Official Statement Airport Commission City and County of San ...

Rate Covenant
The Commission has covenanted that it will establish and at all times maintain rentals, rates, fees and
charges for the use of the Airport and for the services rendered by the Commission in connection with the Airport so
that:
(a) Net Revenues in each Fiscal Year will be at least sufficient (i) to make all required
payments and deposits into the Revenue Bond Account and the General Obligation Bond
Account pursuant to the 1991 Master Resolution, and (ii) to make the Annual Service
Payment to the City; and
(b) Net Revenues, together with any Transfer, in each Fiscal Year will be at least equal to
125% of aggregate Annual Debt Service with respect to the Bonds for such Fiscal Year.
The Commission covenants in the 1991 Master Resolution that if Net Revenues, together with any
Transfer, in any Fiscal Year are less than the amount specified in clause (b) above, the Commission will retain and
direct an Airport Consultant to make recommendations as to the revision of the Commission’s business operations
and its schedule of rentals, rates, fees and charges for the use of the Airport and for services rendered by the
Commission in connection with the Airport, and after receiving such recommendations or giving reasonable
opportunity for such recommendations to be made the Commission will take all lawful measures to revise the
schedule of rentals, rates, fees and charges as may be necessary to produce Net Revenues, together with any
Transfer, in the amount specified in clause (b) above in the next succeeding Fiscal Year.
In the event that Net Revenues for any Fiscal Year are less than the amount specified in clause (b)
above, but the Commission has promptly taken all lawful measures to revise its schedule of rentals, rates, fees and
charges, such deficiency will not constitute an Event of Default under the 1991 Master Resolution. Nevertheless, if
after taking such measures, Net Revenues in the next succeeding Fiscal Year are less than the amount specified in
clause (b) above, such deficiency in Net Revenues will constitute an Event of Default under the 1991 Master
Resolution.
Operation and Maintenance of the Airport
The Commission has covenanted that it will operate and maintain the Airport as a revenue producing
enterprise in accordance with the Act. The Commission will make such repairs to the Airport as are necessary or
appropriate in the prudent management thereof. The Commission has also covenanted that it will operate and maintain
the Airport in a manner which will entitle it at all times to charge and collect fees, charges and rentals in accordance
with Airport use agreements, if any, or as otherwise permitted by law, and the Commission will take all reasonable
measures permitted by law to enforce prompt payment to it of such fees, charges and rentals when and as due. The
Commission will, from time to time, duly pay and discharge, or cause to be paid and discharged, any taxes,
assessments or other governmental charges lawfully imposed upon the Airport or upon any part thereof, or upon the
revenues from the operation thereof, when the same become due, as well as any lawful claim for labor, materials or
supplies which, if unpaid, might by law become a lien or charge upon the Airport or such revenues, or which might
impair the security of the Bonds. Notwithstanding the foregoing, the Commission need not pay or discharge any tax,
assessment or other governmental charge or claim for labor, materials or supplies, if and so long as the Commission
contests the validity or application thereof in good faith. The Commission will continuously operate the Airport so that
all lawful orders of the FAA and any other governmental agency or authority having jurisdiction in the premises will be
complied with, but the Commission is not required to comply with any such orders so long as the validity or application
thereof is being contested in good faith.
Maintenance of Powers; Retention of Assets
The Commission has covenanted that it will use its best efforts to keep the Airport open for landings
and takeoffs of commercial aircraft using facilities similar to those at the Airport and to maintain the powers, functions,
duties and obligations now reposed in it pursuant to law, and will not at any time voluntarily do, suffer or permit any
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