CITY OF CUPERTINO
CI
TY COUNCIL
AGENDA
10300 Torre Avenue, City Hall, Conference Room C and via Teleconference Tuesday, February 3, 2026
6:00 PM
Cupertino Public Facilities Corporation
IN-PERSON AND TELECONFERENCE / PUBLIC PARTICIPATION INFORMATION OP
TIONS TO OBSERVE:
Members of the public wishing to observe the meeting may do so in one of the following ways:
1) Attend in person at Cupertino City Hall, Conference Room C, 10300 Torre Avenue. 2) Watch a live stream online at https://youtube.com/@cupertinocitycommission. 3) Attend in person at a remote Teleconference Location noticed pursuant to Gov. Code 54953(b)(2), which location, if noticed, would be stated on the cover page of this agenda.
OPTIONS TO PARTICIPATE AND COMMENT:
Members of the public wishing to address the Public Facilities Corporation may do so in the following ways:
1) Appear in person for at Cupertino City Hall, Conference Room C, 10300 Torre Avenue A. During “Oral Communications”, the public may comment on matters not on the agenda, and for agendized matters, the public may comment during the public comment period for each agendized item.
B. Speakers are requested to complete a Speaker Card. While completion of Speaker Cards is voluntary and not required to attend the meeting or provide comments, it is helpful for the purposes of ensuring that all speakers are called upon.
C. Speakers must wait to be called, then proceed to the lectern/podium and speak into the microphone when recognized by the President.
D. Speakers are limited to three (3) minutes each. However, the President may reduce the speaking time depending on the number of people who wish to speak on an item. A speaker representing a group between 2 and 5 members of the public in attendance may have up to 2 minutes per group member to speak, up to 10 minutes maximum.
1 CPFC 02-03-2026 Searchable Packet
1 of 30
City Council A genda February 3, 2026
E. P lease note that due to cyber security concerns, speakers are not allowed to connect any personal devices at the lectern/podium. However, speakers that wish to share a document (e.g. presentations, photographs or other documents) during oral comments may do so in one of the following ways:
a) At the overhead projector at the podium, or
b) E-mail the document to [email protected] by 3:00 p.m. and staff will advance the slides/share the documents during your oral comment.
2) Written Communications as follows:
A. E-mail comments to the Corporation at [email protected] as follows:
a. E-mail comments must be received by 4:00 p.m. on the day of the meeting in order to be forwarded to the Corporation before the meeting.
b. Emailed comments received following agenda publication but prior to, or during, the meeting, will be posted to the City’s website after the meeting. c. These e-mail comments will also be received by each Corporation Member, the City Manager, and the City Clerk’s Office. Comments on non-agenda items sent to any other email address will be included upon the sender's request.
B. Regular mail or hand delivered addressed to the: Public Facilities Corporation, City Hall, 10300 Torre Avenue, Cupertino, CA 95014
3) Open Session Teleconference in one of the following ways:
A. Online via Zoom on an electronic device (Audio and Video): Speakers must register in advance by clicking on the link below to access the meeting:
https://cityofcupertino.zoom.us/j/85381057104
a) Registrants will receive a confirmation email containing information about joining the webinar.
b) Speakers will be recognized by the name they use for registration. Once recognized, speakers must click ‘unmute’ when prompted to speak.
c) Please read the following instructions about technical compatibility carefully: One can directly download the teleconference (Zoom) software or connect to the meeting in their internet browser. If a browser is used, make sure the most current and up-to-date browser, such as the following, is used: Chrome 30+, Firefox 27+, Microsoft Edge 12+, Safari 7+.
Certain functionality may be disabled in older browsers, including Internet Explorer.
B. By Phone (Audio only): No registration is required in advance and speakers may join the meeting as follows:
2 CPFC 02-03-2026 Searchable Packet
2 of 30
City Council A genda February 3, 2026
a) D ial 669-900-6833 and enter WEBINAR ID: 853 8105 7104 b) To “raise hand” to speak: Dial *9; When asked to unmute: Dial *6 c) Speakers will be recognized to speak by the last four digits of their phone number.
C. Via an H.323/SIP room system:
Join from an H.323/SIP room system:
H.323:
144.195.19.161 (US West)
206.247.11.121 (US East)
Meeting ID: 853 8105 7104
SIP: [email protected]
D. Online via the teleconferencing device (Audio and Video) being used to provide access to the meeting from a remote Teleconference Location noticed pursuant to Gov. Code 54953(b)(2), which location, if noticed, would be stated on the cover page of this agenda. a) Speakers are required to notify the City Clerk via email to [email protected] prior to noon on the date of the meeting during which they plan to participate and comment from the remote location noticed to ensure the City Clerk is prepared to accept their comment. b) If the teleconferencing device malfunctions impeding access to the meeting from the remote location, the speaker may alternatively participate via the other options for remote participation provided above.
NOTICE AND CALL FOR A SPECIAL MEETING OF THE CUPERTINO PUBLIC FAC
ILITIES CORPORATION
NOTICE IS HEREBY GIVEN that a special meeting of the Cupertino Public Facilities Corporation is hereby called for Tuesday, February 03, 2026, commencing at 6:00 p.m. in City Hall, Conference Room C, 10300 Torre Avenue, Cupertino, California 95014 and via teleconference. Said special meeting shall be for the purpose of conducting business on the subject matters listed below under the heading, “Special Meeting."
SPECIAL MEETING
CALL TO ORDER
R
OLL CALL
POSTPONEMENTS AND ORDERS OF THE DAY
CONSENT CALENDAR
1. Subject: Approval of the November 17, 2025 Cupertino Public Facilities Corporation meeting minutes.
3 CPFC 02-03-2026 Searchable Packet
3 of 30
City Council A genda February 3, 2026
Recommended Action: Approve the November 17, 2025 Cupertino Public Facilities Corporation meeting minutes.
A - Draft Minutes
ACTION CALENDAR
2. Subject: Follow-up on November 17, 2025 Management Report, Filing Requirements, and Regular Meeting Schedule
Recommended Action: Receive the update on responses to questions posed by the Corporation Board on November 17, 2025, and adopt Resolution No. 2026-1 establishing a new time for regular annual meetings (Attachment A).
Staff Report
A – Resolution 2026-1
B – Management Report to the Board (11-19-2024)
C - Management Report to the Board (11-17-2025)
D – Informational Memo (12-06-2023)
E - Informational Memo (04-08-2024)
F - Informational Memo (04-25-2024)
G – Tax Exempt Reinstatement Letter
ADJOURNMENT
Lobbyist Registration and Reporting Requirements: Individuals who influence or attempt to influence l
egislative or administrative action may be required by the City of Cupertino’s lobbying ordinance (Cupertino Municipal Code Chapter 2.100) to register and report lobbying activity. Persons whose communications regarding any legislative or administrative are solely limited to appearing at or submitting testimony for any public meeting held by the City are not required to register as lobbyists.
For more information about the lobbying ordinance, please contact the City Clerk’s Office at 10300 Torre Avenue, Cupertino, CA 95014; telephone (408) 777-3223; email [email protected]; and website: www.cupertino.org/lobbyist.
The City of Cupertino has adopted the provisions of Code of Civil Procedure §1094.6; litigation challenging a final decision of the City Council must be brought within 90 days after a decision is announced unless a shorter time is required by State or Federal law.
Prior to seeking judicial review of any adjudicatory (quasi-judicial) decision, interested persons must file a petition for reconsideration within ten calendar days of the date the City Clerk mails notice of the City’s decision. Reconsideration petitions must comply with the requirements of Cupertino Municipal Code §2.08.096. Contact the City Clerk’s office for more information or go to http://www.cupertino.org/cityclerk for a reconsideration petition form.
In compliance with the Americans with Disabilities Act (ADA), anyone who is planning to attend this meeting who is visually or hearing impaired or has any disability that needs special assistance should
4 CPFC 02-03-2026 Searchable Packet
4 of 30
City Council A genda February 3, 2026
call the City Clerk's Office at 408-777-3223, at least 48 hours in advance of the meeting to arrange for assistance. In addition, upon request in advance by a person with a disability, meeting agendas and writings distributed for the meeting that are public records will be made available in the appropriate alternative format.
Any writings or documents provided to a majority of the Cupertino City Council after publication of the packet will be made available for public inspection in the City Clerk’s Office located at City Hall, 10300 Torre Avenue, Cupertino, California 95014, during normal business hours; and in Council packet archives linked from the agenda/minutes page on the City web site.
IMPORTANT NOTICE: Please be advised that pursuant to Cupertino Municipal Code section
2.08.100 written communications sent to the City Council, Commissioners or staff concerning a matter on the agenda are included as supplemental material to the agendized item. These written communications are accessible to the public through the City website and kept in packet archives. Do not include any personal or private information in written communications to the City that you do not wish to make public, as written communications are considered public records and will be made publicly available on the City website.
5 CPFC 02-03-2026 Searchable Packet
5 of 30
CITY OF CUPERTINO
Agenda Item
26-14838 Agenda Date: 2/3/2026
Agenda #: 1.
Subject: Approval of the November 17, 2025 Cupertino Public Facilities Corporation meeting minutes.
Approve the November 17, 2025 Cupertino Public Facilities Corporation meeting minutes.
CITY OF CUPERTINO Printed on 1/30/2026Page 1 of 1
powered by Legistar™
6 CPFC 02-03-2026 Searchable Packet
6 of 30
UNOFFICIAL MINUTES
CUPERTINO PUBLIC FACILITIES CORPORATION
Monday, November 17, 2025
At 6:46 p.m. President Liang Chao called the Regular Cupertino Public Facilities Corporation meeting to order in City Hall Conference Room C, 10300 Torre Avenue and via teleconference.
ROLL CALL
Present: President Liang Chao, Vice President Kitty Moore, and Corporation members J.R.
Fruen, Sheila Mohan, and Ray Wang. Absent: None
POSTPONEMENTS AND ORDERS OF THE DAY – None
ORAL COMMUNICATIONS
Planning Commissioner San Rao (self) discussed the Public Facilities Corporation jurisdiction, Form 990-T exemptions, and the City’s tax-exempt status.
CONSENT CALENDAR
President Chao opened the public comment period and, seeing no one, closed the public comment period.
MOTION: Moore moved and Fruen seconded to approve the Consent Calendar as presented.
The motion passed with the following vote: Ayes: Mohan, Fruen, Chao, Moore, and Wang.
Noes: None. Abstain: Wang. Absent: None.
1. Subject: Approval of the November 18, 2024 Cupertino Public Facilities Corporation meeting minutes
Recommended Action: Approve the November 18, 2024 Cupertino Public Facilities Corporation meeting minutes
PUBLIC HEARINGS - None
7 CPFC 02-03-2026 Searchable Packet
7 of 30
City Council Minutes November 17, 2025
ACTION CALENDAR
2. Subject: Cupertino Public Facilities Corporation Management Report Recommended Action: Receive the Cupertino Public Facilities Corporation Management Report
Written communications for this item included a desk item report with staff answers to corporation member questions and emails to the Corporation.
Assistant Treasurer Jonathan Orozco reviewed the management report.
Corporation members asked questions and made comments.
President Chao opened the public comment period and, seeing no one, closed the public comment period.
The Corporation received the Cupertino Public Facilities Corporation Management Report.
CORPORATION MEMBER REPORTS
Corporation members reported out.
FUTURE AGENDA ITEMS
Corporation members added the following items for staff follow-up.
• Schedule a future meeting to discuss potential bylaw amendments, especially regarding the CEO and Clerk roles.
• Clarify who will sign the Statement of Information.
• Confirm and document why Form 990 is being used instead of Form 8038G. • Examine Form 8038G for QSIP number fields and appropriateness. • Collect information previously attached to the December 6, 2023 informational memo. • Check the City Council/public records page for Cupertino Public Facilities Corporation materials and identify missing documents.
• Understand corporation members’ fiduciary duties and personal exposure when overseeing the corporation versus city council duties.
• Explore whether issuing similar bonds could be advantageous in the future if interest rates decline, noting the corporation cannot call existing bonds before maturity. • Look into how previous bonds were issued since 1987 for context and lessons learned. • Capture other points from the discussion that might need follow-up. 8 CPFC 02-03-2026 Searchable Packet
8 of 30
City Council Minutes November 17, 2025
• Add inputting the judgment from the IRS.
• The Corporation agreed to hold a special meeting on Tuesday, January 27, 2026 at 5:45 p.m.
AD
JOURNMENT
At 7:45
p.m., President Chao adjourned the Regular Public Facilities Corporation Meeting.
Min
utes prepared by:
_
Kirsten Squarcia, Secretary
9 CPFC 02-03-2026 Searchable Packet
9 of 30
CITY OF CUPERTINO
Agenda Item
26-14834 Agenda Date: 2/3/2026
Agenda #: 2.
Subject: Follow‐up on November 17, 2025 Management Report, Filing Requirements, and Regular Meeting Schedule
Receive the update on responses to questions posed by the Corporation Board on November 17, 2025, and adopt Resolution No. 2026-1 establishing a new time for regular annual meetings (Attachment A).
CITY OF CUPERTINO Printed on 1/30/2026Page 1 of 1
powered by Legistar™
10 CPFC 02-03-2026 Searchable Packet
10 of 30
ADMINISTRATIVE SERVICES DEPARTMENT
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
TELEPHONE: (408) 777-3220
CUPERTINO.GOV
MANAGEMENT REPORT
February 3, 2026
Subject
Follow‐up on November 17, 2025 Management Report, Filing Requirements, and Regular Meeting Schedule
Recommended Action
Receive the update on responses to questions posed by the Corporation Board on November 17, 2025, and adopt Resolution No. 2026‐1 establishing a new time for regular annual meetings.
Background
At the November 17, 2025, meeting of the Cupertino Public Facilities Corporation, the Board received a Management Report from staff and requested additional follow‐up on several administrative and compliance‐related items. The purpose of the February 3, 2026, special meeting is to provide clarifications on those issues and seek formal action on the annual meet
ing schedule.
Follow‐Up Items and Staff Responses:
1. IRS Form 8038‐G Filing Requirements
Staff has reviewed IRS guidance and confirmed that Form 8038‐G is filed at the time of debt issuance. As outlined in the ʺWhen to Fileʺ section of the IRS Instructions for Form 8038‐G (1
0/2021), the form is submitted once the City issues tax‐exempt bonds, such as the 2020 Certificates of Participation (COPs). No additional annual filings of Form 8038‐G are required.
2. Tax‐Exempt Status and Bondholder Impact
Following consultation with subject matter experts and legal counsel, staff confirmed that the temporary lapse in th
e Corporation’s tax‐exempt status did not affect the 2020 COPs’ tax‐exempt standing nor the rights or obligations of the bondholders. The integrity of the debt issuance remains intact.
11 CPFC 02-03-2026 Searchable Packet
11 of 30
3. Annual Meeting Schedule Update
Per direction from the Board, attached is Resolution No. 2026‐1, which updates the time and date for regular meetings of the Corporation to be held annually each November. This replaces Resolution No. 87‐2 and reflects the Corporationʹs current meeting cadence and reporting needs.
4. Statement of Informatio
n
To improve internal controls and align with best practices, staff recommends that the Corporation’s annual Statement of Information be prepared by City staff and signed by either the Finance Manager or Administrative Services Director going forward.
5. Form 990 Filings
Staff has contacted accounting firms to assist with preparation and s ubmission of IRS Form 990 filings. While there is ongoing discussion regarding the specific financial information to include for the fiscal year in which the 2020 COPs were issued, prior‐year returns will be based on annual Financial Transaction Reports submitted to the State Controller’s Office, as th ese reports provide the most accurate and consistent source of Corporation activity.
6. Ongoing Information Gathering
Staff is continuing to compile additional information in response to board inquiries, including clarification of the Corporation’s CEO and Clerk roles, board fiduciary responsibilities, and options for future debt issuance. This information may be presented at the upcoming special meeting or incl
uded in a future informational report once
available.
Next Steps
Staff will continue to work with the City’s legal and tax‐exempt bond counsel, Stradling Yocca Carlson & Rauth LLP, to explore options related to filing exemptions and the Corporation’s ongoing compliance requirements. Any material updates or developments will be presented to the Board at a future meeting or through a written update, as appropriate.
Sustainabilit
y Impact
No sustainability impact.
Fiscal Impact
Any additional expenditures needed to come into compliance will be assumed within existing budget appropriations.
California Environmental Quality Act
Not applicable.
_____________________________________
12 CPFC 02-03-2026 Searchable Packet
12 of 30
Prepared by: Jonathan Orozco, Acting Director of Administrative Services Reviewed by: Floy Andrews, Interim City Attorney
Approved for Submission by: Tina Kapoor, City Manager
Attachments:
A – Resolution 2026‐1
B – Management Report to the Board (11‐19‐2024)
C ‐ Management Report to the Board (11‐17‐2025)
D – Informational Memo (12‐06‐2023)
E ‐ Informational Memo (04‐08‐2024)
F ‐ Informational Memo (04‐25‐2024)
G – Tax Exempt Reinstatement Letter
13 CPFC 02-03-2026 Searchable Packet
13 of 30
RESOLUTION NO. 2026-1
A RESOLUTION OF THE CUPERTINO PUBLIC FACILITIES
CORPORATION APPOINTING TIME AND PLACE OF REGULAR
MEETINGS, SUPERSEDING RESOLUTION NO. 87-2
WHEREAS, on June 2, 1986, the Board of Directors of the Cupertino Public Facilities Corporation approved Resolution No. 86-1, adopting the Bylaws of the Cupertino Public Facilities Corporation; and
WHEREAS, pursuant to Bylaws Article 2, Section 6 . Regular and Organizational Meetings, regular meetings of the Board of Directors shall be held at such time as the Board may fix by resolution from time to time; provided, however, that at least one regular meeting shall be held each year; and
WHEREAS, on June 2, 1986, Resolution No. 86 -3 was adopted, appointing the time and place of regular meetings for the CPFC, resolving that the first Monday in June of each year at the hour of 7:00 p.m . shall be the time and place for regular meetings of the Board pursuant to Article 2, Section 6 of the Bylaws of this Corporation; and
WHEREAS, on July 20, 1987, Resolution No. 87-2 was adopted, appointing the time and place of regular meetings, superseding Resolution No. 86 -3, establishing the second Tuesday in November of each year at the hour of 7:00 p.m. at the offices of the City of Cupertino as the time and place for regular meetings of the Board.
WHEREAS, the Board of Directors of the Cupertino Public Facilities Corporation approved November of each year, without specifying a day or hour, at the offices of the City of Cupertino, as the time and place for the regular meetings of the Board.
NOW, THEREFORE, BE IT RESOLVED that the Board of Directors of the Cupertino Public Facilities Corporation does hereby appoint November of each year, at the offices of the City of Cupertino, as the time and place for the regular meetings of the Board, pursuant to Article 2, Section 6 of the Bylaws of this Corporation.
14 CPFC 02-03-2026 Searchable Packet
14 of 30
Resolution No. 2026-1
PASSED, APPROVED, AND ADOPTED at a special meeting of the Board of Directors of the Cupertino Public Facilities Corporation this 3rd day of February, 2026, by the following vote:
Members
AYES:
NOES:
ABSENT:
ABSTAIN:
SIGNED:
___________
Kitty Moore, President
________________________
Date
ATTEST:
_____________
Lauren Sapudar, Acting Secretary
________________________
Date
15 CPFC 02-03-2026 Searchable Packet
15 of 30
MANAGEMENT REPORT
November 18, 2024
To: Cupertino Public Facilities Corporation
From: Kristina Alfaro, Director of Administrative Services
Re: Tax-Exempt, Reporting Requirements, and Debt Issuance Update
Background
The Cupertino Public Facilities Corporation (CPFC) was incorporated in 1986 as a vehicle to provide financing for public improvements. The CPFC’s bylaws and other key documents are available at on the City’s online records.
At the end of 2023, it was brought to staff’s attention that the CPFC had lost its tax-exempt status due to a lapse in ann ual reporting. In response, the City contracted with external legal counsel to address the compliance issues and apply for reinstatement. Th e application was submitted to the IRS in December, and CPFC’s tax -exempt status has since been successfully reinstated. The City is currently completing the required Form 990 filings and is pursuing an exemption from future Form 990 filing requirements.
Over the past year, staff has issued three memoranda providing background on the CPFC formation, updates on the tax-exempt status, and responses to questions from the CPFC Board members. These memoranda can be fo und at https://www.cupertino.org/our- city/city-council/council-informational-memos.
Meeting Schedule and Board Actions
The CPFC Board has not convened regularly since 2020, likely due to a lack of agenda items requiring board action. To ensure compliance with CP FC bylaws and City resolutions, staff has scheduled this meeting and incorporated an annual meeting into the November schedule. Per resolution, meetings are to take place on the third Monday in November.
At this time, staff does not anticipate the C PFC will issue or refinance any existing debt , and there is only one item requiring Board action: the approval of minutes from the 2020 meeting. Moving forward, staff will either adhere to the current bylaws by holding annual 16 CPFC 02-03-2026 Searchable Packet
16 of 30
meetings or explore options to amend the bylaws to allow meetings only when necessary, per the Board's direction.
Nest Steps
Staff will continue to monitor compliance and provide updates as necessary. Staff is also working towards completing the Form 990 filings and obtaining an exemption from future filing requirements.
Sustainability Impact
No sustainability impact.
Fiscal Impact
Any additional expenditures needed to come into compliance will be assumed within existing budget appropriations.
California Environmental Quality Act
Not applicable.
_____________________________________
Prepared by: Jonathan Orozco, Finance Manager
Reviewed by: Kristina Alfaro, Director of Administrative Services Christopher D. Jensen, City Attorney
Approved for Submission by: Tina Kapoor, Acting City Manager
17 CPFC 02-03-2026 Searchable Packet
17 of 30
ADMINISTRATIVE SERVICES DEPARTMENT
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
TELEPHONE: (408) 777-3220
CUPERTINO.GOV
MANAGEMENT REPORT
November 17, 2025
To: Cupertino Public Facilities Corporation
From: Kristina Alfaro, Director of Administrative Services
Re: Annual Update
Background
The Cupertino Public Facilities Corporation (CPFC) was incorporated in 1986 as a vehicle to provide financing for public improvements. The CPFC’s bylaws and other key documents are available through the City’s online records archives.
New Corporation Activity
The Corporation has had no new financial activity during calendar year 2025. No new issuances or refinancing actions were initiated. The Corporation continues to exist solely to support the 2020 Certificates of Participation (COPs) for the City’s Civic Center improvements.
Staff continues to perform administrative functions, including preparation of IRS filings, board reports, and coordination with bond counsel.
IRS Tax-Exempt Status and Reporting
In 2023, the City identified that the Corporation had not filed IRS Form 990 for several years, which resulted in the revocation of its federal tax-exempt status. In 2024, the City engaged bond and tax counsel, Stradling Yocca Carlson & Rauth LLP, to assist with the reinstatement process.
As a result:
• The Corporation’s tax-exempt status was successfully reinstated in early 2024. • The 2023–24 IRS Form 990 was filed in November 2024.
• The 2024–25 IRS Form 990 filed by the due date of November 17, 2025.
Total costs paid to Stradling for reinstatement efforts were $10,518.50. While the Corporation’s tax-exempt status has been restored, the IRS did not grant a filing exemption. The City has contacted Stradling to explore whether the CPFC may qualify for a future exemption from filing requirements, consistent with other cities that have successfully pursued similar treatment for inactive conduit financing entities.
18 CPFC 02-03-2026 Searchable Packet
18 of 30
2020 CERTIFICATES OF PARTICIPATION – FINANCING SUMMARY
In July 2020, the City issued Certificates of Participation (COPs) via the Corporation to refinance outstanding debt and achieve cost savings. Key details are as follows:
Despite a higher nominal coupon rate, the refinancing achieved a substantially lower true interest cost of 0.848% due to the lender-paid premium and application of the prior debt reserve. This refinancing decision was both strategic and financially advantageous, resulting in significant savings to the City and long-term flexibility
Board Appointments
Article III, Section 2 of the Corporation’s bylaws designates that the City’s Director of Finance (Director of Administrative Services) shall serve as the Treasurer of the Corporation. No appointments are required at this time.
Next Steps
19 CPFC 02-03-2026 Searchable Packet
19 of 30
Staff will continue to work with the City’s legal and tax-exempt bond counsel, Stradling Yocca Carlson & Rauth LLP, to explore options related to filing exemptions and the Corporation’s ongoing compliance requirements. Any material updates or developments will be presented to the Board at a future meeting or through a written update, as appropriate.
Sustainability Impact
No sustainability impact.
Fiscal Impact
Any additional expenditures needed to come into compliance will be assumed within existing budget appropriations.
California Environmental Quality Act
Not applicable.
_____________________________________
Prepared by: Jonathan Orozco, Finance Manager
Reviewed by: Kristina Alfaro, Director of Administrative Services Approved for Submission by: Tina Kapoor, Interim City Manager 20 CPFC 02-03-2026 Searchable Packet
20 of 30
CITY COUNCIL INFORMATIONAL MEMORANDUM
December 6, 2023
To: Cu pertino City Council
From: Kristina Alfaro, Director of Administrative Services
Re: Cupertino Public Facilities Corporation Questions
Background
The Cupertino Public Facilities Corporation (CPFC) was established on June 2, 1986 as tax-exempt corporation under Internal Revenue Code section 501(c)(4) to issue debt on behalf of the City.
The City of Cupertino, City Council acts as the CPFC’s board of directors. Following Resolution 12-01, the Mayor, Vice Mayor, and City Clerk are automatically seated as the President, Vice President, and Secretary of the Board, respectively. CPFC’s bylaws assigns the City’s Director of Administrative Services as the Treasurer.
The board has met on 11 occasions since its establishment, with one meeting cancellation for lack of business, on the following dates:
1. June 2, 1986 – Passed Articles of Incorporation (Attachment A), Bylaws (Attachment B), Elected Officers, set date and meeting time of regular meetings and authorized filing of exemptions to the State Franchise Tax Board and various Federal Forms and issued Certificates of Participation (COP). COP is a municipal financing tool used to generate funds to acquire real property or to construct or improve public facilities. COP use a tax-exempt lease-financing agreement, where the investors are paid via lease revenues generated from the property. Per California State law, properly structured COP are not debt and therefore do not require voter approval.
2. July 20, 1987 – Elected officers, set date and meeting time of regular meetings to the second Tuesday in November at seven o’clock p.m.
3. November 16, 1987 – Elected Officers and set new date and meeting time of regular meetings to the third Monday in November at seven o’clock p.m. (Attachment C)
21 CPFC 02-03-2026 Searchable Packet
21 of 30
4. February 16, 1988 – Authorized execution of grant of easement to Pacific Gas and Electric Company
5. March 1, 1993 – Refinancing of Certificates of Participation
6. September 16, 2002 – Issuing Certificates of Participation
7. April 17, 2012 – Adopted resolution 12-01 appointing Cupertino City Council members as Board of Directors of the Public Facilities Corporation and approved refinancing of certificates of participation.
8. October 6, 2015 – Cancelled due to lack of business.
9. January 19, 2016 -- Approved the City entering into Antenna Ground Lease Agreement with GTE Mobilnet of California
10. July 5, 2017 – Approved the City to entering into Antenna Ground Lease Agreement with New Cingular Wireless
11. September 15, 2020 – Refinancing of Certificates of Participation
12. October 6, 2020 – Approved the minutes of the September 15, 2020 meeting.
Public Facilities Corporation bylaws and Articles of Incorporation At the corporation’s first meeting in 1986, its Bylaws were adopted, these Bylaws set forth the provisions which the corporation operates under, including but not limited to the election of directions, regular meetings, objects and purpose of the corporation, and general provisions.
In addition, the corporation adopted its Articles of Incorporation, which state the purpose for which the corporation was formed.
Lasty, the corporation authorized filings with both the State and Federal governments for recognition as a 501(c)(4) tax-exempt corporation.
Debt Issued and Reporting Requirements
The corporation has authorized debt issuance on the following occasions, with the most recent issuance in 2020, a refinancing of the 2012 Certificates of Participation. The refinancing resulted in annual savings of approximately half a million dollars for the remaining 10 years of the debt. Additional details can be found in the Fiscal Year 2020-21 Mid-Year Report (Attachment J) and Debt Schedules (Attachment K).
Debt Issuance Date Certificates of Participation for: Debt Principal Amount
July 16, 1986 1986 Series A for City Hall and Library $9,800,000 July 11, 1989 Wilson Park Project $5,000
April 2, 1990 Memorial Park Expansion Project (for the Sports Center Acquisition)
$9,070,000
22 CPFC 02-03-2026 Searchable Packet
22 of 30
Debt Issuance Date Certificates of Participation for: Debt Principal Amount
March 14, 1991 Blackberry Farm and Fremont Older Elementary School Site (now Creekside Park)
$32,970,000
November 24, 1992 Refunding of Series A City Hall and Library Projects
$10,785,000
November 24, 1992 Refunds the 1989 Wilson Park and 1990 Memorial Park
$14,585,000
March 22, 1993 Refunding Series A Blackberry Farm and
Fremont Older projects
$36,600,000
October 1, 2002 Refunds the Series A and Series B and issues and provides funding for the new library
$56,640,000
April 19, 2012 Refinance the Oct 1 2002 debt at a lower interest rate
$43,940,000
September 29, 2020 Refinance the 2012 at a lower interest rate $22,040,000
There are regulatory reports and actions to maintain the 501(c)(4) status along with debt reporting and compliance requirements. Those requirements and the City’s current status is shown in the table below:
Requirement Activity Status
Internal Revenue Service-
Annual Federal
Reporting (Form 990)
Regulatory
Reporting
Outside counsel unsuccessfully attempted
to exempt CPFC from filing in 2016
(Attachment I). The Corporation is
currently working with subject matter
experts to reestablish 501(c)(4) and will
begin Form 990 filing shortly afterward.
Franchise Tax Board-
Annual State Filing
(Form 199)
Regulatory
Reporting
The corporation stopped filing after 2001
when it was determined that the
corporation was exempt from filing.
State Controller’s Office –
Annual Transaction
Report (Attachment D)
Regulatory
Reporting
Independent external auditors have
continued to prepare and submit reports
with City staff review.
Secretary of State –
Statement of Information
(Attachment G)
Regulatory
Reporting
The City maintains its state tax-exempt
status and will file the Statement
biannually in June on even years.
Annual Meeting of the
Board of Directors
Corporate
Compliance
Staff is tentatively proposing future
meetings occur in November.
23 CPFC 02-03-2026 Searchable Packet
23 of 30
Insurance Coverage
(Attachment H)
Debt Issuance
Compliance
The City has continued to maintain the
minimum general liability and rental
interruption coverage.
Bank New York Mellon
(BNYM) -Statement of
the City
Debt Issuance
Reporting
The City has provided BNYM current
Statement and supplement documents.
Conclusion
The City is in compliance with all State filings and debt issuance requirements.
The lapse of annual federal reporting (Form 990) has resulted in the revocation of CPFC’s 501(c)(4) status. There is no material impact on the City’s debt issuance due to a lapse in reporting as the City has not received a disbursement from the debt since 2002 when additional debt was issued for the Library and Community Hall. In addition, the Corporation has not met regularly as prescribed by the Bylaws. Based on the most recent Resolution on meeting dates, City staff will schedule an annual meeting on the third Monday in November, or November 18, 2024.
Next Steps
City staff is working with subject matter experts to regain CPFC’s 501(c)(4) status and bring into federal reporting compliance. Expected completion for filing is early next calendar year. Staff will update City Council once CPFC has regained 501(c)(4) status.
Following reacquiring 501(c)(4) status and Form 990 fillings, staff will work with subject matter experts to reattempt exempting CPFC from filing Form 990 in future years.
Staff is drafting internal reporting procedures to ensure that reporting and annual meetings are not missed in the future. For debt issuance, the City will continue to work with UFI Inc. to ensure the required annual reporting is met.
Sustainability Impact
No sustainability impact.
Fiscal Impact
Any additional expenditures needed to come into compliance will be assumed within existing budget appropriations.
_____________________________________
Prepared by: Jonathan Orozco, Finance Manager
Reviewed by: Kristina Alfaro, Director of Administrative Services 24 CPFC 02-03-2026 Searchable Packet
24 of 30
Matt Morely, Assistant City Manager
Approved for Submission by: Pamela Wu, City Manager
Attachments:
A – Cupertino Public Facilities Corporation Articles of Incorporation B—Cupertino Public Facilities Corporation Bylaws
C – Cupertino Public Facilities Corporation Resolution 87-4 Appointing Time and Meeting Place of Regular Meetings
D – Financial Transactions Report FY2021-22
E – Cupertino Public Facilities Corporation all other resolutions F – Cupertino Public Facilities Corporation Minutes
G – Cupertino Public Facilities Corporation Entity Status Letter H – Cupertino Public Facilities Corporation Insurance and Appropriations Compliance I –Form 990 Exemption Request Submittal
J – Fiscal Year 2020-21 Mid-Year Financial Report
K – Debt Schedules
25 CPFC 02-03-2026 Searchable Packet
25 of 30
Date: April 8, 2024
To: Cupertino City Council
From: Kristina Alfaro, Director of Administrative Services Cc: Pamela Wu, City Manager,
Chris Jensen, City Attorney,
Matt Morely, Assistant City Manager and
Jonathan Orozco, Finance Manager
Re: Update on Cupertino Public Facilities Corporation (CPFC) Background
As part of the March 5th and April 3, 2024, meetings the following questions were asked by Council regarding the Cupertino Public Facilities Corporation.
1. Can we get an update for when our annual Board of Directors meeting is planned? And an update on the resumption of tax-exempt status and timeline? Staff response: Under the Cupertino Public Facilities Corporation Bylaws sections 6 Regular and Organizational Meetings “Regular meetings of the Board of Directors shall be held at such time as the Board may fix by resolution from time to time;” Resolution 87-4 set the meeting date as the third Monday in November of each year. City staff has scheduled the meeting for November 18, 2024.
The City's external legal counsel submitted an application requesting the reinstatement of Cupertino Public Facilities Corporation's (CPFC) 501(c)(4) status in December. Subsequently, staff has received confirmation from the IRS acknowledging the receipt of the application. A determination letter has not been issued.
2. Since we are apparently the Board, what is our ability to call a meeting? Staff response: Bylaws section 7 Special Meetings “Special meetings of the Board of Directors shall be called, noticed and held in accordance with the provisions of Section 54956 of the Brown Act.” Section 54956 of the Brown Act reads as follows, “(a) A special meeting may be called at 26 CPFC 02-03-2026 Searchable Packet
26 of 30
any time by the presiding officer of the legislative body of a local agency, or by a majority of the members of the legislative body....”
27 CPFC 02-03-2026 Searchable Packet
27 of 30
CITY COUNCIL INFORMATIONAL MEMORANDUM
April 4, 2024
To: Cupertino City Council
From: Kristina Alfaro, Director of Administrative Services
Re: Cupertino Public Facilities Corporation Update
The City's external legal counsel submitted an application requesting the reinstatement of Cupertino Public Facilities Corporation's (CPFC) 501(c)(4) status in December.
Subsequently, staff has received confirmation from the IRS acknowledging the receipt of the application. However, as of yet, a determination letter has not been issued.
Once CPFC's 501(c)(4) status is reinstated and Form 990 filings are completed, staff will work towards exemptions from future CPFC Form 990 filings. Additionally, staff has included the required annual board meeting in the November schedule, per CPFC Resolution No. 87-4.
Staff will continue to monitor the progress closely and keep the City Council updated on any developments.
_____________________________________
Prepared by: Jonathan Orozco, Finance Manager
Reviewed by: Kristina Alfaro, Director of Administrative Services Matt Morley, Assistant City Manager
Approved for Submission by: Pamela Wu, City Manager
28 CPFC 02-03-2026 Searchable Packet
28 of 30
Letter 948 (Rev. 3-2020)
Catalog Number 35151E
Department of the Treasury
Internal Revenue Service
Tax Exempt and Government Entities
P.O. Box 2508
Cincinnati, OH 45201
CUPERTINO PUBLIC FACILITIES CORPORATION
10300 TORRE AVENUE
CUPERTINO, CA 95014-3202
Date:
07/03/2024
Employer ID number:
77-0131682
Person to contact:
Name: Jeremiah John
ID number: 86004
Telephone: 877-829-5500
Accounting period ending:
June 30
Form 990/990-EZ/990-N required:
Yes
Effective date of exemption:
December 20,2023
Contribution deductibility:
No
Addendum applies:
No
DLN:
26053756006503
Dear Applicant:
We're pleased to tell you we determined you're exempt from federal income tax under Internal Revenue Code (IRC) Section 501(c)(4). This letter could help resolve questions on your exempt status.
Please keep it for your records.
Donors cannot deduct contributions they make to you under IRC Section 170(c)(2).
Based on the information you submitted with your application, we approved your request for reinstatement under Revenue Procedure 2014-11. Your effective date of exemption, as listed at the top of this letter, is retroactive to your date of revocation.
If we indicated at the top of this letter that you're required to file Form 990/990-EZ/990-N, our records show you're required to file an annual information return (Form 990 or Form 990-EZ) or electronic notice (Form 990-N, the e-Postcard). If you don't file a required return or notice for three consecutive years, your exempt status will be automatically revoked.
If we indicated at the top of this letter that an addendum applies, the enclosed addendum is an integral part of this letter.
29 CPFC 02-03-2026 Searchable Packet
29 of 30
Letter 948 (Rev. 3-2020)
Catalog Number 35151E
For important information about your responsibilities as a tax-exempt organization, go to www.irs.gov/charities.
Enter "4221-NC" in the search bar to view Publication 4221-NC, Compliance Guide for Tax-Exempt Organizations (Other than 501(c)(3) Public Charities and Private Foundations), which describes your recordkeeping, reporting, and disclosure requirements.
Sincerely,
Stephen A. Martin
Director, Exempt Organizations
Rulings and Agreements
30 CPFC 02-03-2026 Searchable Packet
30 of 30