Sonoma council opens door to county-led EIFD study, seeks details before any commitment

The Sonoma City Council agreed on Aug. 26 to continue exploring whether to participate in a county-led enhanced infrastructure financing district (EIFD) covering parts of Sonoma Valley, a financing tool that would let participating jurisdictions set aside future growth in property tax “increment” to pay for infrastructure and housing.

The council heard a detailed presentation from consultants Joe Diego and Richard Kerrigan of Cosmo, and from County staff including Crystal Carrie Harrell. Cosmo described the EIFD as a long-term, parcel-specific tax-increment mechanism that “does not add a new tax,” and said it can be used for water, sewer, roads, parks, remediation, wildfire resilience and affordable housing. The county’s preliminary outreach asks cities to decide whether they want their boundaries included in an exploration phase that could lead to a formal plan and separate approvals by each agency.

Supporters say the tool can accelerate projects by providing a predictable funding source and attract state grant dollars, while skeptics and several council members pressed for careful testing of fiscal impacts and protections for city revenues.

“Many cities would like to have the opportunity of potential partnership,” Joe Diego said, describing examples where counties and cities pooled shares to create a larger fund. Cosmo said the tool typically yields more revenue potential when multiple agencies contribute rather than a single jurisdiction acting alone.

Council members asked about timing, administrative costs and legal limits created by legacy redevelopment obligations that still divert some tax revenues until 2036. Cosmo and County staff said those existing successor-agency obligations can reduce available increment in the near term and that some parcels previously in redevelopment project areas would have to be handled parcel-by-parcel rather than with a blanket approach.

Council members expressed general support for continuing an evaluation but requested further analysis before committing. Council Member Kearney said the effort could help unification and better city–county coordination. Council Member Lowe and others emphasized the many “off-ramps” in the process and urged staff to pursue the study if it could be done without diverting key department resources.

The city manager said the county has already funded an initial engagement with consultants and that any further shared costs would be brought back to council for approval. County representatives said initial costs could be shared, and that some upfront expenses can later be reimbursed from EIFD revenues if a district is formed.

What happens next: staff and Cosmo will continue fiscal-impact modeling and boundary scenarios if the council wants to proceed. The county’s presentation framed the current stage as an “exploration” and emphasized that forming an EIFD requires multiple public hearings, mailed and posted notices and an opportunity for landowners and residents within any proposed boundary to file protests. Any infrastructure financing plan would need separate approval by the city council and the county board before a hybrid public financing authority could act.

Why it matters: An EIFD could provide a long-term dedicated funding source for local infrastructure and housing priorities but would also earmark part of future property tax growth for the district rather than the city’s general fund. Council members asked staff to show comparative scenarios (with and without an EIFD) that quantify net fiscal effects, administrative costs and potential benefits to projects such as flood control, groundwater or wildfire mitigation.

Council direction: The council gave nonbinding direction to continue evaluating the county proposal, seek more detailed fiscal and boundary analysis, and return with recommendations and proposed cost-sharing arrangements for the next steps. No formal commitment to join an EIFD was made.

Ending: City and county staff said they would return with more detailed fiscal analyses, draft boundary options and a timeline for public meetings if the council continues to support the evaluation. Cosmo estimated a typical formation timeline of roughly 12 months from commitment to formation, but both consultants and county staff cautioned that timing varies by jurisdiction and depend on local conditions and legal requirements.