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

act or thing the effect of which would be to hinder, delay or imperil either the payment of the indebtedness evidenced
by any of the Bonds or any other obligation secured by the 1991 Master Resolution or the performance or observance
of any of the covenants contained therein. The Commission has also covenanted that it will not dispose of assets
necessary to operate the Airport in the manner and at the levels of activity required to enable it to perform its covenants
contained in the 1991 Master Resolution.
Insurance
Subject in each case to the condition that insurance is obtainable at reasonable rates from responsible
insurers and upon reasonable terms and conditions:
(a) The Commission will procure or provide and maintain, at all times while any of the Bonds
shall be outstanding, insurance or qualified self-insurance on the Airport against such risks
as are usually insured by other major airports. Such insurance or qualified self-insurance
shall be in an adequate amount as to the risk insured against as determined by the
Commission. The Commission is not required to carry insurance or qualified self-insurance
against losses caused by land movement, including but not limited to seismic activity.
(b) Any qualified self-insurance must be established in accordance with applicable law; must
include reserves or reinsurance in amounts which the Commission determines to be
adequate to protect against risks assumed under such qualified self-insurance, including
without limitation any potential retained liability in the event of the termination of such
qualified self-insurance; and must be reviewed at least once every 12 months by an
insurance consultant who will deliver to the Commission a report on the adequacy of the
reserves established or reinsurance provided thereunder. If the insurance consultant
determines that such reserves or reinsurance are inadequate, it will make a recommendation
as to the amount of reserves or reinsurance that should be established and maintained, and
the Commission will comply with such recommendation unless it can establish to the
satisfaction of, and receive a certification from, the insurance consultant that a lower
amount is reasonable to provide adequate protection to the Airport and the Commission.
(c) The Commission will secure and maintain adequate fidelity insurance or bonds on all
officers and employees handling or responsible for funds of the Commission, except to the
extent that such insurance is provided by the City.
(d) Within 120 days after the close of each Fiscal Year, the Commission will file with the
Trustee a certificate containing a summary of all insurance policies and qualified selfinsurance
then in effect with respect to the Airport and the Commission.
(e) The proceeds of any insurance on the Airport will be applied solely for Airport purposes.
Financial Records and Statements
The Commission will maintain, or cause to be maintained, proper books and records in which full
and correct entries shall be made in accordance with generally accepted accounting principles, of all its business and
affairs. The Commission will have an annual audit made by an independent auditor and will within 120 days after the
end of each of its Fiscal Years furnish to the Trustee copies of the audited financial statements of the Commission for
such Fiscal Year.
Tax Covenants
The Commission covenants that, if applicable, it will make no use of the proceeds of any Series of
Bonds or take any other action or permit any other action to be taken that would affect adversely the exclusion from
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