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

(b) Net Revenues, together with any Transfer from the Contingency Account to the Revenues
Account, 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. See “–Contingency Account.”
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
as necessary to increase Net Revenues, together with any Transfer, to the amount specified, 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. See APPENDIX C–
“SUMMARY OF CERTAIN PROVISIONS OF THE 1991 MASTER RESOLUTION–Certain Covenants–Rate Covenant.”
The term “Net Revenues” is defined in the 1991 Master Resolution as Revenues less Operation and
Maintenance Expenses. Operation and Maintenance Expenses are defined to exclude, among other things, “any
expense for which, or to the extent to which, the Commission is or will be paid or reimbursed from or through any
source that is not included or includable as Revenues.”
Contingency Account
The 1991 Master Resolution creates a Contingency Account within the Airport Revenue Fund held by the
Treasurer of the City. Moneys in the Contingency Account may be applied upon the direction of the Commission to
the payment of principal, interest, purchase price or premium payments on the Bonds, payment of Operation and
Maintenance Expenses, and payment of costs related to any additions, improvements, repairs, renewals or
replacements to the Airport, in each case only if and to the extent that moneys otherwise available to make such
payments are insufficient therefor.
As of January 15, 2010, the balance in the Contingency Account available for transfer, as described below,
was not less than $92.7 million, which was equal to approximately 24.8% of Maximum Annual Debt Service on the
Bonds as of that date.
Moneys in the Contingency Account are deposited in the Revenues Account as of the last Business Day of
each Fiscal Year, and thereby applied to satisfy the coverage requirement under the rate covenant contained in the
1991 Master Resolution, unless and to the extent the Commission shall otherwise direct. See “SECURITY FOR THE
2010A BONDS–Rate Covenant.” On the first Business Day of the following Fiscal Year, the deposited amount (or
such lesser amount if the Commission so determines) is deposited back into the Contingency Account from the
Revenues Account. The Commission is not obligated to replenish the Contingency Account in the event amounts
are withdrawn therefrom.
If the Commission withdraws funds from the Contingency Account for any purpose during any Fiscal Year
and does not replenish the amounts withdrawn, such failure to replenish the Contingency Account may have an
adverse effect on the calculation of debt service coverage for such Fiscal Year and subsequent Fiscal Years pursuant
to the rate covenant in the 1991 Master Resolution.
Flow of Funds
The application of Revenues of the Airport is governed by relevant provisions of the Charter and of the
1991 Master Resolution. Under the Charter, the gross revenue of the Commission is to be deposited in a special
fund in the City Treasury designated as the “Airport Revenue Fund.” These moneys are required to be held separate
and apart from all other funds of the City and are required to be applied as follows:
First, to pay Airport Operation and Maintenance Expenses;
Second, to make required payments to pension and compensation funds and reserves therefor;
Third, to pay the principal of, interest on, and other required payments to secure revenue bonds;
Fourth, to pay principal of and interest on general obligation bonds of the City issued for Airport purposes
(there are no general obligation bonds outstanding for Airport purposes);
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