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

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Voter Approved Changes to the Retirement Plan. The City’s retirement benefits are established under the Charter and approved directly by the voters, rather than through the regular collective bargaining process; most changes to retirement benefits require a voter-approved Charter amendment. On June 3, 2008, the voters of San Francisco approved Proposition B, which increases the service required for City employees hired after January 10, 2009 to qualify for employer-funded retiree health benefits, establishes a separate Retiree Health Care Trust Fund to fund retiree health costs, and increases retirement benefits and retirement cost-of-living adjustments for “miscellaneous” employees. The cost of Proposition B is incorporated in the actuarial valuation as of July 1, 2008. The voters of San Francisco have recently approved two other retirement plan amendments: • The enactment of a Deferred Retirement Option Plan available to certain police members effective July 1, 2008, authorized by the February 2008 election by initiative proposition; and • A limited cost transfer of 33 Airport police officers’ historical service from CalPERS to SFERS effective July 1, 2009, authorized by the voters of the November 2007 election. Recent Funding Performance. From Fiscal Year 1996-97 through Fiscal Year 2003-04, the City’s contribution to the Retirement System decreased to zero due to lowered funding requirements as determined by the consulting actuary of the Retirement System and adopted by the Retirement Board. The zero percent employer funding requirements for this period were due primarily to higher-than-projected investment earnings and lowerthan-projected wage increases. Beginning in Fiscal Year 2004-05, the Retirement Board reinstated required employer contributions based on the funding requirements as determined by the consulting actuary in the manner described above in “–Funding Practices.” In Fiscal Year 2008-09, total employer contributions to the Retirement System were $119.75 million which was 4.99% of that portion of a member’s Pensionable Salary. The table on the next page summarizes Retirement System actual contributions for Fiscal Years 2004-05 through 2008-09. The column “Market Value of Assets” reflects the fair market value of assets held in trust for payment of pension benefits; the column “Actuarial Value of Assets” refers to the value of assets held in trust adjusted according to the Retirement System’s actuarial methods as summarized above; the column “Pension Benefit Obligation” reflects the accrued actuarial liability of the Retirement System; the column “Percent Funded” column is determined by dividing the actuarial value of assets by the Pension Benefit Obligations; and the column “Employer and Employee Contributions” reflects the total of mandated employee contributions and employer Actuarial Retirement Contributions received by the Retirement System. CITY AND COUNTY OF SAN FRANCISCO EMPLOYEES’ RETIREMENT SYSTEM Fiscal Years 2004-05 through 2008-09 ($ in thousands) Actuarial Pension Employee and Employer Fiscal Market Value Value Benefit Percent Employer Contribution Year of Assets of Assets Obligation Funded Contribution† Rates ___________ † 2004-05 $13,135,263 $12,659,698 $11,765,737 108.0% $248,029 4.48% 2005-06 14,497,022 13,597,646 12,515,463 109.0 289,226 6.58 2006-07 16,952,044 14,929,287 13,541,388 110.0 308,348 6.24 2007-08 15,832,521 15,941,390 15,358,824 103.8 319,183 5.91 2008-09 11,866,729 16,004,730 16,498,649 97.0 312,715 4.99 † Employer Contribution rates for Fiscal Years 2009-10 and 2010-11 are 9.49% and 13.56%, respectively. Sources: Retirement System audited financial statements and supplemental schedules June 30, 2009, 2008, 2007, 2006 and 2005 and Retirement System Actuarial Valuation reports as of July 1, 2005, July 1, 2006, July 1, 2007, July 1, 2008 and July 1, 2009. 82
The employer contribution rate for Fiscal Year 2009-10 is 9.49% of Pensionable Salary. The Airport is required to contribute at an actuarially determined rate. As of July 1, 2009, the date of the last actuarial valuation, the funded ratio for the plan was 97.0%. The Airport’s required contributions for the last five Fiscal Years are set forth below. AIRPORT CONTRIBUTIONS TO THE RETIREMENT SYSTEM Fiscal Year 2004-05 2005-06 2006-07 2007-08 2008-09 Contribution Rate 4.48% 6.58 6.24 5.91 4.99 Airport Contribution $3.6 million 7.4 million 9.1 million 9.1 million 8.8 million __________________ Sources: Retirement System Actuarial Valuation Reports and San Francisco Airport Commission. Asset Management and Actuarial Valuation. The assets of the Retirement System are invested in a broadly diversified manner across the institutional capital markets. In addition to U.S. equities and fixed income securities, the Retirement System holds international equities, global sovereign and corporate debt, global public and private real estate and an array of alternative investments including private equity and venture capital limited partnerships. The Retirement System does not invest directly in subprime mortgage obligations. The investments are regularly reviewed by the Retirement Board and monitored by an internal staff of investment professionals who in turn are advised by external consultants who are specialists in the areas of the investments described above. Information regarding the investment policy of the Retirement System, a description of asset allocation targets, current investments and the Annual Report of the Retirement System are available upon request from the San Francisco City and County Employees’ Retirement System, 30 Van Ness Avenue, Suite 3000, San Francisco, California 94102, or by calling 415-487-7020. Recent Changes in the Economic Environment and the Impact on the Retirement System. The market value of the Retirement System was approximately $11.98 billion as of June 30, 2009. The $3.9 billion difference between the approximately $15.8 billion market value as of June 30, 2008 and the approximately $11.9 billion market value as of June 30, 2009 reflects, among other things, participant and employer contributions, benefit payments and a decline on a time-weighted basis of approximately 22% in the market value of assets held by the Retirement System from June 30, 2008. Despite the Plan’s losses in fiscal year 2009, the Retirement Board and its consulting actuary concur that the Plan remains in a strong financial position to meet its obligations to the Plan participants and beneficiaries. As of December 31, 2009, the Retirement System estimated that the market value of its assets has increased to $13.4 billion. The estimated market value represents, as of the date specified, the estimated value of the Retirement System’s portfolio if it were liquidated on that date. The Retirement System cannot be certain of the value of certain of its portfolio assets and, accordingly, the market value of the portfolio could be more or less. Moreover, appraisals for classes of assets that are not publicly traded are based on estimates which typically lag changes in actual market value by three to six months. The estimated market value of $13.4 billion has not been subject to an independent audit. The Retirement System investment portfolio is structured to focus on long-term performance, and the Retirement System actively manages its investment portfolio, including periodic review of its investment policy and asset allocation strategy. The Retirement System continues to review its investment and asset allocation policies as part of its regular operations and continues to rely on an investment policy which is consistent with the principles of diversification and the search for long-term value. Because the values of individual investments fluctuate based on volatile market conditions, the amount of losses, if any, that the Retirement System will recognize in future actuarial valuations cannot be determined. Market fluctuations are an expected investment risk for a pension fund and the value of the Retirement System investment portfolio changes periodically. 83
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SAN FRANCISCO INTERNATIONAL AIRPORT
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2010A BONDS MATURITY SCHEDULE The i
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Information Provided by the Commiss
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Page Page VERIFICATION OF MATHEMATI
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The 2010A Bonds will be secured by
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Maturity Date (May 1) 2011 2012 201
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Interest on the 2010A Bonds will be
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Mandatory Sinking Fund Redemption T
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Redemption of Credit Provider Bonds
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SPECIAL CONSIDERATIONS RELATING TO
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“Operation and Maintenance Expens
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Fifth, to pay for necessary reconst
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Letter of Credit Upon the delivery
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Pooled Reserve Account The 1991 Mas
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No Acceleration The Bonds are not s
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LETTER OF CREDIT AND REIMBURSEMENT
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appealable judgment, to be null and
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In addition to revenues received fr
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In addition to these regulatory act
Page 40 and 41: Each of Moody’s, Standard & Poor
Page 42 and 43: Initiative, Referendum and Charter
Page 44 and 45: Jackson J. Wong was appointed Chief
Page 46 and 47: that supports all airlines in the I
Page 48 and 49: from $1.50 to $4.00. The Airport is
Page 50 and 51: Airport Security In the immediate a
Page 52 and 53: � United Airlines commenced daily
Page 54 and 55: The following table lists the air c
Page 56 and 57: During Fiscal Year 2008-09 approxim
Page 58 and 59: Domestic Enplanements. During Fisca
Page 60 and 61: International Enplanements. Interna
Page 62 and 63: Cargo Traffic and Landed Weight Car
Page 64 and 65: TOTAL LANDED WEIGHT BY AIRLINE †
Page 66 and 67: Settlement Agreement Under the Sett
Page 68 and 69: Expiration of the Settlement Agreem
Page 70 and 71: the beneficiaries (the people of th
Page 72 and 73: Hazardous Material Management Envir
Page 74 and 75: SUMMARY OF AIRPORT FINANCIAL RESULT
Page 76 and 77: Aviation Market Stimulus Program In
Page 78 and 79: On November 21, 2006, Travelex, the
Page 80 and 81: PRINCIPAL AIRPORT CONCESSIONAIRES
Page 82 and 83: Off-Airport Parking Facilities Seve
Page 84 and 85: INTEREST RATE SWAP POLICY MAXIMUM N
Page 86 and 87: The table below summarizes the inte
Page 88 and 89: SUMMARY OF PAYMENTS MADE BY THE AIR
Page 92 and 93: A decline in the actuarial value of
Page 94 and 95: Postemployment Health Care Benefits
Page 96 and 97: Under the Treasurer’s current inv
Page 98 and 99: Debt Service Requirements The follo
Page 100 and 101: Current and Future Financings Capit
Page 102 and 103: Other Matters In the regular course
Page 104 and 105: federal, state or local tax liabili
Page 106 and 107: MISCELLANEOUS This Official Stateme
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Introduction APPENDIX B INFORMATION
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APPENDIX C SUMMARY OF CERTAIN PROVI
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Closing Date means the date upon wh
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Interest Payment Date means each da
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the Trustee for cancellation; (b) B
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payment agreement with the United S
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Special Facility means any existing
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Revenue Fund; Allocation of Net Rev
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Moneys in the respective accounts i
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Investments are allocated. Amounts
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Subordinate Bonds The Commission ma
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act or thing the effect of which wo
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filing of any such petition or to t
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moneys, funds and properties pledge
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The recitals, statements and repres
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The Trustee or the Paying Agent, as
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to or greater than the Credit Facil
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(a) such 2010A Bonds sold by the Re
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The Remarketing Agent The Remarketi
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APPENDIX D SUMMARIES OF CERTAIN PRO
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computations made in accordance wit
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APPENDIX E SUMMARY OF CERTAIN PROVI
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statement, it must be available fro
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Duties, Immunities and Liabilities
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APPENDIX F INFORMATION REGARDING TH
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Ambac Assurance’s consolidated fi
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Capitalization of AGM At September
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The available amount of each MBIA s
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complaint also alleges that certain
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APPENDIX G PROPOSED FORM OF OPINION
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APPENDIX H JPMORGAN CHASE BANK, NAT
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The Available Amount (as hereinafte
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JPMorgan Chase Bank, National Assoc
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IN WITNESS WHEREOF, this Certificat
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(ii) $_______________________ is de
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The undersigned Transferor acknowle
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The Bank of New York Trust Company,
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The Bank of New York Trust Company,
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