contribution of property tax increment at 25%.
§ Specify a maximum participation period of 30 years.
A lower rate retains a larger share of growth; a shorter term returns that share to general County use sooner. Each provision can also reduce project funding or borrowing capacity. The Board's direction would establish how those controls are combined.
3. Financial Analysis
Recommendation: Establish a consistent approach for demonstrating a positive net fiscal impact to the County.
§ Compare County revenues and costs with and without the EIFD, including:
o property-tax growth reasonably expected without the investment;
o development reasonably attributable to the investment;
o County increment contributed to the EIFD; and
o additional County revenues generated.
§ Include new County costs associated with the proposal, including services, administration, maintenance, and financing-related costs.
§ Require independent analysis with County staff responsible for reviewing assumptions and methodology.
§ Show the projected annual and total impacts on the County General Fund over the County’s full participation period.
§ Require sensitivity analysis addressing slower growth, development delays, cost increases, and combinations of adverse assumptions.
4. Financing Need, Public Benefit, and Cost-Sharing
Recommendation: Require proposals to demonstrate why County participation is needed and what public benefit the County receives in return.
§ Identify the funding gap and explain how County participation changes the feasibility, timing, or scale of the proposed eligible projects.
§ Identify and evaluate other available funding sources, including city or developer contributions, development fees, grants, and borrowing or other financing mechanisms.
§ Identify public benefits aligned with existing Board priorities.
5. Governance and County Approval Rights
Recommendation: Clarify both County representation on the Public Financing Authority (PFA) and the County’s rights over decisions affecting its financial commitment.
§ When the EIFD has 2 or more affected taxing entities, require PFA membership to be a majority of members from the legislative bodies of the participating entities, an alternate for each, and a minimum of two members of the public chosen by the legislative bodies of the participating entities, with the County represented by at least one Supervisor and one public member appointee.
§ Define these rights in participation agreements and other governing documents (e.g., Infrastructure Financing Plan).
6. County-Only Districts
Recommendation: Create a separate policy pathway for EIFDs established by the County without another taxing agency participating at formation.
§ Identify funding for feasibility and formation; PFA staffing; project delivery responsibility, if projects are known; and ongoing administration.
§ Apply the same fiscal, contribution, readiness, cumulative-exposure, and reporting requirements used for multi-jurisdiction EIFDs.
§ Require a review and analysis of other alternative financing mechanisms for anticipated projects.
§ Note the opportunity for later participation by a city or special district.
7. Administrative Feasibility and Cost Recovery
Recommendation: Address administrative and property-tax system impacts before the County commits revenue.
§ Require early Auditor-Controller-Treasurer-Tax Collector (ACTTC) review of district boundaries; tax-increment calculations; required property-tax system changes; and staffing or other administrative demands.
§ Evaluate proposed boundaries for fiscal effect.
§ Require jurisdictions requesting participation to reimburse reasonable actual County review and administration costs, and EIFD formation costs including EIFD consultants, through a reimbursement agreement identifying eligible costs and payment responsibilities that is executed prior to final approval of the Infrastructure Financing Plan. Reimbursement should be made first dollars generated by the EIFD.
§ Require County-only proposals to identify an approved County funding source for formation and administrative work.
Board Direction and Implementation
Staff recommends revisions to the County EIFD Policy as provided in Attachment C. New requirements would apply prospectively to new commitments and amendments, subject to existing agreements and legal obligations. Existing districts would remain in the cumulative monitoring analysis, but the policy update would not revise their approved allocations, financing obligations, or agreements.
Source References
[1] Sonoma County, Enhanced Infrastructure Financing District Policy, February 2024, pp. 1-2
[2] Sonoma County Board item, August 18, 2026, cumulative General Fund impact of EIFDs and other EIFD exploration. Board report <https://sonoma-county.legistar.com/LegislationDetail.aspx?ID=8159913&GUID=2945060D-94CA-4DA0-9E75-E16C47B79D4D>
[3] Santa Cruz County, EIFD Participation Policy, February 10, 2026 version, PDF pp. 1-6; contribution and term provisions, pp. 1-2; fiscal and housing provisions, pp. 3-4; administration, pp. 4-6.
[4] Contra Costa County, EIFD Participation Policy, February 22, 2022 packet, PDF pp. 3-6, policy sections 1-5.
[5] Monterey County, EIFD Participation Policy, PDF pp. 1-5; contribution and term provisions, pp. 1-2; housing and fiscal analysis, pp. 3-5.
[6] Orange County, EIFD Participation Policy, April 9, 2019, Attachment C, PDF pp. 3-5.
[7] Los Angeles County, Board Policy 3.106, June 24, 2025, PDF pp. 1-2 and 4-7; minimum requirements, pp. 5-6; fiscal analysis and proposal standards, pp. 6-7.
[8] Sacramento County, Financing Districts Local Goals and Policies, sections II-IV (administration), IX and XIV (TIF debt provisions), XIX (exceptions), and XX (TIF criteria); PDF pp. 4-7, 10, 16, and 20-22.
[9] Ventura County, EIFD Policy, version 2026.01, updated May 19, 2026, sections B-G and summary H; PDF pp. 3-10 and 12.
Strategic Plan:
N/A
Racial Equity:
Was this item identified as an opportunity to apply the Racial Equity Toolkit?
No
Prior Board Actions:
February 2024 - Board approved County EIFD Policy
August 2026 - Report to the Board on Cumulative Impact of EIFDs on the General Fund
Fiscal Summary
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Narrative Explanation of Fiscal Impacts:
No direct fiscal impacts of this policy recommendation.
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Narrative Explanation of Staffing Impacts (If Required):
None.
Attachments:
A. County Enhanced Infrastructure Financing District Policy, February 2024
B. Review of Other County EIFD Policies
C. Draft Revised County EIFD Policy
D. Contra Costa County EIFD Policy
E. Monterey County EIFD Policy
F. Orange County EIFD Participation Policy
G. Sacramento County Financing District Policy
H. Santa Cruz County EIFD Policy
I. Los Angeles County EIFD Policy
J. Ventura County EIFD Policy
Presentation
Related Items “On File” with the Clerk of the Board: