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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Mid-Year Adjustment <strong>of</strong> Terminal Rentals <strong>and</strong> L<strong>and</strong>ing Fees. The <strong>Commission</strong> may also increase terminal<br />
rental rates <strong>and</strong>/or l<strong>and</strong>ing fees at any time during the Fiscal Year if the actual expenses (including debt service) in<br />
one or more applicable cost centers are projected to exceed by 10% or more the actual revenues from such cost<br />
center. Prior to increasing terminal rental rates <strong>and</strong>/or l<strong>and</strong>ing fees, as applicable, the <strong>Commission</strong> must use its best<br />
efforts to reduce expenses <strong>and</strong> to satisfy any remaining deficit from other available funds. The <strong>Commission</strong> is also<br />
required to provide 60 days’ notice to, <strong>and</strong> consult with, the Signatory Airlines. The Signatory Airlines are required<br />
under the Lease Agreements to pay such increased terminal rentals <strong>and</strong>/or l<strong>and</strong>ing fees for the remaining months <strong>of</strong><br />
the then-current Fiscal Year. The last time a mid-year adjustment was made was in Fiscal Year 2000-01.<br />
L<strong>and</strong>ing Fees. L<strong>and</strong>ing fees, consisting <strong>of</strong> minimum fees for fixed-wing <strong>and</strong> rotary aircraft <strong>and</strong> a rate based<br />
on l<strong>and</strong>ed weight, are imposed primarily with respect to Airfield Area <strong>and</strong> <strong>Airport</strong> Support Area net costs. Each<br />
Signatory Airline <strong>and</strong> other airlines <strong>and</strong> airfield users are required to pay l<strong>and</strong>ing fees, the principal component <strong>of</strong><br />
which is based upon l<strong>and</strong>ed weight, that are established by the <strong>Commission</strong> to fully recover all Airfield <strong>and</strong> <strong>Airport</strong><br />
Support Area net costs. However, if a Signatory Airline were to cease or substantially reduce its operations at the<br />
<strong>Airport</strong>, it would still remain liable for certain terminal rentals (with respect to Terminal Area <strong>and</strong> Groundside Area<br />
net costs), calculated each year on a residual basis as provided in the Lease Agreements. Any shortfall in l<strong>and</strong>ing<br />
fees payable to the <strong>Commission</strong> by the Signatory Airlines <strong>and</strong> other airlines <strong>and</strong> airfield users in any Fiscal Year as a<br />
result <strong>of</strong> actual l<strong>and</strong>ed weights being less than those projected would be made up either from a mid-year rate<br />
adjustment, or from adjustments to l<strong>and</strong>ing fee rates in the succeeding Fiscal Years pursuant to the formulas set forth<br />
in the Lease Agreements.<br />
Airline Review <strong>of</strong> Capital Improvements. Under the Lease Agreements, the <strong>Commission</strong> agrees, subject to<br />
the limited exception described below, to use its best efforts to finance all capital improvements through the<br />
issuance <strong>of</strong> <strong>Airport</strong> revenue bonds. A “capital improvement” is defined as any item <strong>of</strong> expenditure with a cost<br />
(including design <strong>and</strong> planning costs) exceeding $100,000 in 1981 dollars ($212,005 in 2010 dollars based on the<br />
Implicit Price Deflator, <strong>and</strong> approximately $241,239 in 2010 dollars based on the Consumer Price Index) <strong>and</strong> a<br />
useful life <strong>of</strong> more than three years. Proposed capital improvements with a cost in excess <strong>of</strong> $300,000 in 1981<br />
dollars ($636,016 in 2010 dollars based on the Implicit Price Deflator, <strong>and</strong> $723,718 in 2010 dollars based on the<br />
Consumer Price Index) are subject to certain review procedures established under the Lease Agreements. A<br />
Majority-In-Interest <strong>of</strong> the Signatory Airlines (defined as more than 50% <strong>of</strong> the Signatory Airlines, which on the<br />
date <strong>of</strong> calculation represent more than 50% <strong>of</strong> the l<strong>and</strong>ed weight <strong>of</strong> such Signatory Airlines during the immediately<br />
preceding Fiscal Year) may require the <strong>Commission</strong> to defer a proposed capital improvement for up to six months in<br />
order for the airlines to present their views with respect to such capital improvement, after which time the<br />
<strong>Commission</strong> may proceed with the capital improvement.<br />
Additionally, the <strong>Airport</strong> may annually budget <strong>and</strong> spend without airline approval up to $2,000,000 in<br />
1981 dollars ($4,240,105 in 2010 dollars based on the Implicit Price Deflator, <strong>and</strong> $4,824,786 in 2010 dollars based<br />
on the Consumer Price Index) or a greater amount approved by a Majority-In-Interest, from current revenues for<br />
capital improvements. Also, capital improvements that are required by (i) a federal or state agency having<br />
jurisdiction over <strong>Airport</strong> operations, or (ii) an emergency which, if the improvements are not made, would result in<br />
the closing <strong>of</strong> the <strong>Airport</strong> within 48 hours, are not subject to the airline review procedures.<br />
ITC Joint Use Space. Under the Original Agreements, the <strong>Commission</strong> can require the Signatory Airlines<br />
to make a limited accommodation <strong>of</strong> new air carriers in the domestic terminals. Subject to a written agreement<br />
between the Signatory Airline <strong>and</strong> the new air carrier, each Signatory Airline must make its passenger holdrooms<br />
<strong>and</strong> loading bridges available on a temporary basis, when such facilities are not needed for the Signatory Airline’s<br />
own operations or those <strong>of</strong> its sublessees, to permit the new air carrier to load <strong>and</strong> unload passengers on scheduled<br />
flights. With respect to the ITC, the Amended Agreements provide that all ITC gates, holdrooms, ticket counters<br />
<strong>and</strong> baggage systems are to be used on a joint use basis in accordance with management protocols which allocate the<br />
facilities for use among the various airlines according to need during the day. This arrangement facilitates the<br />
efficient use <strong>of</strong> the ITC facilities <strong>and</strong> enables the <strong>Airport</strong> to easily accommodate new domestic or international<br />
carriers or other market changes within the industry.<br />
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