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Salinas Public Facilities, Inc.

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Salinas Public Facilities Inc. (“SPF”) incorporated April 28, 2016, as a Section 501(c)3 nonprofit public benefit corporation.  It has been organized consistent with the provisions of California State law as a California Nonprofit Public Benefit Corporation for charitable purposes.  The SPF has not been organized for the private gain of any person.

Below is an excerpt from Article 4 of the SPF’s Articles of Incorporation that define its five specific purposes:

4.2. Purposes.  The Corporation shall be organized and operated exclusively for such purposes and activities as permitted by Section 501(c)(3) of the Internal Revenue Code (the “Code”), including, but not limited to, the following purposes: 

(1) To assist in the erection and maintenance of public buildings, monuments, facilities, housing, or works; 

(2) To combat community deterioration and to carry out neighborhood revitalization and community economic development by receiving and administering funds exclusively for educational and charitable purposes; 

(3) To promote social welfare and education through cooperative programs with governmental entities; 

(4) To undertake activities which lessen the burdens of government; and 

(5) To carry on other charitable activities associated with the foregoing purposes as allowed by law. 

Pursuant to guidance provided by the Internal Revenue Service, bonds issued by a nonprofit corporation organized under the laws of the state of California in order to finance facilities in the state of California may qualify as tax-exempt obligations upon compliance with the requirements set forth in the Internal Revenue Code and associated regulations and revenue procedures.  SPF has been formed as a nonprofit public benefit corporation for the purpose of designing, permitting, constructing and equipping a new police and library facilities and associated improvements for use by the City of Salinas.  SPF will issue tax- exempt bonds as described below:

Police Station Facility:

SPF proposes the issuance of not to exceed $60,000,000 of lease revenue bonds to pay a portion of the costs of a plan of finance consisting of designing, permitting, constructing and equipping a new public safety building, including ancillary parking and related facilities, to be located at 312 East Alisal Street in Salinas, and paying costs of issuing the bonds.  SPF will be the initial owner of the bond-financed facilities, and the City will be the user of the facilities.  The City’s payments of rent under the project lease for the police station facility will be used to pay debt service on the bonds, but the bonds will not in any way constitute an obligation or debt of the City.  The City will only be obligated to make lease payments for so long as it has beneficial use and occupancy of the police station facility.  Upon the completion of the police station facility and the commencement of the lease payments, the City anticipate a $8.3 million pay-down of the bonds from accumulated Measure G funds and other moneys, reducing the amount of outstanding bonds and shortening the financing term to 2030, coinciding with the term of Measure G.  Lease payments are expected to be made from the City’s Measure G Fund and are currently estimated at $4.8 million annually through 2030.  The sale of the bonds to finance the police station facility is anticipated to occur in June 2018. 

El Gabilan Library:

SPF proposes the issuance of not to exceed $22,000,000 of lease revenue bonds to be issued by SPF to pay a portion of the costs of a plan of finance consisting of designing, permitting, constructing and equipping the El Gabilan Library expansion, including ancillary parking, to be located at 1400 N. Main Street in Salinas, and paying costs of issuing the bonds.  SPF will be the initial owner of the bond-financed facilities, and the City will be the user of the facilities.  The City’s payments of rent under a lease for the library will be used to pay debt service on the bonds, but the bonds will not in any way constitute an obligation or debt of the City.  The City will only be obligated to make lease payments for so long as it has beneficial use and occupancy of the library facility.  Upon the completion of the El Gabilan Library facility and the commencement of the lease payments, the City anticipates a $3 million pay-down of the bonds from accumulated Measure E funds and other moneys, reducing the amount of outstanding bonds.  Lease payments will be made from the City’s Measure E Fund and are currently estimated at $850,000 per year over a 30-year term ending in 2048.  The sale of the bonds to finance the library facility is anticipated to occur in June 2018.

The lease payments for both building are equal to the debt payments on the bonds.  When the debts are retired, the building and all rights of ownership contained therein return to the City.

SPF is governed by a Board of Directors and is managed by Officers John Finke (President), Erin Birkenkopf (Vice President/Secretary/Treasurer), and Matt Calcavecchia (Vice President).  They are acting on behalf of the City to bring these two exciting projects forward. Their web-site and contact information can be found here: www.publicfacilitiesgroup.org

Linked to this web-page are all of the public meeting agendas and documents related to the business of the SPF.  Also provided are the Articles of Incorporation and the IRS letter confirming its establishment and assigning its Employer Identification Number.

INQUIRIES:
All inquiries about this business structure or the SPF can be directed to the City of Salinas Public Works Department at (831) 758-7241. 
The current project manager is Don Reynolds, Acting Public Works Director, and he can also be reached by emailing DonaldR [at] ci.salinas.ca.us