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

“Operation and Maintenance Expenses” are defined in the 1991 Master Resolution to include all expenses
of the Commission incurred for the operation and maintenance of the Airport, as determined in accordance with
generally accepted accounting principles. Operation and Maintenance Expenses do not include: (a) the principal of,
premium, if any, or interest on the Bonds; (b) any allowance for depreciation of the Airport; (c) any expense which
is or will be paid or reimbursed from any source that is not Revenues; (d) any extraordinary items arising from the
early extinguishment of debt; (e) Annual Service Payments; (f) any costs for capital additions, replacements or
improvements to the Airport which, under generally accepted accounting principles, are properly chargeable to a
capital account or reserve for depreciation; and (g) any losses from the sale, abandonment or other disposition of any
Airport properties.
The 2010A Bonds are special obligations of the Commission, payable as to principal (but not
Purchase Price) and interest, solely out of, and secured by a pledge of and lien on, the Net Revenues of the
Airport and the funds and accounts provided for in the 1991 Master Resolution. Neither the credit nor
taxing power of the City and County of San Francisco, the State of California or any political subdivision
thereof is pledged to the payment of the principal or Purchase Price of or interest on the 2010A Bonds. No
owner of a 2010A Bond shall have the right to compel the exercise of the taxing power of the City and County
of San Francisco, the State of California or any political subdivision thereof to pay the principal or Purchase
Price of the 2010A Bonds or the interest thereon. The Commission has no taxing power whatsoever.
Pursuant to Section 5450 of the California Government Code, the pledge of, lien on and security interest in
Net Revenues and certain other funds granted by the 1991 Master Resolution is valid and binding in accordance
with the terms thereof from the time of issuance of the 2010A Bonds; the Net Revenues and such other funds shall
be immediately subject to such pledge; and such pledge shall constitute a lien and security interest which shall
immediately attach to such Net Revenues and other funds and shall be effective, binding and enforceable against the
Commission, its successors, creditors, and all others asserting rights therein to the extent set forth and in accordance
with the terms of the 1991 Master Resolution irrespective of whether those parties have notice of such pledge and
without the need for any physical delivery, recordation, filing or other further act. Such pledge, lien and security
interest are not subject to the provisions of Article 9 of the California Uniform Commercial Code.
The term “Revenues” as defined in the 1991 Master Resolution does not include any passenger facility
charge (“PFC”) or similar charge levied by or on behalf of the Commission against passengers, unless all or a
portion thereof are designated as such by the Commission by resolution. In 2001, the Commission first received
approval from the Federal Aviation Administration (“FAA”) to collect and use a PFC in an amount not to exceed at
any time $4.50 per enplaning passenger through January 1, 2004 (as extended). Pursuant to a second application,
the Commission’s authorization to collect a PFC was extended to November 1, 2008 to finance certain eligible
projects. The Commission received approval from the FAA of a third PFC application, as amended, extending the
PFC collection period through January 1, 2017. For additional information regarding the PFC, see “AIRPORT’S
FINANCIAL AND RELATED INFORMATION–Passenger Facility Charge.”
The amounts of PFC collections designated as “Revenues” under the 1991 Master Resolution and applied
to pay debt service on the Bonds since Fiscal Year 2002-03 are described under “AIRPORT’S FINANCIAL AND
RELATED INFORMATION–Passenger Facility Charge.” The Commission expects to continue to designate a portion of
PFCs as Revenues in each Fiscal Year during which such PFC collections are collected and authorized to be applied
to pay debt service on Bonds. See “AIRPORT’S FINANCIAL AND RELATED INFORMATION–Passenger Facility
Charge.”
The payment of the principal portion of the Purchase Price of the 2010A Bonds is not secured by a pledge
or lien on Net Revenues.
Rate Covenant
The Commission has covenanted that it shall establish and at all times maintain rates, rentals, charges and
fees for the use of the Airport and for services rendered by the Commission so that:
(a) Net Revenues in each Fiscal Year will be at least sufficient (i) to make all required debt service
payments and deposits in such Fiscal Year with respect to the Bonds, any Subordinate Bonds and any general
obligation bonds issued by the City for the benefit of the Airport, and (ii) to make all payments required to be made
to the City; and
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