Official Statement Airport Commission City and County of San ...
Official Statement Airport Commission City and County of San ...
Official Statement Airport Commission City and County of San ...
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(b) Net Revenues, together with any Transfer from the Contingency Account to the Revenues<br />
Account, in each Fiscal Year will be at least equal to 125% <strong>of</strong> aggregate Annual Debt Service with respect to the<br />
Bonds for such Fiscal Year. See “–Contingency Account.”<br />
In the event that Net Revenues for any Fiscal Year are less than the amount specified in clause (b) above,<br />
but the <strong>Commission</strong> has promptly taken all lawful measures to revise its schedule <strong>of</strong> rentals, rates, fees <strong>and</strong> charges<br />
as necessary to increase Net Revenues, together with any Transfer, to the amount specified, such deficiency will not<br />
constitute an Event <strong>of</strong> Default under the 1991 Master Resolution. Nevertheless, if, after taking such measures, Net<br />
Revenues in the next succeeding Fiscal Year are less than the amount specified in clause (b) above, such deficiency<br />
in Net Revenues will constitute an Event <strong>of</strong> Default under the 1991 Master Resolution. See APPENDIX C–<br />
“SUMMARY OF CERTAIN PROVISIONS OF THE 1991 MASTER RESOLUTION–Certain Covenants–Rate Covenant.”<br />
The term “Net Revenues” is defined in the 1991 Master Resolution as Revenues less Operation <strong>and</strong><br />
Maintenance Expenses. Operation <strong>and</strong> Maintenance Expenses are defined to exclude, among other things, “any<br />
expense for which, or to the extent to which, the <strong>Commission</strong> is or will be paid or reimbursed from or through any<br />
source that is not included or includable as Revenues.”<br />
Contingency Account<br />
The 1991 Master Resolution creates a Contingency Account within the <strong>Airport</strong> Revenue Fund held by the<br />
Treasurer <strong>of</strong> the <strong>City</strong>. Moneys in the Contingency Account may be applied upon the direction <strong>of</strong> the <strong>Commission</strong> to<br />
the payment <strong>of</strong> principal, interest, purchase price or premium payments on the Bonds, payment <strong>of</strong> Operation <strong>and</strong><br />
Maintenance Expenses, <strong>and</strong> payment <strong>of</strong> costs related to any additions, improvements, repairs, renewals or<br />
replacements to the <strong>Airport</strong>, in each case only if <strong>and</strong> to the extent that moneys otherwise available to make such<br />
payments are insufficient therefor.<br />
As <strong>of</strong> January 15, 2010, the balance in the Contingency Account available for transfer, as described below,<br />
was not less than $92.7 million, which was equal to approximately 24.8% <strong>of</strong> Maximum Annual Debt Service on the<br />
Bonds as <strong>of</strong> that date.<br />
Moneys in the Contingency Account are deposited in the Revenues Account as <strong>of</strong> the last Business Day <strong>of</strong><br />
each Fiscal Year, <strong>and</strong> thereby applied to satisfy the coverage requirement under the rate covenant contained in the<br />
1991 Master Resolution, unless <strong>and</strong> to the extent the <strong>Commission</strong> shall otherwise direct. See “SECURITY FOR THE<br />
2010A BONDS–Rate Covenant.” On the first Business Day <strong>of</strong> the following Fiscal Year, the deposited amount (or<br />
such lesser amount if the <strong>Commission</strong> so determines) is deposited back into the Contingency Account from the<br />
Revenues Account. The <strong>Commission</strong> is not obligated to replenish the Contingency Account in the event amounts<br />
are withdrawn therefrom.<br />
If the <strong>Commission</strong> withdraws funds from the Contingency Account for any purpose during any Fiscal Year<br />
<strong>and</strong> does not replenish the amounts withdrawn, such failure to replenish the Contingency Account may have an<br />
adverse effect on the calculation <strong>of</strong> debt service coverage for such Fiscal Year <strong>and</strong> subsequent Fiscal Years pursuant<br />
to the rate covenant in the 1991 Master Resolution.<br />
Flow <strong>of</strong> Funds<br />
The application <strong>of</strong> Revenues <strong>of</strong> the <strong>Airport</strong> is governed by relevant provisions <strong>of</strong> the Charter <strong>and</strong> <strong>of</strong> the<br />
1991 Master Resolution. Under the Charter, the gross revenue <strong>of</strong> the <strong>Commission</strong> is to be deposited in a special<br />
fund in the <strong>City</strong> Treasury designated as the “<strong>Airport</strong> Revenue Fund.” These moneys are required to be held separate<br />
<strong>and</strong> apart from all other funds <strong>of</strong> the <strong>City</strong> <strong>and</strong> are required to be applied as follows:<br />
First, to pay <strong>Airport</strong> Operation <strong>and</strong> Maintenance Expenses;<br />
Second, to make required payments to pension <strong>and</strong> compensation funds <strong>and</strong> reserves therefor;<br />
Third, to pay the principal <strong>of</strong>, interest on, <strong>and</strong> other required payments to secure revenue bonds;<br />
Fourth, to pay principal <strong>of</strong> <strong>and</strong> interest on general obligation bonds <strong>of</strong> the <strong>City</strong> issued for <strong>Airport</strong> purposes<br />
(there are no general obligation bonds outst<strong>and</strong>ing for <strong>Airport</strong> purposes);<br />
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