Salinas did not issue these bonds. Salinas Public Facilities, Inc. did — a California nonprofit public benefit corporation organized in April 2016, recognized as a 501(c)(3), operating from offices at 1700 7th Avenue, Suite 2100, Seattle, Washington, the same address as its parent, the nonprofit developer Public Facilities Group. official statement
- It is a limited-purpose entity, formed
exclusively to issue the Bonds and the Library Bonds
and to develop and manage the police headquarters and El Gabilan Library projects. It is not a governmental unit and has no taxing power.
official statement
- Its three officers and directors are executives of Public Facilities Group — John Finke (director and president), Erin Birkenkopf (director, vice president, secretary and treasurer) and Matt Calcavecchia (director and vice president). None is a City of Salinas official. official statement
- The offering document disclosed the entity’s inexperience in plain terms:
PFG and the Issuer have only been in existence since 2016 and have not yet completed a project financing.
Salinas was its opening transaction. official statement
- The issuer owns the building and leases it back to the City until the bonds are retired, at which point ownership passes to the City. official statement news
The creditor of record is not the City’s bank. It is The Bank of New York Mellon Trust Company, N.A., acting as trustee for the bondholders: The Bonds are issued pursuant to an Indenture of Trust, dated as of June 1, 2018 (the ‘Indenture’), by and between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (the ‘Trustee’).
official statement The City’s lease payments — budgeted from Measure G, against a maximum annual debt service of $4,799,181 audited statement — flow to the trustee, which pays the bondholders. official statement council record
No pledge of Measure G exists
In eight years of audited financial statements, the long-term debt note for this lease never names Measure G and discloses no revenue pledge of any kind. audited statement The only link anywhere in the audited volume is one unquantified sentence on a supplementary fund-description page: Lease payments are made from the City’s Measure G Funds.
audited statement
The City draws the distinction itself, on the very same page. For its sister bond issue it writes a real pledge — certificates that will be secured by Measure X Revenues
— and it assigns the twin El Gabilan Library lease to Measure E. audited statement Measure X secures its bonds. Measure G merely pays this lease, as a matter of budget practice. Measure G is a general tax and is legally unrestricted, which is precisely why the City can budget it, redirect it, and under-transfer it without breaching anything.