BOARD OF TRUSTEES PRESIDENT/CEO Andy Wirth, Chair Marily M. Mora, A.A.E. Rick Murdock, Vice Chair EXECUTIVE VICE-PRESIDENT/COO Nat Carasali, Secretary Dean E. Schultz, A.A.E. Jerry Hall, Treasurer GENERAL COUNSEL Bill Eck Ann Morgan, Fennemore Craig Lisa Gianoli CLERK OF THE BOARD Adam Mayberry Claire Johnson Jenifer Rose Jessica Sferrazza
RENO-TAHOE AIRPORT AUTHORITY MEETING OF THE BOARD OF TRUSTEES September 10, 2015 9:00 a.m. Board Room, Administrative Offices Second Floor, Main Terminal Building Reno-Tahoe International Airport Reno, Nevada
Items V, VI, VIII, IX and XII are action items for the Board to consider. The Board may discuss a matter when it is brought up, but no action may be taken on it unless it has been specifically included on an agenda as an action item.
Public comment at the Board meeting will be allowed on agenda items as well as non-agenda items. Persons are invited to submit comments in writing on agenda items and/or attend and make comment on that item at the Board meeting. Requests to speak on a particular item should be submitted to the Clerk of the Board before the item is called by the Chairman.
I. PLEDGE OF ALLEGIANCE
II. ROLL CALL
III. PRESENTATIONS AND AWARDS A. Employee, Tenant and Special Recognition B. Introduction of New, Promoted and Retired Employees C. Tenant Communication
IV. PUBLIC COMMENT, if any – Limited to three minutes per person
V. APPROVAL OF MINUTES – August 13, 2015 Board Meeting Minutes
VI. APPROVAL OF AGENDA
VII. COMMITTEE AND LIAISON REPORTS A. Finance and Business Development Committee B. Planning and Construction Committee C. Airport Noise Advisory Panel (ANAP) D. Community Outreach Committee (COC) E. Stead Liaison F. RSCVA Board Board Agenda September 10, 2015 Board Meeting Page 2 of 3
G. Air Service Liaison H. The Chamber Reno Sparks Northern Nevada I. Reno-Tahoe International Airport Users Committee
VIII. CONSENT ITEMS FOR BOARD ACTION
A. None.
IX. ITEMS FOR BOARD INFORMATION, DISCUSSION AND POSSIBLE ACTION
A. #15(09)-35 Authorization for the President/CEO to Negotiate Final Terms and Execute a 5- Year Nonexclusive Gaming Concession License with International Game Technology PLC Commencing on December 1, 2015
B. #15(09)-36 Adoption of Resolution No. 526 to Authorize the Issuance of the Reno-Tahoe Airport Authority’s Airport Revenue Refunding Bond, Series 2015, not to Exceed the Aggregate Principal Amount of $22,000,000, Award the Purchase of the 2015 Bond to BBVA Compass Bank, and Authorize the President/CEO, or her Designee, to Negotiate and Execute any Documents Relating Thereto
X. ITEMS FOR BOARD INFORMATION AND DISCUSSION
A. Presentation 1. Community Outreach Campaign Update
B. Board Meeting Schedule 1. October 6, 2015 9:00 am Finance & Business Development Committee Meeting 2. October 6, 2015 10:00 am Planning & Construction Committee Meeting 3. October 8, 2015 9:00 am Board of Trustees Meeting 4. November 3, 2015 8:30 am Board of Trustees Retreat - Meeting Room at Squaw Valley 5. November 10, 2015 9:00 am Finance & Business Development Committee Meeting 6. November 10, 2015 10:00 am Planning & Construction Committee Meeting 7. November 12, 2015 9:00 am Board of Trustees Meeting
C. President/CEO’s Report
D. General Board comments, questions, and items for future Board meetings
XI. PUBLIC COMMENT, if any – Limited to three minutes per person
XII. ADJOURNMENT
Items will not necessarily be considered in the sequence listed. This meeting may be continued if all of the items are not covered in the time allowed. If the meeting is to be continued, the time and place will be announced at the end of the portion of the meeting to be continued. Board Agenda September 10, 2015 Board Meeting Page 3 of 3
SUPPORTING MATERIAL: The designated contact to obtain supporting material is Claire Johnson, Clerk of the Board, P.O. Box 12490, Reno, NV, 89510 or 775-328-6410. Supporting material is also available at the Reno-Tahoe Airport (Administrative Offices) and at the scheduled meeting.
Members of the public who are disabled and require special accommodations or assistance at the meeting are requested to notify the Clerk of the Board in writing at P.O. Box 12490, Reno, Nevada 89510 or by calling (775) 328-6410 prior to the meeting date.
THIS AGENDA HAS BEEN POSTED AT THE FOLLOWING LOCATIONS: 1. Airport Authority Administrative Offices – 2001 E. Plumb Lane, Reno 3. Reno City Hall – One East First Street, Reno 2. Washoe County Administrative Offices – 1001 E. 9th Street, Reno 4. Sparks City Hall – 431 Prater Way, Sparks
*** These draft minutes have not yet been approved and are subject to revision at the next regularly scheduled meeting. ***
RENO-TAHOE AIRPORT AUTHORITY BRIEF OF MINUTES MEETING OF THE BOARD OF TRUSTEES August 13, 2015 9:00 a.m.
MEMBERS PRESENT ALSO PRESENT Andy Wirth, Chair Marily M. Mora, A.A.E. Rick Murdock, Vice Chair President/CEO Jerry Hall, Treasurer Dean Schultz, A.A.E. Nat Carasali, Secretary Executive Vice President/COO Bill Eck Ann Morgan Lisa Gianoli General Counsel Adam Mayberry Claire Johnson Jenifer Rose Clerk of the Board Jessica Sferrazza
MEMBERS ABSENT/EXCUSED None
The Board of Trustees met in the Board Room, Airport Authority Administrative Offices, Reno-Tahoe International Airport, Reno, Nevada. Chair Andy Wirth called the meeting to order. The Pledge of Allegiance was recited.
III. FEDERAL LEGISLATIVE ISSUES UPDATE A. Congressman Mark Amodei, Representative in the United States House for Nevada’s 2nd Congressional District, spoke to the challenges the Reno-Tahoe International Airport (RTIA) has been facing with the Customs and Border Protection (CBP). Specifically, he discussed the actions his office has taken in seeking solutions to these issues, working in conjunction with the two Senate offices and the Porter Gordon Group. At Congressman Amodei’s request, a visit was arranged for him and his staff with the local CBP office. The visit was also attended by the regional CBP Director of Field Operations from San Francisco. It was the Congressman’s goal to establish direct communication and representation with the CBP. During the course of the meeting, it was stressed that the job of the Airport’s Administration and Board of Trustees is to increase the Airport’s footprint, whether it be in freight, general aviation, commercial-domestic, or commercial-international flights, and that an understanding needs to be reached on how the CBP will support that growth. He stated that the discussion included what is going on with the current customs processing times and the need for there to be more collaborative efforts between the San Francisco CBP office, the Airport Authority, and the local CBP office, in determining what can be done to improve the processing times and to prepare for handling additional international flights into Reno in the future.
Meeting of the Board of Trustees August 13, 2015 Brief of Minutes Page 2 of 8
Congressman Amodei stated that there is language in the House’s Homeland Security Appropriations Bill directing the CBP to study their work model and to address the customs staffing needs for smaller operations, instead of just saying no to requests for additional CBP staff. If there are opportunities and appropriate ways to pay for staffing outside of the CBP’s budgetary process without compromising homeland security, then that option needs to be considered. Congressman Amodei is optimistic that a positive dialogue has begun and will continue. The language in the House Appropriations Bill directs that the CBP study be conducted and a report be provided within a year. The action plan is to go back to the CBP in San Francisco, and in conjunction with the Port Director in Reno and the Airport Authority, begin a process of gathering data, such as looking at the wait times at a variety of other facilities, and identifying possible solutions to address the staffing shortage. Congressman Amodei mentioned that he just learned this week that there is an internal CBP regulation that prevents the Port Director from doing screening. This essentially means that the 3-person model in Reno is really a 2-person model, and that needs to be looked at to see if there is a way to rectify that matter. Congressman Amodei stated he plans to be in San Francisco within the next 30 days as a follow up to the meeting held earlier this week. He emphasized that a full collaboration effort is underway and that all parties are expected to bring suggestions to the table for consideration. Finally, Congressman Amodei stated he will continue to work with Senator Reid’s and Senator Heller’s offices to find a solution for the issues Reno-Tahoe International Airport is facing.
Chair Wirth thanked Congressman Amodei for his engagement and advocacy on behalf of the constituents in the Airport’s catchment area, which in addition to District 2, also includes all of Lake Tahoe and portions of California.
Trustee Sferrazza inquired as to the status of the increase in the Passenger Facility Charge (PFC). CEO Marily Mora responded by saying that with the assistance of Jon Porter, outreach has been done in the last two weeks to gather relevant information and a letter of support has been prepared that includes approximately 30 signatures from Mayors around the country. The Mayors of Reno and Sparks will be asked to join in the fight to get the PFC increase and the letter will be going to Capitol Hill sometime in September 2015. Ms. Mora said that an increase in the PFC would result in more local money that could be allocated to Airport projects. Congressman Amodei stated his support of an increase in the PFC and said that he will work to the extent it is appropriate to make sure it is included in a continuing resolution should one occur. He said it is important in order to assure continued resources for the Airport’s expansion, increased footprint, and economic activity in the region.
On behalf of RTAA staff, Ms. Mora thanked Congressman Amodei for his consistent support and passion on the Customs issue.
B. Next, the Honorable Jon Porter of the Porter Gordon Group provided further information on federal legislative issues of concern to the Airport Authority. Mr. Porter began by commenting on the dedication of the Nevada delegation, especially Congressman Amodei and his staff, with respect to their advocacy on the CBP issue.
Mr. Porter stressed that his role for the Airport is to find solutions to problems and to make it as easy as possible for the delegation and their staff to help with issues. A key part of the federal Meeting of the Board of Trustees August 13, 2015 Brief of Minutes Page 3 of 8
lobbyist role is to reach beyond the Nevada delegation. Meetings have been held with numerous chairmen of committees from other states to make sure they are aware of what’s happening here in Reno, in Tahoe, in Sparks and in the whole northwestern region of the State. He said that when talking about specific issues, whether it is with the Federal Aviation Administration (FAA), the Transportation Security Administration (TSA), or the CBP, there is always an attempt to bridge the gap between the Nevada delegation and other members of Congress around the country.
Mr. Porter continued his presentation by touching upon issues related to: • FAA - Fiscal Year (FY) 2016 budget appropriations; multi-year reauthorization related to Airport Improvement Program (AIP) grant funding, increase in PFC cap, and Alternative Minimum Tax (AMT) exemption; and eligibility requirements of the small community air service development program • TSA - FY 2016 Department of Homeland Security budget appropriations; increased employee security screening; and terminal security exit lane staffing • CBP – FY 2016 Department of Homeland Security budget appropriations; and staffing in Reno.
Mr. Porter stressed there are serious challenges with the CBP issue due to the significant sequestration budget cuts that have been imposed on Homeland Security and the TSA. The delegation is dealing with that on a top level perspective, and it is a difficult balancing act between homeland security and the local communities, as they try to make sure there is funding for all of these programs. Another key issue is that from a homeland security perspective, the government is at an all-time high as far as security and protection of the Country. In fairness to the elected officials and the border protection team, none of those leaders or the Airport leadership, want to reduce security. Another key challenge for the delegation is the current shortage of approximately 2000 CBP officers across the country. One of the challenges is there are 12 gateway airports across the country that are the priority of the CBP, and that they have to make sure those gateway airports have the proper number of customs officers. This is complicated by the lengthy training program for CBP officers, the need to hire people with the proper background, and some serious labor issues within the CBP. In addition, there are numerous other airports of a similar size to the RTIA that have similar staffing challenges, and they too are trying to find ways to fund their CBP programs.
From a solutions perspective, Mr. Porter stated that this is the only issue in the State of Nevada where the full Nevada delegation, Democrats and Republicans alike, and especially Senator Reid, Senator Heller and Congressman Amodei, are working together. Their staffs are meeting regularly on this topic, and are working together unlike on any project Mr. Porter has ever seen. They are looking for ways to work with the U.S. Immigration and Customs Enforcement (ICE), and ICE has been very responsive. One of the ideas being worked on is how to transition some of the ICE Officers into being able to help with CBP. Mr. Porter also mentioned that another possibility is the option of amending the current user fee program whereby an airport pays for just the additional CBP staff needed.
Chair Wirth thanked Mr. Porter for his help on the CBP issue and reminded him that the Airport’s catchment area is bi-state. He besieged Mr. Porter to continue to think about options Meeting of the Board of Trustees August 13, 2015 Brief of Minutes Page 4 of 8
that allow us to engage elected officials in California to identify bi-state solutions. Mr. Porter responded that part of his role with the Airport team is to reach out to members from other states. Trustee Sferrazza asked who has been contacted in the state of California on this issue. Mr. Porter responded that some work has been done with the Senators’ offices in California, however he indicated where the most time has been spent is working with the committee leadership because that is where decisions are being made, i.e. Chairman Bill Shuster, Chairman Frank LoBiondo and Chairman John Carter.
Trustee Sferrazza posed a follow up question regarding the user fee to pay for CBP by asking how likely it is for that to be a solution. Mr. Porter responded by saying that the current user fee program is an option available to airports that allows the airport to pay for CBP officers. The problem with the user fee at the moment is that it is an all or nothing option. Mr. Porter said that the question from a policy standpoint for the Airport is whether it wants to fully fund the CBP or have the federal government continue to participate. The goal to this point has been to make sure the federal government pays for what has historically been provided. Ms. Mora added that what is being worked on is a hybrid model because Reno has been a Port of Entry for a long time. The RTIA currently has 3 CBP positions paid for by the federal government, which equates to approximately a half million dollars per year. The proposal is to allow the Airport to pay for new CBP officers going forward. McCarran International Airport augments their CBP staff with what’s called a 559 program which is a mechanism that only allows an airport to pay for overtime of existing staff. The CBP has not been flexible with that mechanism, for instance in allowing an airport to bring in staff from other airports on a part-time basis, which is what the RTIA needs. The Airport’s goal is to try and gain more flexibility within the existing CBP programs, and Ms. Mora stated that legislatively the Airport is going forward trying to find an answer on that. In the meantime, since there is a very robust ICE presence in this community, there is some thought that there may be some other layer of assistance that could be provided from the community to help improve the customs processing time. Ms. Mora also pointed out that the RTAA stepped in initially to get the facility up and running by assigning six staff to the CBP, including 3 Airport Police Officers and 3 Customer Service Representatives. She stated that the Airport is doing its part and is willing to do more because the CBP does have a nationwide staffing issue, but that going backwards and paying for existing staffing is punitive.
Mr. Porter clarified that the delegation has also worked Chairman Ed Royce of California. He ended by saying that the Airport and the Nevada delegation have undertaken a major challenge by taking on a change in the federal government. Because of the RTAA staff’s diligence when they were told no by the CBP, and by them staying on top of every step of the project, against all odds, the CBP facility was built. It is a credit to the RTAA team.
IV. PRESENTATIONS AND AWARDS A. Employee, Tenant and Special Recognitions None.
B. Introduction of New, Promoted and Retired Employees Dean Schultz, Executive Vice President/COO, introduced three new employees who recently joined the Reno-Tahoe Airport Authority – Barry Wellard, Airfield Maintenance Worker, Chris Lamoureaux, Automotive Technician and Scott Zamora, Airport Firefighter. Meeting of the Board of Trustees August 13, 2015 Brief of Minutes Page 5 of 8
Next, Mr. Schultz congratulated three employees on their promotions from Security Specialists to Lead Security Specialists – Christine Stanford, Tom Upp, and Annie Yamamoto.
C. Tenant Communication Tina Iftiger, VP of Airport Economic Development, introduced two new team members of Select Service Partners (SSP) America, the Airport’s food and beverage concessionaire. Scott Welding, is SSP’s Sr. Director of Brands and Concepts, and Robert Maluso, is the Executive Chef. Ms. Iftiger highlighted the fact that RTAA staff have been working with SSP’s Sr. VP for this region and their General Manager at RTIA for approximately 8 months to refresh the food and beverage offerings. This past June, Mr. Welding and Mr. Maluso joined SSP, and since then have been fully engaged to bring new ideas and concepts to the Airport.
Next, Ms. Iftiger introduced Tracy Kalbfleisch who is the new General Manager for Dassault Aviation Services in Reno. Ms. Iftiger said that Mr. Kalbfleisch has been a great addition already with his involvement with workforce training and the tax abatement legislation.
V. PUBLIC COMMENT (limited to 3 minutes) None.
VI. APPROVAL OF MINUTES On motion by Trustee Carasali, seconded by Trustee Murdock, which motion duly carried by unanimous vote, the Board approved the minutes from the Board of Trustees meeting of July 9, 2015.
VII. APPROVAL OF AGENDA On motion by Trustee Sferrazza, seconded by Trustee Carasali, which motion duly carried by unanimous vote, the Board approved the August 13, 2015 Board of Trustees meeting agenda.
VIII. COMMITTEE / LIAISON REPORTS Committee / Liaison reports were given by:
A. Finance and Business Development Committee – Trustee Jerry Hall B. Planning and Construction Committee – Chair Andy Wirth C. Airport Noise Advisory Panel – Chair Andy Wirth D. Community Outreach Committee (COC) – Chair Andy Wirth E. Stead Liaison – Mike Dikun (RTAA) F. RSCVA Board – Trustee Nat Carasali G. Air Service Liaison – Trustee Rick Murdock H. The Chamber Reno Sparks Northern NV – Marily Mora (RTAA) I. Reno-Tahoe International Airport Users Committee – Chair Andy Wirth
IX. CONSENT ITEMS FOR BOARD ACTION A. None.
Meeting of the Board of Trustees August 13, 2015 Brief of Minutes Page 6 of 8
X. ITEMS FOR BOARD INFORMATION, DISCUSSION AND POSSIBLE ACTION A. #15(08)-34 Approval of Reno-Tahoe Airport Authority Chairman’s Permanent Committee Appointments Including the Appointment of Two Alternates to the Finance and Business Development Committee and the Planning and Construction Committee for Fiscal Year 2015- 2016
On motion by Trustee Carasali, seconded by Trustee Eck, which motion was duly carried by unanimous vote, the Board approved Agenda Item #15(08)-34 as follows:
Approved Reno-Tahoe Airport Authority Chairman’s Permanent Committee Appointments Including the Appointment of Two Alternates to the Finance and Business Development Committee and the Planning and Construction Committee for Fiscal Year 2015-2016
XI. ITEMS FOR BOARD INFORMATION AND DISCUSSION
A. Presentation 1. Brian Kulpin, VP of Marketing and Public Affairs, introduced Stephanie Kruse, President and Founder of KPS3, to present the 2015 Customer Service Survey results. KPS3 has conducted several customer service surveys for the RTAA in the past.
Ms. Kruse provided highlights and insights from the customer satisfaction intercept survey that was conducted during a 7-week period from March 13 through April 7, 2015. The survey was completed by 438 adult travelers, included 29 attributes, and queried satisfaction levels in 8 categories including arrival, check-in, TSA, personnel, food & beverage, amenities, facilities, and overall satisfaction. Ms. Kruse discussed the respondent profile and provided percentages of responding travelers according to residents versus visitors, business versus leisure, arrivals versus departures, departure cities and destination cities, families versus those traveling alone, etc., as well as age, income levels, employment, and education.
The survey resulted in an overall mean rating of 6.29 on a 7 point scale. The top four ratings for the Airport are ease of drop off, custodial staff, feeling of safety and security, and the attractiveness/décor in the check in area. Ms. Kruse also provided comparisons of the 2015 survey data to the survey conducted in 2014, and said that all areas were statistically equivalent between the two surveys. Finally, based on KPS3’s analysis of the data, Ms. Kruse discussed areas of opportunity and recommendations to the RTAA. Overall, the survey results were very positive for the Airport.
Chair Wirth suggested that in the future, the survey report/results be provided to the Trustees in advance so they have time to digest the information ahead of the formal presentation. Trustee Sferrazza began to ask a question about TSA. Ms. Mora asked that a discussion regarding TSA be tabled until next month. As a result of feedback in the Customer Service Survey, representatives from TSA will meet with the Trustees in September.
Following Ms. Kruse’s presentation of the 2015 survey results, responses to areas of opportunity were provided by SSP America and RTAA staff. The first response was presented by Mr. Welding and Mr. Maluso of SSP America, who highlighted their new focus on healthy Meeting of the Board of Trustees August 13, 2015 Brief of Minutes Page 7 of 8
food options, local food products and sourcing, a greater variety of foods, and improved product quality. Next, David Pittman, Director of Facilities and Maintenance, presented information on the number and locations of Universal Serial Bus (USB) Charging Stations currently available in the Airport and the plan for installing additional charging stations. Following next, Maggie McGrew, Training Specialist, presented the RTAA customer service training plan. Lastly, Mr. Kulpin shared plans for the ongoing customer service survey program which will provide for different surveying methods and more frequent surveying.
At this point, Chair Wirth offered two items for the Board’s consideration. First, he reiterated the need for the Trustees to be able to digest information in advance, and that if after further consideration there are Trustees who would be interested in posing additional questions on the Customer Service Survey results, it could be placed on next month’s agenda. Chair Wirth will follow up on this. Second, in the interest of time, Chair Wirth suggested that the Community Outreach Campaign Update be postponed until next month’s meeting. There was no opposition or comment voiced on these suggestions.
2. Community Outreach Campaign Update – As suggested by Chair Wirth, this presentation was postponed and will be presented at the September Board meeting.
B. Board Meeting Schedule Chair Wirth referred to the schedule of upcoming meetings.
1. September 8, 2015 9:00 am Finance & Business Development Committee Meeting 2. September 8, 2015 10:00 am Planning & Construction Committee Meeting 3. September 10, 2015 9:00 am Board of Trustees Meeting 4. October 6, 2015 9:00 am Finance & Business Development Committee Meeting 5. October 6, 2015 10:00 am Planning & Construction Committee Meeting 6. October 8, 2015 9:00 am Board of Trustees Meeting 7. November 3, 2015 TBD Board of Trustees Retreat
C. President/CEO’s Report Ms. Mora referred the Trustees to the written President/CEO’s Report included in their Board binders and offered to answer any questions they might have regarding information in the report.
D. General Board Comments, Questions, and Items for Future Board Meetings Chair Wirth asked each Trustee if they had any comments, questions or items for future Board meetings. Trustee Hall suggested that an executive summary accompany any presentations that are provided in advance of meetings. Trustee Sferrazza recognized the presence of Councilwoman Naomi Duerr in the audience. She also asked that a review of the Community Outreach Committee (COC) bylaws and membership be placed on the next month’s agenda. Chair Wirth asked Ann Morgan, General Counsel, for her comments on the process relative to making changes to the COC. Ms. Morgan responded that she would develop a procedural checklist for how any intended changes might be accomplished. Chair Wirth also recognized Ms. Duerr who is the City of Reno’s Alternate Liaison to the RTAA Board. Trustee Rose expressed her gratitude to Chair Wirth for her appointment to three Committees. Secondly, she expressed her support of local sourcing for food and beverage items offered by SSP. Finally, Trustee Rose complimented the RTAA on the recycling efforts reported in the President/CEO Meeting of the Board of Trustees August 13, 2015 Brief of Minutes Page 8 of 8
Report and indicated she has some ideas on furthering those efforts. Trustee Carasali suggested that it would be beneficial to inform and educate the new Trustees on what is being done and what is being planned for air service sustainability. Ms. Mora stated that topic was covered extensively in the 2-day orientation training recently conducted for the new Trustees.
XII. PUBLIC COMMENT None.
XIII. ADJOURNMENT There being no further business, the meeting was adjourned at 11:07 am.
______Chair Andy Wirth
ATTEST:
______Secretary Nat Carasali
*** These draft minutes have not yet been approved and are subject to revision at the next regularly scheduled meeting. ***
Board Memorandum Reno-Tahoe Airport Authority
Date: September 2, 2015 Memo: # 15(09)-35 To: Chairman & Board Members For: September 10, 2015 Board Meeting From: Marily Mora, A.A.E., President/CEO Subject: AUTHORIZATION FOR THE PRESIDENT/CEO TO NEGOTIATE FINAL TERMS AND EXECUTE A 5-YEAR NONEXCLUSIVE GAMING CONCESSION LICENSE WITH INTERNATIONAL GAME TECHNOLOGY PLC COMMENCING ON DECEMBER 1, 2015
STAFF RECOMMENDATION Staff recommends that the Board of Trustees (Board) authorize the President/CEO to negotiate final terms and execute a 5-year Nonexclusive Gaming Concession License with International Game Technology PLC (IGT) commencing on December 1, 2015.
PURPOSE This action is in support of the Reno-Tahoe Airport Authority (RTAA) Strategic Priority # 4 – Facilitate Economic Development at Both Airports, as identified in the RTAA Fiscal Year (FY) 2014-2018 Comprehensive Strategic Plan, to facilitate continued economic development for the RTAA and to ensure its financial growth and stability as a self-sustaining entity by maximizing non-airline revenue.
BACKGROUND Over the years, the Reno-Tahoe International Airport’s (Airport) gaming revenues have generally aligned with Washoe County gaming trends, which have been in slow decline since 2000, largely due to growing competition from Tribal gaming in California and the Pacific Northwest. The U.S. recession of 2007-2009 and its resultant reduction in local area tourism have had a further significant negative impact on local and statewide gaming revenues. According to the University of Nevada Center for Gaming Research, the period from 2000 to 2007 showed a 34% decline in gaming revenue throughout Washoe County and the period between 2007 to 2014 reflected an additional 28.32% decline. Compounded with the local gaming industry decline, the Airport has experienced a 34% decline in enplanements and a 63% drop in gross gaming revenue since FY 2007. The table below reflects this decline and provides a breakout comparison of Airport enplanements, IGT’s gross gaming revenue, RTAA gaming revenue share, and the gross revenue per enplaned passenger for Fiscal Years 2011- 2015.
Award of Gaming Concession License #15(09)-35 September 10, 2015 Board Meeting Page 2 of 5
IGT Gross Gaming Revenues Comparison FY 2011 – FY 2015 FY 11 FY 12 FY 13 FY 14 FY 15 Enplanements: 1,901,219 1,780,968 1,756,183 1,658,066 1,649,304 IGT Gross Gaming Revenue: $4,189,626 $3,374,552 $2,967,042 $2,495,759 $2,389,259
RTAA Revenue: $2,256,664 $1,790,472 $1,572,532 $1,322,752 $1,266,307 Revenue per Enplaned Passenger: $2.20 $1.89 $1.69 $1.51 $1.45
IGT currently operates the gaming program at the Airport under a Nonexclusive Gaming Concession License (License) that commenced on December 1, 2008 and will expire on November 30, 2015. During its current License term, IGT has invested nearly $1.5M to upgrade and replace gaming machines and install the IGT Advantage Slot System which allows for enhanced game offerings, player bonuses, and higher progressives. IGT has also upgraded its network and surveillance program in the lobby and concourse gaming areas as well as upgraded its vault and count room security. As part of its $1.5M investment, IGT has also installed 30 new linked-progressive Mega Jackpot machines at the Airport. These improvements have provided enhanced gaming opportunities to the traveling public, new revenue opportunities to the RTAA, and improved IGT’s operational efficiencies.
DISCUSSION In considering the gaming concession in the Airport beyond November 2015, staff reviewed the current market and economic forecasts within the Airport’s air service catchment area. As a result of this research, staff learned that the Economic Development Authority of Western Nevada (EDAWN) forecasts significant job growth over the next 5 years in northern Nevada due to new market entrants, including Tesla, Panasonic, Switch, etc. Given EDAWN’s unprecedented 5-year jobs and population growth forecast, and general economic recovery in the catchment area, a shorter term gaming license of no more than 5 years is in the RTAA’s best interest. Staff will continue to monitor enplanement growth to determine if and when planning for facility expansion is warranted. Should the forecasted growth result in a significant increase in air service demand, and expansion planning be warranted in the next five years, the Airport gaming operator at that time will need to be included as a stakeholder in that planning process. Therefore, before the end of the proposed new 5-year license with IGT, staff intends to issue a public, competitive Request for Proposal for a new capital investment and longer- term license for the gaming concession. The planning and capital investment required to install a completely new Airport gaming program is substantial and would not result in a return on investment for a new operator within five years. Award of Gaming Concession License #15(09)-35 September 10, 2015 Board Meeting Page 3 of 5
As the incumbent license holder, IGT has a vertically integrated operation at the Airport. IGT owns the machines, the gaming license, manages the operation and has the necessary back-end infrastructure in place. IGT has continued to make capital investments over the years, and they are proposing a new capital investment of $906,000 that would enhance revenue opportunities and maintain existing systems. By contrast, a new gaming operator would need to make a significantly higher capital investment to deliver the program IGT currently has in place. The major capital investment required to install a new gaming program, coupled with a 5-year license term length, would provide insufficient time for any new gaming operator to receive a viable return on investment. IGT continues to be the innovative leader in the development of slot machine games and software platforms. Its qualifications and experience, commitment to technology and equipment, as well as its innovative marketing plan coupled with its vertical integration, allow for higher profit margins for both IGT and the RTAA. A direct license agreement with IGT avoids the necessity of paying third party management fees, as other gaming operators typically pay licensing fees to IGT for use of its machines, which would result in a three-way revenue split.
FISCAL IMPACT License Financial Terms: . 5-year license, with no extension options . Capital investment of approximately $906,000 over the 5-year term . Tiered monthly Concession Fee structure: Concession Fee of 30% up to the first $125,000 of monthly Net Win Concession Fee of 43% from $125,001 to $300,000 of monthly Net Win Concession Fee of 75% above $300,001of monthly Net Win . Office/storage/support premises rent of approximately $24,100 per year. Based on forecasted enplanement growth of 2%, the proposed new 5-year license value is estimated at nearly $5.1M with an annual average of $1M per year in revenue to the RTAA as depicted in the table below:
Award of Gaming Concession License #15(09)-35 September 10, 2015 Board Meeting Page 4 of 5
Projected Revenue and Enplanements Calendar Year (CY) 2016 – CY 2020 CY 16 CY 17 CY 18 CY 19 CY 20 TOTAL 5 YEAR Enplanements: 1,683,938 1,717,332 1,751,679 1,786,712 1,822,447 8,762,108 IGT Gross $2,675,981 $2,756,796 $2,811,932 $2,868,170 $2,925,534 $14,038,413 Gaming Revenue RTAA $955,672 $990,422 $1,014,484 $1,041,822 $1,070,398 $5,072,798 Revenue Revenue per Enplaned $1.59 $1.61 $1.61 $1.61 $1.61 $1.60 Passenger:
These figures reflect an average revenue share for the RTAA of 33% of IGT’s gross gaming revenue.
Proposed Capital Investment Detail: IGT’s capital investment reflects a significant commitment to the Airport operation and includes the infusion of $906,000, the majority of which would be invested within the first 2 years of the license term. The specifics of the capital investment include the following:
. Replacement of 22 existing GK Bar Top machines with new 22 G20 Bar Top Machines at $11,494 each. Total cost: $252,868
. $50,000 per year for Conversions/Game changes over the 5-year term. Total cost: $250,000
. Marketing & Advertising: $20,000 per year over the 5-year term. Total cost: $100,000
. Replacement of ticket redemption kiosks. The new kiosks are more efficient and will ensure passengers can cash their tickets when needed, and offer a sleeker, more appealing design. Total cost: $172,500
. Installation of new digital video surveillance camera recorders to allow IGT to upgrade to an IP megapixel camera which will enable IGT to install additional higher-denomination and multi-million dollar Megabucks and other progressive machines. Total cost: $40,000
. Replacement of existing cash counting machines with the most current model for improved efficiency and accuracy. Total cost: $78,000
Award of Gaming Concession License #15(09)-35 September 10, 2015 Board Meeting Page 5 of 5
. Install new automated KeyWatcher key-control inventory system for increased security. Total cost: $13,000
In addition to the capital investment outlined above, there are other expenses IGT has identified which they currently and will continue to incur throughout the new license term, including the addition and exchange of a number of Mega Jackpot (MJP) machines at the Airport. These very popular large-progressive jackpot machines include Megabucks and Wheel of Fortune and represent a substantial investment by IGT to build, install and operate. A critical component of the gaming operation, MJPs account for roughly 26% of the gaming machines at the Airport and currently produce nearly 42% of the total gross gaming revenue.
COMPANY BACKGROUND IGT is a global gaming and lottery systems company specializing in the design, development, manufacturing, sales and distribution of gaming machines, lottery systems, and network system products internationally, as well as online and mobile gaming solutions for regulated markets. Outside of the USA, the company has been involved in online gaming since 2005. IGT manufactures roughly half of the slot machines in the United States, its annual revenue is almost $2 billion, and is listed on the New York Stock Exchange. In July 2014, Italian gaming equipment company GTECH, the world’s largest global lottery business, acquired IGT for $6.4 billion. The companies have been combined under a new holding company based in the United Kingdom. In April of 2015, GTECH completed its acquisition and integration with IGT. The GTECH name was dropped and the new combined company's name is International Game Technology PLC.
COMMITTEE COORDINATION This item is scheduled to be presented at the September 8, 2015 Finance and Business Development Committee meeting.
RECOMMENDED MOTION It is hereby recommended that the Board adopt the following motion:
“It is hereby moved that the Board of Trustees authorizes the President/CEO to negotiate final terms and execute a 5-year Nonexclusive Gaming Concession License with International Game Technology PLC commencing on December 1, 2015.”
MMM/lo/cj Board Memorandum Reno-Tahoe Airport Authority
Date: September 2, 2015 Memo: #15(09)-36 To: Chairman & Board Members For: September 10, 2015 Board Meeting From: Marily M. Mora, A.A.E., President/CEO Subject: ADOPTION OF RESOLUTION NO. 526 TO AUTHORIZE THE ISSUANCE OF THE RENO-TAHOE AIRPORT AUTHORITY’S AIRPORT REVENUE REFUNDING BOND, SERIES 2015, NOT TO EXCEED THE AGGREGATE PRINCIPAL AMOUNT OF $22,000,000, AWARD THE PURCHASE OF THE 2015 BOND TO BBVA COMPASS BANK, AND AUTHORIZE THE PRESIDENT/CEO, OR HER DESIGNEE, TO NEGOTIATE AND EXECUTE ANY DOCUMENTS RELATING THERETO
PURPOSE The purpose of this action is the proposed adoption of a resolution authorizing the sale of the "Reno-Tahoe Airport Authority, Nevada, Airport Revenue Refunding Bond, Series 2015" (the "2015 Bond"), upon the terms provided in the attached Bond Resolution in Exhibit B. The sale of the 2015 Bond shall not exceed the aggregate principal amount of $22,000,000. The proceeds from the bond sale shall be used to redeem the current Airport Revenue Refunding Bonds, Series 2005 (the “Series 2005 Bonds”), which are currently outstanding in the amount of $20,940,000, and the cost of issuance necessary to execute this transaction.
The existing Series 2005 Bonds have a final maturity of July 1, 2026 and are the only outstanding Senior Lien Obligations of the Reno-Tahoe Airport Authority (RTAA). The Series 2005 Bonds are redeemable at the option of the RTAA on or after July 1, 2015.
This action will also delegate authority to the President/CEO, and in her absence the Chief Financial Officer, to complete negotiations and execute other necessary documents with the highest rated proposer (“Purchaser”) of the 2015 Bond as determined through the Request for Proposals (“RFP”) 15/16 #01 issued on July 9, 2015.
This action is in support of the RTAA Guiding Principle of Financial Integrity, to ensure the financial stability of the Airports, as identified in the RTAA Fiscal Year (FY) 2014-2018 Comprehensive Strategic Plan.
BACKGROUND As of July 1, 2015, the only senior lien bonds outstanding of the RTAA are the Series 2005 Bonds in the amount of $20,940,000. Senior lien debt represents borrowing that has a priority claim for payment from RTAA revenues after funding of operating expenses.
With an average net interest rate of 4.49%, the Series 2005 Bonds refunded the Series 1996A Airport Revenue Bonds (1996A Bonds). The 1996A Bonds were issued to finance the construction of a three story, 2,400 space parking garage in the main parking lot, a new terminal access roadway system to accommodate the parking garage, and a passenger skyway to connect the parking garage to the terminal.
Airport Revenue Refunding Bond, Series 2015 #15(09)-36 September 10, 2015 Page 2 of 5
With the interest rate on the outstanding Series 2005 bonds established at 5% and significantly lower rates likely available, the RTAA solicited proposals from qualified banking institutions to provide a direct loan/private-purchase of debt for the purpose of refunding the Series 2005 Bonds.
The 2005 Bonds have a final maturity of July 1, 2026 and may be redeemed at the option of the RTAA on or after July 1, 2015.
DISCUSSION The terms and conditions governing the proposed 2015 Bond are established under the Bond Resolution No. 526 attached as Exhibit B. This document allows the bond to be issued and sold for a specific purpose and defines the rights and responsibilities of each party to a bond contract (the RTAA and the Purchaser). The Bond Resolution also describes how much interest and principal will be paid to the Purchaser and when, how payments will be made, how the bond may be redeemed and what happens in the event of default, and a host of other terms and conditions.
The 2015 Bond will be paid solely from and secured by a pledge of Net Revenues derived from the operations of the Airport System and certain funds and accounts. Net Revenue represents gross revenues of the Airport System less operating and maintenance expenses. The RTAA’s debt is limited by the outstanding bond resolution requirement that net revenues pledged to pay debt service must exceed 125% of annual debt service.
The net revenues pledged to pay debt service for the Series 2005 Bonds as of June 30, 2015 are 211% of annual debt service based on preliminary RTAA accounting records. Final results for FY 2014-15 remain subject to the annual airline rates and charges settlement calculation and the external audit.
None of the properties of the Airport System are subject to any mortgage or other liens for the benefit of the Purchaser and no taxing power of the Authority, the City of Reno, the County of Washoe, the State of Nevada or any political subdivision or agency of the State of Nevada is pledged to the repayment of the Series 2015 Bond.
The interest on the 2015 Bond will be excluded from gross income under federal income tax laws.
In conjunction with the solicitation and issuance of the 2015 Bond, the Authority has retained the services of the following firms:
• Public Financial Management – Financial Advisor • Sherman & Howard – Bond Counsel
In regard to this RFP, the RTAA has not undertaken the necessary disclosure to comply with SEC rules applicable to selling securities to the public market. Therefore, it has limited the
Airport Revenue Refunding Bond, Series 2015 #15(09)-36 September 10, 2015 Page 3 of 5 prospective purchaser of the bond to banks and other sophisticated investors. The assignment of the Airport Authority's bond by the Purchaser to another holder will be restricted to other banks or sophisticated investors as well.
A Request for Proposals inviting banks and financial lending organizations to provide a direct loan was issued on July 9, 2015 (RFP 15/16-01). E-mail notifications were sent to sixty-seven (67) banks and financial institutions regarding the RFP opportunity. In addition, advertising notifications were published in the Reno Gazette Journal and the American Association of Airport Executives (AAAE) weekly newsletter.
The selection committee was comprised of three members of the Board of Trustees and management staff with extensive experience in finance and accounting.
Two proposals were received by the submission deadline of August 7, 2015, and the selection committee has ranked and recommended BBVA Compass Bank as providing the most favorable business terms and conditions.
BBVA Compass is a leading U.S. banking franchise with operations throughout the Sunbelt region and it ranks among the top 25 largest U.S. commercial banks based on deposit market share. BBVA Compass operates 688 branches in Alabama, Arizona, California, Colorado, Florida, New Mexico and Texas. It ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (5th). In addition, BBVA Compass has been recognized as one of the nation's leading Small Business Administration (SBA) lenders.
BBVA Compass is a subsidiary of BBVA Compass Bancshares Inc., a wholly owned subsidiary of BBVA (NYSE: BBVA). BBVA is a customer-centric global financial services group founded in 1857. BBVA Group has a solid position in Spain, is the largest financial institution in Mexico, and has leading franchises in South America and the Sunbelt region of the United States, as well as operations in China, France, Germany, Hong Kong, Italy, Japan, Singapore, Switzerland, Turkey and the United Kingdom. Its diversified business is geared toward high-growth markets and relies on technology as a key sustainable competitive advantage.
FISCAL IMPACT The following are the key terms and conditions of the BBVA Compass Bank purchase proposal:
1. Amount Willing to Lend: $22,000,000 2. Term of Loan: September 1, 2015 to June 30, 2026 (Eleven Years) 3. Pricing Formula: 7-Year LIBOR swap rate x 0.65% +1.46% 4. Indicative Fixed Rate: 2.71% as of August 20, 2015 5. Rate Lock: 30 Days with no breakage fee
6. Bank Counsel Fee: Not to exceed $17,500 7. Early Redemption: Make-Whole Call
Airport Revenue Refunding Bond, Series 2015 #15(09)-36 September 10, 2015 Page 4 of 5 Additional terms and conditions of the BBVA Compass Bank proposal are attached in Exhibit A.
Based on these terms, the RTAA’s annual senior lien debt service will drop from $2,519,500 to $2,255,000, a savings of $264,500. In FY 2015-16, the RTAA will enjoy savings of $198,400 reflecting the anticipated closing date of September 30, 2015 and the nine months remaining in FY 2015-16.
Over the eleven (11) year term of the 2015 Bond, the RTAA will benefit from $2.838 million of gross savings or $2.445 million on a present value basis. This represents a net present value savings as a percentage of refunding par of 11.68%. It is the RTAA financial policy to not consider any refinancing effort if it does not generate savings greater than 3% of refunding par. The proposed 2015 Bond is significantly above this threshold.
The adopted FY 2015-16 Budget estimated the interest rate on this refunding effort to be 2.75% with an estimated savings of $184,000.
In reviewing the proposals, the selection committee recognized that the significant growth forecasted in the Northern Nevada region may require facility upgrades and expansion during the term of the 2015 Bond. As a result, the proposal submissions were required to provide the RTAA with the flexibility to early redeem the 2015 Bond after a five year period, if appropriate.
BBVA Compass made four options available for the RTAA for early redemption. The financial advisor and staff reviewed each option, evaluated multiple scenarios, and made its recommendation to the selection committee to utilize the “Make-Whole Call” option.
The “Make-Whole Call” approach properly fits the name. This approach reflects the BBVA Compass Bank’s view that it has funded an investment earning 2.71% for 11 years. If the 2015 Bond is prepaid after five years, the bank has to reinvest the outstanding loan principal for the period that remains. If rates go down, the bank misses out on significant earnings and the RTAA is expected to make up the difference. If rates go up, the bank has a smaller loss and the penalty is significantly less.
Under this option, the RTAA will pay the following prepayment fee under different interest rate scenarios:
No Change in Rates 0.5% increase in .05% decrease in rates rates After Five (5) Years $191,433 $46,626 $386,178 After Seven (7) $162,235 $70,296 $252,336 Years
Under various scenarios, the Make-Whole Call is the best option because it provides the maximum flexibility to prepay with cash on hand and generally the lowest overall prepayment costs, particularly if rates remain unchanged or go up. While it is always extremely difficult to
Airport Revenue Refunding Bond, Series 2015 #15(09)-36 September 10, 2015 Page 5 of 5 predict the trend of interest rates, the 2015 Bond is being issued at a time when rates are at historically low levels, and recent discussions at the Federal Reserve indicate higher rates in the immediate future.
The “Make-Whole Call” option is only in effect if the RTAA decides to repay the debt early and the interest rate on the Bond will be at 2.71%.
COMMITTEE COORDINATION This item will be presented at the Finance and Business Development Committee Meeting held on September 8, 2015.
RECOMMENDATION It is hereby recommended that the Board adopt the following motion:
“It is hereby moved that the Board of Trustees adopt Resolution No. 526 to authorize the issuance of the Reno-Tahoe Airport Authority’s Airport Revenue Refunding Bond, Series 2015, not to exceed the aggregate principal amount of $22,000,000, award the purchase of the 2015 Bond to BBVA Compass Bank, and authorize the President/CEO, or her designee, to negotiate and execute any documents relating thereto”.
MM/rgg/cj
EXHIBIT A
Reno-Tahoe Airport Authority Summary of Bids for Private Placement 2015 Refunding Bonds
Bank BBVA Compass
A Lender Compass Bank and Compass Mortgage Corporation
B Contact/Lead Dillan Knudson I. Bank I.
Information C Location Phoenix, AZ
A Option # 1 2 3 Par Amount B Willing to Purchase 22,000,000 C Amortization 2016-2026 Early Redemption D Option Make-whole Call Call Premium 5-year at Par ($100) 7-year LIBOR swap 7-year LIBOR swap 7-year LIBOR swap D Pricing Formula rate x 0.65% + 1.46% rate x 0.65% + 1.46% rate x 0.65% + 1.63% II. Interest Rate Bid Rate Interest II. Indicative Fixed Rate E 2.71% 2.71% 2.88% as of August 20, 2015 G Rate Lock 30-days with no breakage
A Fees Due at Closing None Bank Counsel & B Not to exceed $17,500 Expense C Bank Counsel Stadling Yocca Carlson & Rauth
D Other Fees None
Key Terms and Annual audited financial statements due within 210 days of fiscal E Conditions year end Annual approved operating budget within 30 days of Board approval Annual certification of complinace with 1.25x rate covenant due within 210 days of fiscal year end
Other Provisions No CUSIP, no Offcial Statement, no book-entry closing III. Additional Information Must be classified as a "Loan"
Not registered under "Blue Sky" laws
Request site visit for credit approval Interest rate will be subject to gross-up upon an event of Tax Treatment taxability, if such event is caused by an action of the Authority Default Rate 25-year Revenue Bond Index + 3.00%
1.
EXHIBIT B Reno-Tahoe Airport Authority, Nevada Airport Revenue Refunding Bond Series 2015 RESOLUTION NO. 526
(Reno-Tahoe Airport Authority, Nevada)
A RESOLUTION DESIGNATED BY THE SHORT TITLE “2015 REFUNDING BOND RESOLUTION”; CONCERNING THE AIRPORT SYSTEM OF THE RENO-TAHOE AIRPORT AUTHORITY, NEVADA; AUTHORIZING THE ISSUANCE BY THE AUTHORITY OF ITS “RENO-TAHOE AIRPORT AUTHORITY, NEVADA, AIRPORT REVENUE REFUNDING BOND, SERIES 2015” FOR THE PURPOSE OF REFUNDING CERTAIN OUTSTANDING AIRPORT AUTHORITY REVENUE BONDS; PROVIDING THE FORM, TERMS, AND CONDITIONS OF THE BONDS AND THE SECURITY THEREFOR; PROVIDING FOR THE COLLECTION AND DISPOSITION OF REVENUES DERIVED FROM THE OPERATION OF THE AUTHORITY’S AIRPORT SYSTEM (OTHER THAN CERTAIN SPECIAL FACILITIES); PLEDGING SUCH REVENUES TO THE PAYMENT OF THE BONDS; PROVIDING OTHER MATTERS RELATING THERETO; AND PROVIDING THE EFFECTIVE DATE THEREOF.
(1) WHEREAS, pursuant to chapter 474, Statutes of Nevada 1977, cited in Section 1 thereof as the Reno-Tahoe Airport Authority Act, and all laws amendatory thereof (herein the “Authority Act”), the Airport Authority of Washoe County, now the Reno-Tahoe Airport Authority (herein the “Authority” and the “Issuer”) was created; and
(2) WHEREAS, the Authority Act provides in effect, among other provisions, that the board of trustees of the Authority (herein the “Board”) has the authority to control, operate, and maintain its airports located within Washoe County, Nevada (the “County” and the “State”) for the use and benefit of the public; and
(3) WHEREAS, the Authority, the boundaries of which are coterminous with the boundaries of the County, is a body corporate and politic, a quasi-municipal corporation, and a political subdivision of the State, and the Authority and its Board are organized and operating under the Authority Act and all laws supplemental thereto; and
1.
535681.003401.019
(4) WHEREAS, the Authority has previously issued its “Reno-Tahoe Airport Authority, Nevada, Airport Revenue Refunding Bonds, Series 2005” (the “2005 Bonds”).
(5) WHEREAS, pursuant to the Authority Act, as supplemented by the Local Government Securities Law and all laws amendatory thereof (herein the “Bond Act”), cited as Nevada Revised Statutes (herein “NRS”), 350.500 through 350.720, and all laws supplemental thereto, the Authority has the power to issue its revenue bonds which constitute special obligations of the Authority created or incurred thereby by the issuance of bonds, for the purpose of refunding, paying, and discharging certain outstanding bonds of the Authority for the purpose, among others, of reducing interest costs or effecting other economies (the “Project” or “Refunding Project”); and
(6) WHEREAS, the Authority hereby provides for the sale of the “Reno- Tahoe Airport Authority, Nevada, Airport Revenue Refunding Bond, Series 2015” (the “2015 Bonds”, “Bonds” or “Bond”); and
(7) WHEREAS, if after a sale of the 2015 Bonds pursuant to the provisions of NRS 350.105 to 350.195, inclusive, it is determined by the President/CEO of the Authority (the “Chief Executive Officer”) that the Authority will achieve interest rate savings, the Chief Executive Officer, or in her absence, the Chief Financial Officer is hereby authorized to specify in the Certificate of the Chief Executive Officer (as defined herein) which maturities of the 2005 Bonds, if any, will be refunded (the “Refunded Bonds”); to sell the 2015 Bonds to the best bidder therefor (the “Purchaser”); and to execute the Certificate of the Chief Executive Officer (as defined herein) for the 2015 Bonds; and
(8) WHEREAS, the 2015 Bonds are to bear interest at the rates per annum provided in the Certificate of the Chief Executive Officer, which rates must not exceed by more than 3% the 25 Bond Revenue Index most recently published in The Bond Buyer prior to the time bids were received for the 2015 Bonds, and are to be sold at a price equal to the principal amount thereof (not to exceed $22,000,000), plus a premium or less a discount not exceeding 9% of the principal amount thereof, all as specified by the Chief Executive Officer in a certificate dated on or before the date of delivery of the 2015 Bonds (the “Certificate of the Chief Executive Officer”); and
(9) WHEREAS, the Board has considered, found, and determined, and does hereby declare:
A. This Instrument pertains to the sale, issuance, and payment of the 2015 Bonds; and
B. Such declaration shall be conclusive in the absence of fraud or gross abuse of discretion in accordance with the provisions of NRS 350.579(2).
NOW, THEREFORE, THE BOARD OF TRUSTEES OF THE RENO- TAHOE AIRPORT AUTHORITY, NEVADA, DO RESOLVE: 2. 535681.003401.019
ARTICLE I
SHORT TITLE, DEFINITIONS, INTERPRETATION, RATIFICATION, AUTHENTICATION, AND EFFECTIVE DATE
Section 101. Short Title. This resolution shall be known as the, and may be cited by the short title, “2015 Refunding Bond Resolution” (herein the “Instrument” or the “Resolution”).
Section 102. Meanings and Construction.
A. Definitions. The terms in this section defined for all purposes of this Instrument and of any instrument amendatory hereof or supplemental hereto, and of any other instrument or any other document pertaining hereto, except where the context by clear implication otherwise requires, shall have the meanings herein specified:
(1) “acquire” or “ acquisition” includes the opening, laying out, establishment, purchase, construction, securing, installation, reconstruction, lease, gift, grant from the Federal Government, the State, any body corporate and politic therein, or any other Person, the endowment, bequest, devise, transfer, assignment, option to purchase, other contract, or other acquirement, or any combination thereof, of any properties pertaining to the Airport System, or an interest therein, or any other properties herein designated.
(2) “Airport Consultant” means an independent airport consultant or airport consulting firm, as from time to time appointed and compensated by the Board on the behalf and in the name of the Issuer:
(a) Who has a wide and favorable reputation for special skill and knowledge in methods of the development, operation, and management of airports and airport facilities; and
(b) Who is selected and retained by the Board, in the name of the Issuer, and is compensated thereby, but who is not in the regular employ or control of the Issuer.
(3) “Airport Fund” means the separate fund authorized to be continued in Section 517 hereof and designated as the “Reno-Tahoe Airport Authority, Nevada, Airport Fund,” which fund consists of a self-balancing group of accounts pertaining to the Airport System, and to which the various accounts herein created or otherwise designated relate.
(4) “Airport System” means the following airport facilities:
3. 535681.003401.019 (a) The presently existing:
4. 535681.003401.019
(i) Reno-Tahoe International Airport, and
(ii) Reno Stead Airport;
(b) All land, buildings, structures, and other facilities of such airports or related thereto of whatsoever character and wherever situated, within the Issuer, and all future enlargements thereof and other improvements thereto, however financed and wherever located, and including, without limitation, any independent airport of the Issuer for use by scheduled commercial air carriers and charter airlines or by like companies and located elsewhere in the County, in substitution for the presently existing Reno-Tahoe International Airport or being complementary thereto; and
(c) All properties, real, personal, mixed, or otherwise, now owned or hereafter acquired by the Issuer, through purchase, construction, or otherwise, and used in connection with such airports designated in subparagraph (a) of this paragraph and any additional airport permitted above by subparagraph (b) of this paragraph and in any way pertaining thereto, but excluding Special Facilities pertaining to any such airport facilities until the end of the respective terms of the Net Rent Leases pertaining to such Special Facilities.
(5) “Authority” or “Issuer” means the Reno-Tahoe Airport Authority, formerly designated as the Airport Authority of Washoe County, and formerly designated as the Washoe County Airport Authority prior to the adoption of chapter 668, Statutes of Nevada 1979, approved and effective on June 5, 1979, the Authority being situate in the County and the State, and constituting a body corporate and politic, a quasi-municipal corporation, and a political subdivision of the State, and means any successor corporation thereof; and where the context so indicates, either such term means the geographical area comprising the Reno- Tahoe Airport Authority, the boundaries of which are conterminous with the boundaries of the County.
(6) “Authority Act” means the act of creating the Issuer, under which act the Issuer and its Board are operating, and which act is cited as chapter 474, Statutes of Nevada 1977, and all laws amendatory thereof, and is designated in Section 1 thereof as the Reno-Tahoe Airport Authority Act.
(7) “Banking Institution” means a state or national bank or trust company which is a member of the Federal Deposit Insurance Corporation and of
5. 535681.003401.019
the Federal Reserve System, which has a shareholders’ equity of $10,000,000.00 or more, and which is located within the United States.
(8) “Board” means the Board of Trustees of the Authority, or the Board’s successor in functions, if any.
(9) “2005 Bonds” means the “Reno-Tahoe Airport Authority, Nevada, Airport Revenue Refunding Bonds, Series 2005” authorized to be issued pursuant to the 2005 Bond Resolution.
(10) “2015 Bonds”, “Bonds” or “Bond” means the “Reno-Tahoe Airport Authority, Nevada, Airport Revenue Refunding Bond, Series 2015” authorized to be issued pursuant to the provisions of this Resolution.
(11) “2005 Bond Resolution” means the resolution adopted by the Board authorizing the issuance of the “2005 Bonds,” as herein defined.
(12) “2015 Refunding Bond Resolution” or this “Resolution” means this Instrument adopted by the Board, and authorizing the issuance of the 2015 Bonds, as herein defined, and as stated in Section 101 hereof to be the short title of this Instrument.
(13) “Bond Act” means NRS 350.500 through 350.720, and all laws amendatory thereof, and is designated in Section 350.500 thereof as the Local Government Securities Law.
(14) “Bond Fund” means the special and separate account designated as the “Reno-Tahoe Airport Authority, Nevada, Airport System Parity Revenue Securities, Interest and Principal Retirement Fund,” heretofore created and continued herein. The Bond Fund consists of 3 separate subaccounts, the Interest Account, the Principal Account, and the Bond Reserve Account.
(15) “Bond Requirements” means the principal of, any prior redemption premiums due in connection with, and the interest on the 2015 Bonds and any additional bonds or other additional securities payable from Pledged Revenues and heretofore or hereafter issued, if any, or such part of such securities or such other securities pertaining to the Airport System as may be designated, as such principal, any such premiums, and such interest become due.
For purposes of computing the Bond Requirements of parity securities with respect to which a Qualified Swap or a Qualified Variable Rate Swap is in effect, the interest payable on such securities (a) except as provided in clause (b) of this sentence, shall be deemed to be the interest payable on such securities in accordance with the terms thereof plus any amount required to be paid by the Authority to the Qualified Swap Provider pursuant to the Qualified Swap or 5. 535681.003401.019
Qualified Variable Rate Swap and minus any amount required to be paid by the Qualified Swap Provider to the Authority pursuant to the Qualified Swap or the Qualified Variable Rate Swap, or (b) for purposes of computing combined average annual principal and interest requirements for any Bond Reserve Account, and for purposes of computing the maximum annual principal and interest requirements, the interest payable on variable rate parity securities with respect to which a Qualified Swap is in effect and the interest payable on parity securities with respect to which a Qualified Variable Rate Swap is in effect shall be calculated as provided in Section 703 D. No computation of Bond Requirements under this Instrument shall take into account payments due the Qualified Swap Provider on the termination of the Qualified Swap or Qualified Variable Rate Swap unless such payments on termination are then unconditionally due and payable in accordance with the terms of the related Qualified Swap or Qualified Variable Rate Swap.
For purposes of computing the Bond Requirements of a Qualified Swap or a Qualified Variable Rate Swap with respect to which no parity securities remain Outstanding or of that portion of a Qualified Swap or a Qualified Variable Rate Swap with respect to which the notional amount is greater than the principal amount of Outstanding parity securities to which such Qualified Swap or a Qualified Variable Rate Swap relates, (a) for purposes of Article 5 hereof, the interest payable thereon shall be deemed to be the net amount positive or negative, if any, required to be paid by the Authority to the Qualified Swap Provider pursuant to the Qualified Swap or the Qualified Variable Rate Swap, and (b) for purposes of any computation of Bond Requirements for a period after the date of computation, the interest payable thereon shall be deemed to be the net amount most recently paid, as of the date of computation, by the Authority to the Qualified Swap Provider thereunder or (expressed as a negative number) by the Qualified Swap Provider to the Authority thereunder.
(16) “Bond Reserve Account” means the separate subaccount heretofore created and designated as the “Reno-Tahoe Airport Authority, Nevada Airport System Parity Revenue Securities, Reserve Account,” and after the defeasance of the 2005 Bonds, the Bond Reserve Account is renamed as set forth in Section 502 C herein and may include separate debt service reserve fund subaccounts created for individual series of parity securities hereafter issued if required by the supplemental instrument authorizing the issuance of such series of parity securities.
(17) “Bond Year” for the purposes of this Instrument means the 12 months commencing on July 2nd of any calendar year and ending on July 1st of the next succeeding calendar year.
6. 535681.003401.019
(18) “Budget Act” means NRS 354.470 through 354.626, and all laws amendatory thereof, and is designated in NRS 354.470 thereof as the Local Government Budget Act.
(19) “Budget Year” means the Fiscal Year for which a budget is being prepared.
(20) “Business Day” means any day banks in New York, New York are not authorized or required to be closed.
(21) “Chairman” means the de jure or de facto chairman of the Board and the Authority and chosen as such officer by the Board from the Trustees, and means the de jure or de facto vice chairman of the Board and the Authority whenever the chairman of the Board and the Authority is unable to act in such capacity, and the defined term means his successor in functions, if any.
(22) “Chief Financial Officer” means the de jure or de facto chief financial officer of the Issuer, designated as such by the Issuer, and means the de jure or de facto chief financial officer or acting chief financial officer, if any, of the Issuer whenever the chief financial officer is unable to act in such capacity, or the successor of the chief financial officer in functions, if any.
(23) “combined average annual principal and interest requirements” means (i) the sum of the Bond Requirements of the 2015 Bonds and any other parity securities payable from the Net Revenues, which Bond Requirements come due during any Bond Year from the date of calculation to the last day on which any of the then Outstanding parity securities are due and payable, but not including any securities which are no longer Outstanding under the defeasance provisions of Section 1201 hereof and not including the Bond Requirements of any parity Letter of Intent Bonds that are scheduled to be paid from Federal grants, (ii) divided by the number of years (including any fraction thereof) from the date of the calculation of the combined average annual principal and interest requirements to the last day on which any of the then Outstanding parity securities are due and payable. If any parity security bears interest at a variable interest rate and is not covered by a Qualified Swap, the rate of interest used in the foregoing test shall be the lesser of the maximum permitted rate of interest on those parity securities or a rate equal to the “25 Bond Revenue Index” as most recently published in The Bond Buyer prior to the date a firm offer to purchase the then proposed parity securities is accepted by the Authority or if such index is no longer published, such other similar long-term bond index as the Authority reasonably selects. If any parity security is covered by a Qualified Variable Rate Swap, the rate of interest used in the foregoing test shall be a rate equal to the “25 Bond Revenue Index” as most recently published in The Bond Buyer prior to the date a firm offer to purchase the then proposed parity securities is accepted by the 7. 535681.003401.019
Authority or if such index is no longer published, such other similar long-term bond index as the Authority reasonably selects.
(24) “combined maximum annual principal and interest requirements” means the maximum sum of the principal of and the interest (including any payments to be made (positive or negative) on any Qualified Swap or Qualified Variable Rate Swap as provided in the definition of “Bond Requirements”) on the 2015 Bonds and any other parity securities, falling due during any one succeeding Bond Year for the period beginning with the Bond Year in which such computation is made and ending with the Bond Year in which any Bonds last become due and payable but not including any securities which are no longer Outstanding under the defeasance provisions of Section 1201 hereof, and not including the Bond Requirements of any parity Letter of Intent Bonds which are scheduled to be paid from Federal grants. If any parity security bears interest at a variable interest rate and is not covered by a Qualified Swap, or if any parity security is covered by a Qualified Variable Rate Swap, the rate of interest used in determining the “combined maximum principal and interest requirements” of such parity securities shall be calculated as provided in Section 703 D.
(25) “Comparable Bond Year” means, in connection with any Fiscal Year, the Bond Year which commences in the Fiscal Year. For example, for the Fiscal Year commencing on July 1, 2015, and ending on June 30, 2016, the Comparable Bond Year commences on July 2, 2015, and ends on July 1, 2016.
(26) “Completion Bonds” means, any parity bonds or parity securities issued in accordance with Section 703 hereof for the purpose of defraying additional costs of one or more improvement projects financed by parity bonds or parity securities, the principal amount of which does not exceed 15% of the aggregate principal amount of such parity bonds or parity securities initially issued to finance such improvement projects. . (27) “Consulting Engineer” means the Senior Engineer, any registered or licensed professional engineer, any firm of such engineers, any licensed professional architect, or any firm of such architects, as from time to time determined by the Issuer, which Person or Persons (other than the Senior Engineer) shall:
(a) Have a wide and favorable reputation for skill and experience in the field of designing, preparing plans and specifications for, and supervising construction of, airports and airport facilities;
(b) Be entitled to practice and are practicing as such under the laws of the State; and
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(c) Be selected, retained, and compensated by the Board, in the name and on behalf of the Issuer, and who may be in the regular employ or control of the Issuer.
The Consulting Engineer may also be the Project Engineer.
(28) “Cost of Issuance Account” means the separate account designated as the “Reno-Tahoe Airport Authority, Nevada, Airport Revenue Refunding Bond, Series 2015, Cost of Issuance Account”, created in Section 401 herein.
(29) “County” means the County of Washoe, in the State, and constituting a political subdivision thereof, or any successor municipal corporation; and where the context so indicates, such term means the geographical area comprising the County of Washoe.
(30) “Customer Facility Charge” means the charge imposed on and collected from a rental car customer pursuant to a rental car contract between such customer and a rental car provider at the Airport System, which is required to be remitted to the Authority.
(31) “disposal” or “dispose” means the sale, destruction, razing, loan, lease, grant, transfer, assignment, option to sell, other contract, other disposition, or any combination thereof, of the Airport System, other property, or any interest therein.
(32) “Emergency Capital Amount” means the amount designated by the President/CEO as a continuing reserve to be deposited, accumulated, reaccumulated, and maintained in the Renewal and Replacement Account by Section 513 hereof.
(33) “equip” or “equipment” means the furnishing of all related or appurtenant machinery, furnishings, apparatus, paraphernalia, or other gear, or any combination thereof, pertaining to the Airport System, or other property, or any interest therein.
(34) “events of default” means the events stated in Section 1303 hereof.
(35) “Feasibility Report” means the report submitted by the Airport Consultant.
(36) “Federal Government” means the United States, or any agency, instrumentality, or corporation thereof.
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(37) “Federal Securities” means bills, certificates of indebtedness, notes, bonds, or similar securities which are direct obligations of, or the principal and interest of which securities are unconditionally guaranteed by, the United States.
(38) “Financial Advisor” means any Person which is retained by the Issuer to render to it fiscal advice and to perform financial services in connection with the 2015 Bonds and the Airport System.
(39) “Fiscal Year” for the purposes of this Instrument means the 12 months commencing on July 1st of any calendar year and ending on June 30th of the next succeeding calendar year; but if the Nevada Legislature changes the statutory fiscal year relating to the Authority, the Fiscal Year shall conform to such modified statutory fiscal year from the time of each such modification.
(40) “gaming” means the operation or maintenance for play of any banking or percentage game played with cards, dice, or any mechanical device or machine for money, property, checks, credit, or any representative for value.
(41) “General Purpose Account” means the special and separate account heretofore created, continued herein and designated as the “Reno-Tahoe Airport Authority, Nevada, Airport System General Purpose Account.”
(42) “Gross Revenues” means all income and revenues received or accrued under generally accepted accounting principles derived directly or indirectly by the Issuer from the operation and use of and otherwise pertaining to the Airport System, including, without limitation, all rentals, fees, and other charges for the use of the Airport System, or for any service rendered by the Issuer in the operation thereof, revenues from any gaming at the Airport System, Federal Grants in anticipation of which Letter of Intent Bonds are issued (and PFC’s (as defined below) received in lieu of those Federal grants as described in the last sentence of clause (d) of this definition), interest and other gain from any investment of moneys accounted for in the various accounts herein provided (other than a construction fund, acquisition fund or any other like account pertaining to securities payable from Pledged Revenues and other than the Refunding Account or any other like account as provided in the 2005 Bond Resolution and this Instrument), any loss-of-use insurance proceeds, and any surplus proceeds of bonds or other unrestricted surplus moneys credited to the Revenue Fund, but
(a) Excluding any moneys borrowed and used for the acquisition of capital improvements;
(b) Excluding any moneys received as grants, appropriations, or gifts from the United States (except Federal grants in anticipation of 10. 535681.003401.019
which Letter of Intent Bonds are issued), the State, or other sources, the use of which is limited by the grantor or donor to the construction of capital improvements for the Airport System, except to the extent any such moneys shall be received as payments for the use of the Airport System;
(c) Excluding any revenues derived from any Special Facilities other than ground lease rentals pertaining to such Special Facilities located at the Airport System and any moneys paid to the Issuer in lieu of such ground rentals, so long as the Special Facilities Bonds pertaining thereto are Outstanding;
(d) Excluding the proceeds of any passenger facility charge, head tax or other passenger charge (a “PFC”) fixed and collected by the Issuer in accordance with law except to the extent the laws pursuant to which such charge is levied permit its use in a manner consistent with the use of Gross Revenues or Net Revenues hereunder and the Authority hereafter determines to include all or a portion of such proceeds in Gross Revenues, in which case the designated portion of such revenues shall thereafter be included in Gross Revenues. If parity Letter of Intent Bonds are issued and Outstanding and any portion of the Federal grants in anticipation of which those Letter of Intent Bonds were issued is reduced because of the imposition or receipt of PFC’s, then the PFC’s so received in lieu of such Federal grants shall be included in Gross Revenues and shall be treated as Federal grants in anticipation of which Letter of Intent Bonds are issued for all purposes of this Resolution; and
(e) Excluding the proceeds of any Customer Facility Charge unless the Authority hereafter determines to include all or a portion of such proceeds in Gross Revenues, in which case the designated portion of such revenues shall thereafter be included in Gross Revenues.
For purposes of the Rate Maintenance Covenant in Section 1001 herein “Gross Revenues” shall exclude Federal grants in anticipation of which parity Letter of Intent Bonds are issued to the extent that the Bond Requirements of those Letter of Intent Bonds are excluded in making the coverage calculations required by those sections.
(43) “hereby,” “herein,” “hereinabove,” “hereinafter,” “hereinbefore,” “hereof,” “hereto,” “hereunder,” or any similar term refer to this Instrument and not solely to the particular portion thereof in which such word is used; “heretofore” means before the adoption of this Instrument; and “hereafter” means after the adoption of this Instrument.
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(44) “holder,” or any similar term, when used in conjunction with any 2015 Bonds, or any other designated securities, means the registered owner of any 2015 Bond or other security which is registered for payment.
(45) “improve” or “improvement” includes the extension, widening, lengthening, betterment, alteration, reconstruction, or other major improvement, or any combination thereof, of the Airport System, or the acquisition of any properties pertaining to the Airport System, or an interest therein, but does not mean renovation, reconditioning, patching, general maintenance, or other minor repair occurring periodically at annual or shorter intervals.
(46) “Independent Accountant” means any certified public accountant, or any firm of certified public accountants, duly licensed to practice and practicing as such under the laws of the State, as from time to time appointed and compensated by the Board on the behalf and in the name of the Issuer:
(a) Who is, in fact, independent and not under the domination of the Issuer;
(b) Who does not have any substantial interest, direct or indirect, with the Issuer; and
(c) Who is not connected with the Issuer as an officer or employee thereof, but who may be regularly retained to make annual or similar audits of any books or records of the Issuer.
(47) “Instrument” means this resolution, cited in Section 101 hereof by the short title “2015 Refunding Bond Resolution”; and the term “instrument of the Issuer,” “instrument of the Board,” “amendatory instrument,” “supplemental instrument,” or any phrase of similar import, means any resolution adopted by the Board on behalf of the Issuer.
(48) “Interest Account” means the special and separate subaccount within the Bond Fund, heretofore created, continued herein and designated as the “Reno-Tahoe Airport Authority, Nevada Airport System Parity Revenue securities, Interest Account.”
(49) “I.R.C.” or “Tax Code” means the Internal Revenue Code of 1986, as from time to time amended and the regulations promulgated thereunder.
(50) “Issuer” means the Authority.
(51) “Letter of Intent” means a letter from the Federal government stating its intent to make a grant, the principal amount of the grant and the
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expected timing of the receipt of monies, the project for which the grant is to be made, and any conditions to the receipt of the grant.
(52) “Letter of Intent Bonds” means bonds issued by the Issuer, a portion of the principal of and interest on which is expected to be retired with Federal government grant monies expected to be received by the Issuer as evidenced by a Letter of Intent. At the time Letter of Intent Bonds are issued, the Issuer shall prepare and file with the Trustee a schedule showing the dates on which the grants are expected to be received in accordance with the Letter of Intent are scheduled to pay the Bond Requirements of such Letter of Intent Bonds. No grant receipts shall be scheduled to pay Bond Requirements earlier than 1 year after the date on which the grant is expected to be received as stated in the Letter of Intent from the Federal government.
(53) “Minimum Operation and Maintenance Reserve” means at any time in each Fiscal Year an amount at least equal to one-sixth of the aggregate amount of the Operation and Maintenance Expenses of the Airport System for the Fiscal Year as fixed by the then current budget for that year, which minimum amount is required to be deposited, accumulated or reaccumulated, and maintained in the Operation and Maintenance Reserve Account pursuant to Section 512 hereof.
(54) “Minimum Securities Reserve” means the amount specified in the supplemental instrument authorizing parity securities hereafter issued, if such instrument requires the funding of a debt service reserve fund, and such amount is required to be deposited, accumulated or reaccumulated, and maintained in the Bond Reserve Account pursuant to Section 508 hereof.
(55) “Net Rent Lease” means a lease of property or facilities pertaining to the Airport System or Special Facilities entered into by the Issuer pursuant to which the lessee or licensee agrees to pay to the Issuer rentals during the term thereof, and to pay in addition all Operation and Maintenance Expenses pertaining to the leased facilities, including, without limitation, maintenance costs, insurance, and all property taxes and assessments now or hereafter lawfully levied, commonly known in the real estate business as a “100% net rental lease.”
(56) “Net Revenues” means the Gross Revenues remaining after the deduction of the “Operation and Maintenance Expenses,” of the Airport System, or any other facilities in connection with which the defined term is used.
(57) “NRS” means Nevada Revised Statutes, the State’s code of general laws.
(58) “Operation and Maintenance Expenses,” or any phrase of similar import, means all reasonable and necessary current expenses of the Issuer, paid or 13. 535681.003401.019
accrued, of operating, maintaining, and repairing the Airport System or any other designated facilities in connection with which such term is used; and the term includes, without limitation:
(a) Engineering, auditing, reporting, legal, and other overhead expenses relating to the administration, operation, and maintenance of the Airport System;
(b) Fidelity bond and property and liability insurance premiums pertaining to the Airport System, or a reasonably allocable share of a premium of any blanket bond or policy pertaining to the Airport System;
(c) Payments to pension, retirement, health, and hospitalization funds, and other insurance, and to any self-insurance fund as insurance premiums not in excess of such premiums which would otherwise be required for such insurance;
(d) Any general taxes, assessments, excise taxes, or other charges which may be lawfully imposed on the Issuer, the Airport System, revenues therefrom, or the Issuer’s income from or operations of any properties under its control and pertaining to the Airport System, or any privilege in connection with the Airport System or its operation;
(e) The reasonable charges of the Trustee, Paying Agent, Registrar and any other depositary bank pertaining to the 2015 Bonds and any other securities payable from Pledged Revenues or otherwise pertaining to the Airport System;
(f) Contractual services, professional services, salaries, other administrative expenses, and costs of materials, supplies, repairs, and labor, pertaining to the Airport System or to the issuance of the 2015 Bonds or any other securities relating to the Airport System, including, without limitation, the expenses and compensation of the Trustee, any receiver, or other fiduciary under the Bond Act;
(g) The costs incurred by the Board in the collection and any refunds of all or any part of Pledged Revenues;
(h) Any costs of utility services furnished to the Airport System;
(i) Any lawful refunds of any Pledged Revenues;
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(j) The cost of funding any amount due the United States as rebate payments under Section 148(f), I.R.C., and the cost of calculating and verifying the amount of such rebate payments; and
(k) All other administrative, general, and commercial expenses pertaining to the Airport System; but
(i) Excluding any allowance for depreciation;
(ii) Excluding any costs of extensions, enlargements, betterments, and other improvements, or any combination thereof;
(iii) Excluding any reserves for major capital replacements, other than normal repairs;
(iv) Excluding any reserves for operation, maintenance, or repair of the Airport System;
(v) Excluding any allowance for the redemption of any bond or other security evidencing a loan or other obligation, or the payment of any interest thereon, or any prior redemption premium due in connection therewith;
(vi) Excluding any liabilities incurred in the acquisition or improvement of any properties comprising any project or any existing facilities, or any combination thereof, pertaining to the Airport System, or otherwise;
(vii) Excluding any expenses incurred by lessees or licensees under Net Rent Leases pertaining to the Airport System;
(viii) Excluding any Operation and Maintenance Expenses as hereinabove delineated in this paragraph but pertaining to Special Facilities; and
(ix) Excluding any liabilities imposed on the Issuer for any ground of legal liability not based on contract, including, without limitation, negligence in the operation of the Airport System.
(59) “Operation and Maintenance Account” means the special and separate account heretofore created, continued herein and designated as the “Reno-Tahoe Airport Authority, Nevada Airport System Operation and Maintenance Account.”
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(60) “Operation and Maintenance Reserve Account” means the special and separate account heretofore created, continued herein and designated as the “Reno-Tahoe Airport Authority, Nevada Airport System Operation and Maintenance Reserve Account.”
(61) “Other Available Moneys” means for any Fiscal Year the amount of money determined by the President/CEO or the Chief Financial Officer to be transferred by the Authority for that Fiscal Year from sources other than Gross Revenues to the Revenue Fund. Other Available Moneys may include the proceeds of any Customer Facility Charge or PFC if so determined by the President/CEO or the Chief Financial Officer and such proceeds are transferred by the Authority to the Revenue Fund.
(62) “Outstanding” when used with reference to the 2015 Bonds or any other designated securities and as of any particular date means all the 2015 Bonds or any such other securities payable from Pledged Revenues or otherwise pertaining to the Airport System, as the case may be, in any manner theretofore and thereupon being executed and delivered:
(a) Except any bond or other security canceled by the Issuer, by the Registrar, Paying Agent or otherwise on the Issuer’s behalf, at or before such date;
(b) Except any bond or other security for the payment or the redemption of which moneys at least equal to its Bond Requirements to the date of its maturity or any Redemption Date, whichever date is earlier, if any, shall have theretofore been deposited with a trust bank in escrow or in trust for that purpose, as provided in Sections 519 or 1201 hereof; and
(c) Except any bond or other security in lieu of or in substitution for which another bond or other security shall have been executed and delivered pursuant to Sections 306 or 1509 hereof.
(63) “parity bonds” or “parity securities” means bonds or securities pertaining to the Airport System and payable from Pledged Revenues on a parity with the Outstanding 2005 Bonds and 2015 Bonds.
(64) “Paying Agent” means U.S. Bank National Association, a “Banking Institution” and a “trust bank,” as herein defined, and designated by the Issuer as the paying agent for the 2015 Bonds, which commercial bank is also the “Registrar” hereunder and is an agent of the Issuer for the payment of the Bond Requirements of the 2015 Bonds and for other administration of moneys pertaining to the Issuer; and the term “Paying Agent” includes any successor Banking Institution as such a paying agent.
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(65) “Person” means a corporation, firm, other body corporate (including, without limitation, the Federal Government, the State, or any other body corporate and politic other than the Issuer), partnership, association, or individual, and also includes an executor, administrator, trustee, receiver, or other representative appointed according to law.
(66) “Pledged Revenues” means all or a portion of the Gross Revenues. The designated term indicates a source of revenues and does not necessarily indicate all or any portion or other part of such revenues in the absence of further qualification.
(67) “President/CEO” means the de jure or de facto President/CEO of the Issuer, and means any de jure or de facto President/CEO or acting President/CEO, if any, of the Issuer whenever the President/CEO is absent or is unable to act in such capacity, or the President/CEO’s successor in functions, if any.
(68) “Principal Account” means the special and separate subaccount within the Bond Fund, heretofore created, continued herein and designated as the “Reno-Tahoe Airport Authority, Nevada Airport System Parity Revenue Securities, Principal Account.”
(69) “Project” or “Refunding Project” means the refunding, payment and discharge of the Refunded Bonds.
(70) “Project Engineer” means the Senior Engineer, any registered or licensed professional engineer, any firm of such engineers, any licensed professional architect, or any firm of such architects, as from time to time determined by the Issuer, which Person or Persons (other than the Senior Engineer) shall:
(a) Have a wide and favorable repute for skill and experience in the field of designing, preparing plans and specifications for, and supervising the construction of, airports and airport facilities;
(b) Be entitled to practice and are practicing under the laws of the State; and
(c) Be selected, retained, and compensated by the Board, in the name and on behalf of the Issuer, and who may be in the regular employ or control of the Issuer.
The Project Engineer may also be the Consulting Engineer.
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(71) “Qualified Surety Bond” means any surety bond or any insurance policy which has liquidity features equivalent to an irrevocable and unconditional letter of credit, or any irrevocable and unconditional letter of credit, deposited in any Bond Reserve Account in lieu of or in partial substitution for monies on deposit therein, the issuer of which is rated at the time of deposit of such Qualified Surety Bond in either of the top two highest rating categories by whichever of Standard and Poor’s Ratings Service or Moody’s Investors Service as then has a rating in effect for the 2015 Bonds or both such rating agencies if both of them have a rating in effect for the 2015 Bonds.
(72) “Qualified Swap” means any financial arrangement (i) that is entered into by the Authority with an entity that is a Qualified Swap Provider at the time the arrangement is entered into; (ii) that provides that the Authority shall pay to such entity an amount based on the interest accruing at a fixed rate on an amount equal to a designated principal amount of variable interest rate parity bonds Outstanding as described therein, and that such entity shall pay to the Authority an amount based on the interest accruing on such principal amount at a variable rate of interest computed according to a formula set forth in such arrangement (which need not be the same as the actual rate of interest borne by such parity bonds) or that one shall pay to the other any net amount due under such arrangement; and (iii) which has been designated in writing to the Trustee by the Authority as a Qualified Swap with respect to such bonds.
(73) “Qualified Swap Provider” means a financial institution whose senior long term debt obligations, or whose obligations under a Qualified Swap or Qualified Variable Rate Swap are guaranteed by a financial institution whose senior long term debt obligations, are rated by whichever of Standard and Poors’ Ratings Service or Moody’s Investors Service as then has a rating in effect for the 2015 Bonds or both such agencies if both then have a rating in effect for the 2015 Bonds, at the time the subject Qualified Swap or Qualified Variable Rate Swap is entered into, at least “Aa2” in the case of Moody’s and “AA” in the case of Standard & Poor’s, or the equivalent thereof.
(74) “Qualified Variable Rate Swap” means any financial arrangement (i) that is entered into by the Authority with an entity that is a Qualified Swap Provider at the time the arrangement is entered into; (ii) that provides that the Authority shall pay to such entity an amount based on the interest accruing at a variable rate on an amount equal to a designated principal amount of parity bonds Outstanding as described therein, and that such entity shall pay to the Authority an amount based on the interest accruing on such principal amount at a variable or fixed rate of interest computed according to a formula set forth in such arrangement (which need not be the same as the actual rate of interest borne by such parity bonds, or that one shall pay to the other any net amount due under
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such arrangement; and (iii) which has been designated in writing to the Trustee by the Authority as a Qualified Variable Rate Swap with respect to such bonds.
(75) “Redemption Date” means the date fixed for the redemption prior to their respective fixed maturity dates of any bonds or other designated securities payable from Pledged Revenues or other moneys pertaining to the Airport System or any Special Facilities in any notice of prior redemption, or otherwise fixed and designated by the Issuer.
(76) “Redemption Price” means, when used with respect to a bond or other designated security payable from Pledged Revenues or other moneys pertaining to the Airport System or any Special Facilities, the principal amount thereof plus accrued interest thereon plus the applicable premium, if any, payable upon the redemption thereof prior to the stated fixed maturity date of such bond or other security on a Redemption Date in the manner contemplated in accordance with the security’s terms.
(77) “Refunded Bonds” means the 2005 Bonds designated by the Chief Executive Officer, or in her absence the Chief Financial Officer, in the Certificate of the Chief Executive Officer.
(78) “Registrar” means the Paying Agent, i.e., U.S. Bank National Association, which bank is required to keep records for the registration, transfer, and exchange of the 2015 Bonds or any successor thereof.
(79) “Renewal and Replacement Account” means the special and separate account heretofore created, continued herein and designated as the “Reno-Tahoe Airport Authority, Nevada Airport System Renewal and Replacement Account.”
(80) “Revenue Fund” means the special and separate account heretofore created, continued herein and designated as the “Reno-Tahoe Airport Authority, Nevada, Airport System Gross Revenues Fund.”
(81) “Secretary” means the de jure or de facto secretary of the Board and the Authority and chosen as such officer by the Board, and means the de jure or de facto assistant secretary or acting secretary, if any, of the Board and the Authority whenever the secretary is unable to act in such capacity, the individual designated as secretary may be (but is not necessarily) a member of the Board and may be (but is not necessarily) the same individual as the Treasurer, and the defined term means his successor in functions, if any.
(82) “Senior Engineer” means the de jure or de facto engineer of the Issuer, if any, and designated as its senior engineer or a successor in functions, if any. 19. 535681.003401.019
(83) “Special Facilities” means structures, hangars, aircraft overhaul, maintenance, or repair shops, heliports, hotels, storage facilities, garages, other facilities, and appurtenances, being a part of or related to the Airport System, the cost of the construction or other acquisition of which Special Facilities is financed with the proceeds of Special Facilities Bonds issued pursuant to Article IX hereof.
(84) “Special Facilities Bonds” means the 2015 Bonds or other securities payable solely from all or a portion of the rentals received pursuant to a Net Rent Lease or Net Rent Leases pertaining to Special Facilities as provided in Article IX hereof.
(85) “Special Account” means the special and separate account heretofore created, continued herein and designated as the “Reno-Tahoe Airport Authority, Nevada, Airport System Special Account.”
(86) “State” means the State of Nevada, in the United States; and where the context so indicates, means the geographical area comprising the State of Nevada.
(87) “subordinate bonds” or “subordinate securities” means bonds or securities pertaining to the Airport System and payable from Pledged Revenues subordinate and junior to the lien thereon of the Outstanding 2005 Bonds, 2015 Bonds and any parity bonds or parity securities hereafter issued.
(88) “superior bonds” or “superior securities” means bonds or securities pertaining to the Airport System and payable from Pledged Revenues superior to the lien thereon of the Outstanding 2005 Bonds and 2015 Bonds.
(89) “Tax Code” means the I.R.C., as herein defined.
(90) “Transfers” means an amount determined by the Authority for any Fiscal Year which is transferred by the Authority from the General Purpose Account into the Revenue Fund in that Fiscal Year. In no event shall the amount of Transfers taken into account in any Fiscal Year under the rate maintenance covenant of Section 1001 herein or the parity securities tests of Section 703 herein exceed an amount equal to 0.25 times the amount of the Bond Requirements for the Comparable Bond Year which are taken into account in computing compliance with the rate maintenance covenant or Sections 7.03(B)(1)(b)(i) or 7.03(B)(2)(i) of the parity securities tests, except that any amounts that are credited toward airline rates and charges, under a revenue sharing or similar ratesetting approach, if deposited into the Revenue Fund in a Fiscal Year are not subject to the foregoing limit of 0.25 times the amount of the Bond Requirements.
(91) “Treasurer” means the de jure or de facto treasurer of the Board and the Authority and chosen as such officer by the Board, and means the de jure 20. 535681.003401.019
or de facto assistant treasurer or acting treasurer, if any, of the Board and the Authority whenever the treasurer is unable to act in such capacity, the individual designated as treasurer may be (but is not necessarily) a member of the Board and may be (but is not necessarily) the same individual as the Secretary, and the defined term means his successor in functions, if any.
(92) “trust bank” means the Trustee and any “Banking Institution,” as defined herein, which is also authorized to exercise and is exercising trust powers, and also means any branch of the Federal Reserve Bank.
(93) “Trustee” means U.S. Bank National Association, which bank is the fiduciary appointed by Section 1401 hereof, and the term “Trustee” includes any successor “trust bank,” as herein defined, which may at any time be substituted in its place as such a trustee.
(94) “Trustees” means members of the Issuer’s governing body, i.e., the Board.
(95) “United States” means the United States of America; and where the context so indicates, such term means the geographical area comprising the United States of America.
(96) “Vice Chairman” means the de jure or de facto vice chairman or the Board and the Authority and chosen as such officer by the Board from the Trustees, and the defined term means his successor in functions, if any.
B. Construction. This Instrument, except where the context by clear implication herein otherwise requires, shall be construed as follows:
(1) Words in the singular number include the plural, and words in the plural include the singular.
(2) Words in the masculine gender include the feminine and the neuter, and when the sense so indicates words of the neuter gender refer to any gender.
(3) Articles, sections, subsections, paragraphs, and subparagraphs mentioned by number, letter, or otherwise, correspond to the respective articles, sections, sub-sections, paragraphs, and subparagraphs of this Instrument so numbered or otherwise so designated.
(4) The titles and leadlines applied to articles, sections, and subsections of this Instrument are inserted only as a matter of convenience and ease in reference and in no way define, limit, or describe the scope or intent of any provisions of this Instrument.
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(5) Any 2015 Bonds held by the Issuer shall not be deemed to be Outstanding for the purpose of redemption or Outstanding for the purpose of consents hereunder or for any other purpose provided herein.
Section 101. Successors. All of the covenants, stipulations, obligations, and agreements by or on behalf of and other provisions for the benefit of the Issuer or the Board contained herein shall bind and inure to the benefit of any successors thereof and shall bind and inure to the benefit of any officer, board, district, commission, authority, agent, or instrumentality to whom or to which there shall be transferred by or in accordance with law any right, power, or duty of the Issuer or the Board or of their respective successors, if any, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements, or other provisions hereof.
Section 102. Parties Interested Herein. Except as herein otherwise expressly provided, nothing herein expressed or implied is intended or shall be construed to confer upon or to give to any Person, other than the Issuer, the Board, the Trustees, the Paying Agent, the Trustee, the bond insurer, if any, and the holders from time to time of the Refunded Bonds and the 2015 Bonds, pertaining, including, without limitation, the Paying Agent in its capacity as a paying agent and as the Registrar, any right, remedy, or claim under or by reason hereof or any covenant, condition, or stipulation hereof. All the covenants, stipulations, promises, and agreements herein contained by and on behalf of the Issuer shall be for the sole and exclusive benefit of the Issuer, the Board, the Trustees, the Paying Agent, the Trustee, the bond insurer, if any, and any holder of any Refunded Bonds, or 2015 Bonds, except as herein otherwise provided.
Section 103. Ratification. All action heretofore taken (not inconsistent with the provisions of this Instrument) by the Board, the officers of the Issuer, any Financial Advisor, and otherwise by the Issuer directed:
A. Refunding Project. Toward the Refunding Project,
B. Bonds. Toward the sale and delivery of the Issuer’s 2015 Bonds for that purpose, and
C. Bond Insurance. Toward the purchase of the bond insurance policy, if any, from the bond insurer, if any, for the purpose of guaranteeing the payment of the principal of and interest on the 2015 Bonds,
be, and the same hereby is, ratified, approved, and confirmed.
Section 104. Instrument Irrepealable. In consideration of the purchase and acceptance of the 2015 Bonds by those who shall hold the same from time to time, after any of the 2015 Bonds are issued, this Instrument shall constitute an irrevocable contract between the Issuer and the holder or holders of the 2015 Bonds; and this Instrument (subject to the provisions of Section 1201 and of Article XV hereof), if any 2015 Bonds are in fact issued, shall be and shall remain
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irrepealable until the 2015 Bonds, as to all Bond Requirements, shall be fully paid, canceled, and discharged, except as herein otherwise expressly provided.
Section 105. Repealer. All bylaws, orders, and other instruments, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any bylaw, order, or other instrument, or part thereof, heretofore repealed.
Section 106. Severability. If any section, subsection, paragraph, clause, or other provision of this Instrument shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, subsection, paragraph, clause, or other provision shall not affect any of the remaining provisions of this Instrument.
Section 107. Execution of Instrument. This Instrument, immediately on its final passage and adoption, shall be recorded in the official records of the Issuer kept for that purpose, shall be executed by the signature of the Chairman, shall be attested by the Secretary, and the seal of the Issuer shall be affixed thereto.
Section 108. Effective Date. This Instrument shall be in effect upon its adoption and delivery of the 2015 Bonds.
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ARTICLE II
BOARD’S DETERMINATIONS, AUTHORITY FOR AND AUTHORIZATION OF PROJECT, NECESSITY OF PROJECT AND BONDS, PROJECT COST, OBLIGATION OF ISSUER, AND TERMS OF BOND SALE
Section 201. Authority for this Instrument. This Instrument is adopted by virtue of the Authority Act, the Bond Act, and pursuant to their provisions; and the Issuer has ascertained and hereby determines that each and every matter and thing as to which provision is made herein is necessary in order to carry out and to effectuate the purposes of the Issuer in accordance with the Authority Act and the Bond Act.
Section 202. Necessity of Project and Bonds. It is necessary and for the best interests of the Issuer and the inhabitants thereof, that the Issuer effect the Refunding Project and defray the cost thereof wholly or in part by issuing the 2015 Bonds therefor; and the Board hereby so determines and declares.
Section 203. Authorization of Project. The Board, on behalf of the Issuer, does hereby determine to refund, pay, and discharge the outstanding Refunded Bonds with the proceeds of the 2015 Bonds; and the Refunding Project is hereby so authorized.
Section 204. Estimated Cost of Project. The cost of the Refunding Project is estimated to equal at least the principal amount of the 2015 Bonds.
Section 205. Bonds Equally Secured. The covenants and agreements herein set forth to be performed on behalf of the Issuer shall be for the equal benefit, protection, and security of the holders of any and all of the Outstanding 2015 Bonds and any Outstanding parity securities payable from Pledged Revenues and heretofore or hereafter authorized, all of which, regardless of the time or times of their issue or maturity, shall be of equal rank without preference, priority, or distinction of any of the 2015 Bonds or other such securities over any other thereof, except as otherwise expressly provided in or pursuant to this Instrument.
Section 206. Special Obligations. All of the 2015 Bonds, as to all Bond Requirements, shall be payable and collectible solely out of the Net Revenues pertaining to the Airport System, which Net Revenues are so pledged; the holder or holders thereof may not look to any general or other fund for the payment of the Bond Requirements, except the herein- designated special funds pledged therefor; the 2015 Bonds shall not constitute an indebtedness or a debt within the meaning of any constitutional or statutory provision or limitation; and the 2015 Bonds shall not be considered or held to be general obligations of the Issuer but shall constitute its special obligations. The Issuer does not pledge its full faith and credit for the payment of the 2015 Bonds.
Section 207. Character of Agreement. None of the covenants, agreements, 24. 535681.003401.019 representations, and warranties contained herein or in the 2015 Bonds issued hereunder, in the
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absence of any breach thereof, shall ever impose or shall be construed as imposing any liability, obligation, or charge against the Issuer (except for the special funds pledged therefor) or its general credit, payable out of its general fund or out of any funds derived from taxation.
Section 208. No Pledge of Property. The payment of the 2015 Bonds is not secured by an encumbrance, mortgage, or other pledge of property of the Issuer, except the Net Revenues and any other moneys pledged for the payment of the 2015 Bonds. No property of the Issuer, subject to such exception, shall be liable to be forfeited or taken in payment of the 2015 Bonds.
Section 209. No Recourse against Officers and Agents. Pursuant to NRS 350.606, no recourse shall be had for the payment of the Bond Requirements of the 2015 Bonds or for any claim based thereon, or otherwise, upon this Instrument authorizing their issuance or any other instrument pertaining thereto, against any individual member of the Board or the Issuer, or any officer or other agent of the Issuer, past, present, or future, either directly or indirectly through the Board of the Issuer, or otherwise, whether by virtue of any constitution, statute, or rule of law, or by the enforcement of any penalty, or otherwise, all such liability, if any, being by the acceptance of the 2015 Bonds and as a part of the consideration of their issuance specially waived and released.
Section 210. Limitations upon State. Pursuant to NRS 350.610, the faith of the State is hereby pledged that the Authority Act, the Bond Act, any law supplemental or otherwise pertaining thereto, and any other act concerning the 2015 Bonds or other securities, Pledged Revenues, or any combination of such securities and such revenues, shall be neither repealed nor amended nor otherwise directly or indirectly modified in such a manner as to impair adversely any Outstanding securities of the Issuer until all such securities have been discharged in full or provision for their payment and redemption has been fully made.
Section 211. No Election or Other Preliminaries. The 2015 Bonds shall be issued without their being authorized at an election by any electors of the Issuer or without any other preliminaries being taken other than as herein otherwise provided.
Section 212. Acceptance of Offer. In accordance with the Bond Act, the Chief Executive Officer, or in her absence, the Chief Financial Officer, are authorized to execute the Certificate of the Chief Executive Officer.
Section 213. Terms of Bond Sale. The Chief Executive Officer, or in her absence the Chief Financial Officer, are authorized to accept the Purchaser’s offer to purchase the 2015 Bonds as provided in the Certificate of the Chief Executive Officer and in this Instrument; and the 2015 Bonds shall be sold and delivered to the Purchaser, in accordance with the Certificate of the Chief Executive Officer and this Instrument, bearing interest and otherwise upon the terms and conditions herein provided.
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ARTICLE III
AUTHORIZATION, TERMS, EXECUTION AND FORM OF BONDS
Section 301. Authorization of Bonds. The “Reno-Tahoe Airport Authority, Nevada, Airport Revenue Refunding Bond, Series 2015,” in the aggregate principal amount not to exceed the amount sufficient to effect the Refunding (which shall not exceed $22,000,000), payable as to all Bond Requirements solely out of the Net Revenues pertaining to the Airport System, are hereby authorized to be issued, pursuant to the Authority Act and the Bond Act; the Issuer pledges irrevocably, but not necessarily exclusively, the Net Revenues to the payment of the Bond Requirements of the 2015 Bonds; and the proceeds of the 2015 Bonds are to be used solely to defray wholly or in part the cost of the Refunding Project, except as herein otherwise provided.
Section 302. 2015 Bond Details. The 2015 Bonds shall be issued payable in fully registered form, i.e., registered as to both principal and interest and shall be dated as of the date of delivery of the 2015 Bonds. The 2015 Bonds shall be issued as a single Bond. The installments of principal of the Bond shall bear interest (calculated on the basis of a 360 day year consisting of twelve 30 day months) at the rates specified in the Certificate of the Chief Executive Officer, payable on January 1 and July 1 of each year, commencing on January 1, 2016. The installments of principal of the Bond shall be payable on the dates and in the principal amounts as set forth in the Certificate of the Chief Executive Officer (not to exceed 12 years from the date of delivery of the Bond).
The installments of principal and interest prior to final payment shall be payable to the registered owner thereof as shown on the registration records kept by the Registrar, and the registration panel appended to the Bond. The final payment shall be payable upon presentation and surrender of the Bond at the office of the Paying Agent or such other office as designated by the Paying Agent. If any installment of principal of the Bond shall not be paid on the date due, it shall continue to draw interest at the interest rate set forth in the Certificate of the Chief Executive Officer until the principal thereof is paid in full. Payment of principal of and interest on the Bond shall be made to the registered owner thereof by check or draft mailed by the Paying Agent, on or before each interest payment date (or, if such interest payment date is not a business day, on or before the next succeeding business day). The Paying Agent may make payments of principal and interest on the Bond by such alternative means as may be mutually agreed to between the registered owner of such Bond and the Paying Agent. All such payments shall be made in lawful money of the United States of America without deduction for any service charges of the Paying Agent or Registrar.
Section 303. Prepayment. The installments of principal of the Bond, maturing on and after the date set forth in the Certificate of the Chief Executive Officer, if any, shall be subject to prepayment, at the option of the Authority, on and after the date set forth in the Certificate of the Chief Executive Officer, if any, at a price equal to the principal amount
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prepaid, the accrued interest thereon to the redemption date, and a premium, if any, in the amount set forth in the Certificate of the Chief Executive Officer.
Section 304. Notice of Prepayment. Unless waived by any registered owner of a Bond, notice of prepayment shall be given by the Registrar, by first class, postage prepaid mail, at least 10 days prior to the date fixed for prepayment to the registered owner of the Bond at the address as it last appears on the registration records kept by the Registrar. Actual receipt of mailed notice by the registered owner shall not be a condition precedent to redemption. A certificate by the Registrar that notice of prepayment has been given as provided in this Section shall be conclusive as against all parties; and no owner may object thereto or may object to the cessation of interest on the prepayment date on the ground that he failed actually to receive such notice of prepayment.
Notwithstanding the provisions of this section, any notice of prepayment may contain a statement that the prepayment is conditional upon the receipt by the Paying Agent of funds on or before the date fixed for prepayment sufficient to pay the redemption price of the installments of the Bond so called for prepayment, and that if such funds are not available, such prepayment shall be canceled by written notice to the owner of the Bond called for prepayment in the same manner as the original prepayment notice was given.
Section 305. Negotiability. The 2015 Bonds shall be fully negotiable within the meaning of and for the purpose of the Uniform Commercial Code - Investment Securities and each owner shall possess all rights enjoyed by holders of negotiable instruments under the Uniform Commercial Code - Investment Securities.
Section 306. Registration, Transfer and Exchange of Bonds. The 2015 Bonds shall be subject to the following provisions relating to their registration, transfer and exchange:
A. Records for the registration and transfer of the 2015 Bonds shall be kept by the Registrar. Upon the surrender of any Bond at the Registrar, duly endorsed for transfer or accompanied by an assignment in form satisfactory to the Registrar duly executed by the owner or his or her attorney duly authorized in writing, the Registrar shall register the name of the transferee on the registration panel appended to the Bond.
B. The person in whose name any Bond shall be registered, on the registration records kept by the Registrar, shall be deemed and regarded as the absolute owner thereof for the purpose of payment and for all other purposes; and payment of or on account of either principal or interest on any Bond shall be made only to or upon the written order of the registered owner thereof or his or her legal representative. All such payments shall be valid and effectual to discharge the liability upon such Bond to the extent of the sum or sums so paid.
C. If any Bond shall be lost, stolen, destroyed or mutilated, the Registrar shall, upon receipt of such evidence, information or indemnity relating thereto as it or the Authority may reasonably require, and upon payment of all expenses in connection therewith, register and deliver a replacement Bond of a like principal amount. If such lost, 28. 535681.003401.019
stolen, destroyed or mutilated Bond shall have matured, or been called for prepayment, the Registrar may direct that such Bond be paid by the Paying Agent in lieu of replacement.
D. Whenever any Bond shall be surrendered to the Paying Agent upon payment thereof, or to the Registrar for transfer, exchange or replacement as provided herein, such Bond shall be promptly canceled by the Paying Agent or Registrar, and counterparts of a certificate of such cancellation shall be furnished by the Paying Agent or Registrar to the Board, upon request.
Section 307. Execution of Bonds. The 2015 Bonds shall be executed as follows:
A. Filings with Secretary of State. Pursuant to NRS 350.638 and to the act cited as the Uniform Facsimile Signatures of Public Officials Act, cited as chapter 351 of NRS, and prior to the execution of any 2015 Bonds by facsimile signature, the Chairman, the Treasurer, and the Secretary shall each file with the Secretary of the State of Nevada his manual signature certified by him under oath.
B. Manner of Execution. Pursuant to NRS 350.636, each Bond shall be signed and executed in the name and on behalf of the Issuer with the manual or reproduced facsimile of the signature of the Chairman, and shall be countersigned and executed with a manual or facsimile signature of the Treasurer; each Bond shall be authenticated with the manual or facsimile impression of the official seal of the Issuer; and each Bond shall be signed, subscribed, executed, and attested by the manual or facsimile signature of the Secretary.
Section 309. Use of Predecessor’s Signature. The 2015 Bonds bearing the signatures of the officers in office at the time of the signing thereof shall be the valid and binding obligations of the Issuer, notwithstanding that before the delivery thereof and the payment thereof or any or all of the individuals whose signatures appear thereon shall have ceased to fill their respective offices. Each the Chairman, the Treasurer, and the Secretary, at the time of the execution of the 2015 Bonds and of a signature certificate pertaining thereto the Chairman, the Treasurer, and the Secretary, respectively, may adopt as and for his own signature the signature of his predecessor in office if such signature appears upon any of the 2015 Bonds pertaining thereto.
Section 310. Registration of the Bonds. No 2015 Bond shall be valid or obligatory for any purpose unless the registration panel thereon, substantially in the form hereinafter provided, has been duly manually executed by the Registrar. By registering any of the 2015 Bonds initially delivered pursuant to this Resolution, the Registrar shall be deemed to have assented to all of the provisions of this Resolution.
Section 311. Incontestable Recital in Bonds. Pursuant to NRS 350.628, each 2015 Bond shall recite that it is issued pursuant to the Authority Act and to the Bond Act, which recital shall be conclusive evidence of the validity of the 2015 Bonds and the regularity of their issuance. 28. 535681.003401.019
Section 312. State Tax Exemption. Pursuant to Section 27, Authority Act, the 2015 Bonds and the income therefrom are exempt from all State, County, and municipal taxation, except for the tax on estates imposed pursuant to the provisions of chapter 375A of NRS and the tax on generation-skipping transfers imposed pursuant to chapter 375B of NRS.
Section 313. Bond Execution. The Chairman, the Treasurer, and the Secretary are hereby authorized and directed to prepare and to execute the 2015 Bonds as herein provided.
Section 314. Bond Delivery. After registration and execution, the Treasurer shall cause the 2015 Bonds to be delivered to the Purchaser thereof, upon payment being made therefor on the terms of the sale of the 2015 Bonds.
Section 315. Bond Form. Subject to the provisions of this Instrument, each 2015 Bond shall be, respectively, in substantially the following form, with such omissions, insertions, endorsements, and variations as to any recitals of fact or other provisions as may be required by the circumstances, be required or permitted by this Instrument, or be consistent with this Instrument and necessary or appropriate to conform to the rules and requirements of any governmental authority or any usage or requirement of law with respect thereto:
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(Form of Bond)
RENO-TAHOE AIRPORT AUTHORITY, NEVADA AIRPORT REVENUE REFUNDING BOND SERIES 2015
No. $
Interest Rate Maturity Date Dated As of
% per annum July 1, , 2015
PRINCIPAL AMOUNT: DOLLARS
The Reno-Tahoe Airport Authority, in Washoe County, in the State of Nevada (the “Authority”, “County”, and the “State”, respectively) for value received, hereby acknowledges itself to be indebted and for value received promises to pay to the registered owner specified on the registration panel appended to this Bond (the “Registered Owner”) the Principal Amount specified above, in installments of principal in the amounts and dates as provided in the resolution authorizing the issuance of this Bond adopted by the Board of Trustees of the Authority (the “Board”) on September 10, 2015 (the “Resolution”) and the Certificate of the Chief Executive Officer (as defined in the Resolution), together with interest on the unpaid installments of principal from the date of delivery of this Bond appearing above until payment of such installments of principal shall have been discharged as provided in the Resolution, at the interest rate per annum stated above, being payable on January 1 and July 1 of each year, commencing on January 1, 2016. The final payment of principal and interest on this Bond is payable upon presentation and surrender hereof at the office of U.S. Bank National Association, the Authority’s paying agent for the Bond (the “Paying Agent”), who is also now acting as the Authority’s Registrar for the Bond (the “Registrar”). Installments of principal and interest on this Bond will be paid on each payment date (or, if such payment date is not a business day, on the next succeeding business day), by check or draft mailed to the Registered Owner. If upon presentation at maturity payment of this Bond is not made as herein provided, interest shall continue at the rate specified in the Certificate of the Chief Executive Officer until the principal hereof is paid in full. All such payments shall be made in lawful money of the United States of America without deduction for any service charges of the Paying Agent or Registrar.
This Bond must be registered in the name of the Registered Owner as to both principal and interest on the registration records kept by the Registrar in conformity with the provisions stated herein and endorsed hereon and subject to the terms and conditions set forth in the Resolution. No transfer of this Bond shall be valid unless made on the registration panel appended to this Bond and the registration records maintained at the office of the Registrar by the Registered Owner or his or her attorney duly authorized in writing
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The Authority and the Registrar and Paying Agent may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of payment and for all other purposes, except to the extent otherwise provided hereinabove and in the Resolution.
This Bond is issued by the Authority upon its behalf and upon the credit thereof, for the purpose of defraying wholly or in part the cost of refunding, paying and discharging certain outstanding bonds of the Authority (the “Project”), under the authority of and in full compliance with the Constitution and laws of the State, and pursuant to the Resolution.
The Bonds are issued pursuant to the chapter 474, Statutes of Nevada, 1977 (the “Authority Act); pursuant to Nevada Revised Statutes (“NRS”) Sections 350.500 through 350.720, and all laws amendatory thereof designated in Section 350.500 thereof as the Local Government Securities Law (the “Bond Act”); pursuant to NRS chapter 348 (the “Supplemental Bond Law”); and pursuant to Section 350.628, Bond Act, this recital is conclusive evidence of the validity of the Bonds and the regularity of their issuance; and pursuant to Section 27, Authority Act, the Bonds and the income therefrom are exempt from all State, County, and municipal taxation, except for the tax on estates imposed pursuant to chapter 375A of NRS and the tax on generation skipping transfers imposed pursuant to chapter 375B of NRS.
[This Bond, or portions thereof, is subject to prepayment, as set forth in the Resolution.
Prepayment shall be made upon not less than 10 days’ notice given in the manner and upon the conditions provided in the Resolution. If this Bond is called for prepayment and payment is duly provided for as specified in the Resolution, interest shall cease to accrue hereon from and after the date fixed for redemption.]
The Bonds do not constitute a debt or an indebtedness of the Authority within the meaning of any constitutional or statutory provision or limitation, and shall not be considered or held to be general obligations of the Authority. The Authority has not pledged its full faith and credit for the payment of the Bonds. The Bonds are special obligations and are payable and collectible solely out of and are secured by an irrevocable pledge of the gross revenues (the “Gross Revenues”) derived from the operation and use of, and otherwise pertaining to, certain airport facilities of the Authority (herein the “Airport System”), after provision is made for the payment of all necessary and reasonable Operation and Maintenance Expenses of the Airport System (the “Net Revenues”), which Net Revenues are so pledged, as more specifically provided in the Resolution; and the holder hereof may not look to any general or other fund for the payment of the principal of, interest on, and any prior redemption premiums due on this Bond (the “Bond Requirements”) of this obligation except the special funds pledged therefor.
Payment of the Bond Requirements due in connection with the Bonds shall be made solely from and as security for such payment there are irrevocably (but not exclusively) pledged, pursuant to the Resolution three special and separate subaccounts identified as the “Reno-Tahoe Airport Authority, Nevada, Airport System Parity Revenues Securities, Interest 31. 535681.003401.019
Account,” the “Reno-Tahoe Airport Authority, Nevada, Airport System Parity Revenue Securities, Principal Account,” and the “Reno-Tahoe Airport Authority, Nevada, Airport System Parity Revenue Securities, Reserve Account,” which three subaccounts are within the special and separate account continued in the Resolution, and identified as the “Reno-Tahoe Airport Authority, Nevada, Airport System Parity Revenue Securities, Interest and Principal Retirement Fund” (the “Bond Fund”), into which three subaccounts within the Bond Fund the Authority covenants to pay from the Net Revenues sums sufficient to pay when due the Bond Requirements of the Bonds and any additional parity securities heretofore or hereafter issued and payable from such Net Revenues.
The Bonds are equally and ratably secured by a lien on the Net Revenues, and the Bonds constitute an irrevocable and first lien (but not necessarily an exclusively first lien) upon the Net Revenues, on a parity with the lien thereon of the outstanding 2005 Bonds (as defined in the Resolution) and any other parity bonds hereafter issued. Bonds and other securities, in addition to the 2005 Bonds and the Bonds, subject to expressed conditions, may be issued and made payable from the Net Revenues of the Airport System having a lien thereon subordinate and junior to the lien or, subject to additional expressed conditions, having a lien thereon on a parity with the lien of the Bonds, in accordance with the provisions of the Resolution. No bonds or other securities, may be issued with a lien on the Net Revenues that is superior to the lien thereon of the Bonds.
Reference is made to the Resolution and to the Bond Act, for an additional description of the nature and extent of the security for the Bonds, the accounts, funds, or revenues pledged, the nature and extent and manner of enforcement of the pledge, the rights and remedies of the registered owners of the Bonds with respect thereto, the terms and conditions upon which the Bonds are issued, and a statement of rights, duties, immunities, and obligations of the Authority, and other rights and remedies of the owners of the Bonds.
To the extent and in the respects permitted by the Resolution, the provisions of the Resolution may be amended or otherwise modified by action of the Authority taken in the manner and subject to the conditions and exceptions prescribed in the Resolution. The pledge of Net Revenues under the Resolution may be discharged at or prior to the respective maturities or prior redemption of the Bonds upon the making of provision for the payment thereof on the terms and conditions set forth in the Resolution.
It is further certified, recited, and warranted that all the requirements of law have been fully complied with by the proper officers of the Authority in the issuance of this bond; that it is issued pursuant to and in strict conformity with the Constitution and laws of the State, and particularly under the terms and provisions of the Authority Act, the Bond Act, and all laws supplemental thereto, and with the Resolution; and that this Bond does not contravene any constitutional or statutory limitation.
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No transfer of this Bond shall be valid unless made on the registration records maintained at the principal office of the Registrar by the registered owner or his or her attorney duly authorized in writing.
No recourse shall be had for the payment of the Bond Requirements of this Bond or for any claim based thereon or otherwise in respect to the Resolution or other instrument pertaining thereto against any individual member of the Board, or any officer or other agent of the Authority, past, present, or future, either directly or indirectly through the Board or otherwise, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any penalty or otherwise, all such liability, if any, being by the acceptance of this Bond and as a part of the consideration of its issuance specially waived and released.
IN WITNESS WHEREOF, the Board of Trustees of the Reno-Tahoe Airport Authority, Nevada, in the County of Washoe and State of Nevada has caused this Bond to be executed in the name and on behalf of the Authority with the manual or facsimile signature of the Chairman, to be attested, signed and executed with a manual or facsimile signature of the Authority Secretary, has caused a manual or facsimile impression of the seal of the Authority to be affixed hereon, and has caused this Bond to be countersigned with the manual or facsimile signature of the Authority Treasurer, all as of , 2015.
RENO-TAHOE AIRPORT AUTHORITY
(Manual or Facsimile Signature) Chairman
Countersigned:
(Manual or Facsimile Signature) Airport Authority Treasurer
(MANUAL OR FACSIMILE SEAL)
Attest:
(Manual or Facsimile Signature) Airport Authority Secretary (End of Form of Bond)
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(Form of Registration Panel)
PROVISION FOR REGISTRATION AS TO PRINCIPAL AND INTEREST
This Bond must be registered as to both principal and interest on the registration records of the Authority, kept by U.S. Bank National Association, as Registrar. After registration as to principal and interest, the Registrar shall note such registration on such registration records and in the registration blank below, and the principal and interest on this Bond shall be paid to such Registered Owner. This Bond may be transferred by the Registered Owner or his or her legal representative only upon a duly executed assignment in form satisfactory to the Registrar, such transfer to be made on said registration records and endorsed hereon.
Every privilege, registration and transfer shall be exercised only in accordance with the authorizing Resolution and such reasonable rules and regulations as the Registrar may prescribe.
Date of Name of Signature Registration Registered Owner of Registrar
(End of Registration Panel)
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(Form of Assignment for Bonds)
For value received, the undersigned hereby sells, assigns and transfers unto the within Bond and hereby irrevocably constitutes and appoints attorney, to transfer the same on the records kept for registration of the within Bond, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
Name and address of transferee:
Social Security or other tax identification number of transferee:
NOTE: The signature to this Assignment must correspond with the name as written on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever.
NOTICE: TRANSFER FEES MUST BE PAID TO THE REGISTRAR IN ORDER TO TRANSFER OR EXCHANGE THIS BOND AS PROVIDED IN THE WITHIN-MENTIONED RESOLUTION.
(End of Form of Assignment for Bonds)
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ARTICLE IV
USE OF BOND PROCEEDS AND OTHER REVENUES, REFUNDING, AND NOTICE OF PRIOR REDEMPTION AND DEFEASANCE OF REFUNDED BONDS
Section 401. Disposition of Bond Proceeds.
A. The proceeds of the 2015 Bonds, upon the receipt thereof at any time, or from time to time, shall be applied in the following manner:
(1) Refunding Account. First, there shall be credited to the following separate account, hereby created and established, which account shall be under the control of the Trustee, to be known as the “Reno-Tahoe Airport Authority, Nevada, Airport Revenue Refunding Bond, Series 2015, Refunding Account” (herein the “Refunding Account”) an amount sufficient, together with other monies transferred therein (including any monies deposited therein from the debt service fund for the Refunded Bonds) to immediately pay, cancel and discharge the Refunded Bonds on the date of delivery of the Bond;
(2) Cost of Issuance Account. Second, all money, if any, remaining from the sale of the 2015 Bonds shall be credited to the special and separate account, hereby created and established, which account shall be under the control of the Issuer, to be known as the “Reno-Tahoe Airport Authority, Nevada, Airport Revenue Refunding Bond, Series 2015, Cost of Issuance Account” (the “Cost of Issuance Account”), for the purpose of paying, together with any other money made available thereof or and credited to the account, the incidental expenses incurred by the Issuer and relating to the 2015 Bonds and financing the Refunding Project.
Section 402. Exercise of Option - Refunded Bonds. Upon the delivery of the 2015 Bonds, the Board elects and hereby declares its intent to exercise on the behalf and in the name of the Issuer its option to redeem on the Refunded Bonds Redemption Date, all of the Refunded Bonds.
Section 403. Conditional Notice of Prior Redemption - Refunded Bonds. The conditional notice of prior redemption of the Refunded Bonds given by the paying agent and registrar for the Refunded Bonds in accordance with the resolution authorizing the issuance of the Refunded Bonds is hereby ratified, approved and confirmed.
Section 404. Purchaser Not Responsible for Project. The validity of the 2015 Bonds shall neither be dependent upon nor be affected by the validity or regularity of any proceedings relating to the Refunding Project. The Purchaser of the 2015 Bonds, any associate thereof, and any subsequent holder of the 2015 Bonds shall in no manner be responsible for the 36. 535681.003401.019 application or disposal by the Issuer or by any of the officers, agents, and employees of the
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Issuer of the moneys derived from the sale of the 2015 Bonds or of any other moneys herein designated.
Section 405. Lien on Bond Proceeds. The proceeds of the Bonds credited to the Cost of Issuance Account pursuant to Section 401 hereof shall be subject to a lien and pledge for the 2015 Bonds until such proceeds are expended to defray the incidental expenses of the Refunding Project pursuant to Section 406 hereof.
Section 406. Application of Cost of Issuance Account. The moneys in the Cost of Issuance Account, except as herein otherwise expressly provided, shall be used and paid out by the Issuer to defray the Cost of the Refunding, including, without limitation, amounts to be paid to the Trustee, and the Paying Agent, and for custodial fees, legal fees, accounting fees, printing costs, publication costs, rating fees and insurance of obligations. When all such incidental costs have been paid in full or adequate provision has been made therefor, the Treasurer shall transfer to the Interest Account within the Bond Fund all moneys, if any, in excess of the aggregate amount of such administrative costs remaining in the Cost of Issuance Account, which account shall be terminated upon the withdrawal of all moneys therefrom. The Issuer may defray any such administrative costs from time to time as Operation and Maintenance Expenses to the extent the moneys credited to the Cost of Issuance Account are insufficient therefor.
Section 407. Transfer to Refunding Account. There shall be transferred by the Trustee to the Refunding Account forthwith upon the delivery of the 2015 Bonds from the Bond Reserve Account, Interest Account and Principal Account within the Bond Fund, an amount equal to the balance of monies attributable to the Refunded Bonds then accumulated in those accounts at the time of the delivery of the 2015 Bonds.
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ARTICLE V
ADMINISTRATION OF AND ACCOUNTING FOR PLEDGED REVENUES
Section 501. Pledge Securing Bonds. Subject only to the right of the Issuer to cause amounts to be withdrawn and paid on account of Operation and Maintenance Expenses of the Airport System, the Gross Revenues and all moneys and securities paid or to be paid to or held or to be held in any account or subaccount under this article or under Section 401 hereof (other than the Refunding Account) are hereby pledged to secure the payment of the Bond Requirements of the 2015 Bonds. This pledge shall be valid and binding from and after the date of the first delivery of any 2015 Bonds; and the moneys, as received by the Issuer and hereby pledged, shall immediately be subject to the lien of this pledge without any physical delivery thereof, any filing, or further act. The lien of this pledge and the obligation to perform the contractual provisions hereby made shall have priority over any or all other obligations and liabilities of the Issuer, except for any Outstanding parity bonds and any other Outstanding securities hereafter authorized, the lien of which on the Net Revenues is on a parity with the lien thereon of the 2015 Bonds; and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the Issuer (except as herein otherwise provided) irrespective of whether such parties have notice thereof.
Section 502. Establishment of Trustee Accounts and Subaccounts. The Issuer hereby establishes and authorizes the following special and separate subaccounts within the Bond Fund, heretofore created and continued herein, which shall be held by the Trustee, and which are designated:
A. Interest Account. The “Reno-Tahoe Airport Authority, Nevada, Airport System Parity Revenue Securities, Interest Account” (herein the “Interest Account”);
B. Principal Account. The “Reno-Tahoe Airport Authority, Nevada, Airport System Parity Revenue Securities, Principal Account” (herein the “Principal Account”); and
C. Bond Reserve Account. The “Reno-Tahoe Airport Authority, Nevada, Airport System Reserve Account” (herein the “Bond Reserve Account”), if the applicable supplemental instrument authorizing parity securities hereafter issued requires the funding of a debt service reserve fund.
Section 503. Continuation of Issuer Accounts. The Issuer hereby reestablishes and reauthorizes the following special and separate accounts, which shall be under the control of the Issuer, which shall not be held by the Trustee (except in a capacity other than as Trustee, e.g., as custodian), and which are designated:
A. Revenue Fund. The “Reno-Tahoe Airport Authority, Nevada, Airport System Gross Revenues Fund” (herein the “Revenue Fund”);
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B. Operation and Maintenance Account. The “Reno-Tahoe Airport Authority, Nevada, Airport System Operation and Maintenance Account” (herein the “Operation and Maintenance Account”);
C. Operation and Maintenance Reserve Account. The “Reno-Tahoe Airport Authority, Nevada, Airport System Operation and Maintenance Reserve Account” (herein the “Operation and Maintenance Reserve Account”);
D. Renewal and Replacement Account. The “Reno-Tahoe Airport Authority, Nevada, Airport System Renewal and Replacement Account” (herein the “Renewal and Replacement Account”);
E. Special Account. The “Reno-Tahoe Airport Authority, Nevada, Airport System Special Account” (herein the “Special Account”); and
F. General Purpose Account. The “Reno-Tahoe Airport Authority, Nevada, Airport System General Purpose Account” (herein the “General Purpose Account”).
Section 504. Revenue Fund Deposits. So long as any of the 2015 Bonds shall be Outstanding, as to any Bond Requirements, the entire Gross Revenues, upon their receipt from time to time by the Issuer, shall be deposited at least weekly, as far as practicable, and shall be set aside and credited immediately to the Revenue Fund. In addition, the amount of any Transfers shall be credited by the Authority to the Revenue Fund. As long as the Revenue Fund is held by the Trustee, statements giving the amount of each such deposit shall be forwarded promptly by the Trustee to the Issuer and the Trustee shall be accountable only for moneys actually so deposited. Any moneys received by the Issuer from any source other than Gross Revenues for Operation and Maintenance Expenses may also be deposited in the Revenue Fund and subsequently transferred to the Operation and Maintenance Account therefor as hereinafter provided.
Section 505. Administration of Revenue Fund. So long as any of the 2015 Bonds hereby authorized shall be Outstanding, as to any Bond Requirements, each Fiscal Year the Revenue Fund shall continue to be administered, and the moneys on deposit therein shall continue to be applied in the order of priority, all as provided in Sections 506 through 515 hereof.
Section 506. Operation and Maintenance Expenses. First, as a first charge on the Revenue Fund, from time to time there shall be set aside in and credited to the Operation and Maintenance Account, moneys sufficient to pay Operation and Maintenance Expenses, as such expenses become due and payable, and thereupon they shall be promptly paid. Any surplus remaining at the end of the Fiscal Year and not needed for Operation and Maintenance Expenses shall be transferred for credit to the Revenue Fund and shall be used for the purposes thereof, as herein provided.
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Section 507. Bond Fund Payments for Interest and Principal. Second, and subject to the aforesaid provisions, from any moneys remaining in the Revenue Fund, there shall be concurrently credited to the Bond Fund, the following:
A. Interest Payments. Monthly, into the Interest Account, within the Bond Fund, commencing on the first day of the month immediately succeeding the delivery of any of the 2015 Bonds or any other parity securities hereafter issued and payable from the Bond Fund, an amount in substantially equal monthly installments necessary, together with any other moneys from time to time available therefor or from whatever source, to pay the next maturing installment of interest on the 2005 Bonds, the 2015 Bonds and any additional parity securities then Outstanding (including payments due on any Qualified Swap or Qualified Variable Rate Swap) and monthly thereafter, commencing on each interest payment date, the amount necessary to accumulate the next maturing installment of interest on the 2005 Bonds, the 2015 Bonds and any additional parity securities then Outstanding (including payments due on any Qualified Swap or Qualified Variable Rate Swap) in equal monthly installments prior to the due date thereof, except to the extent any other moneys are available therefor on the due date of such installment.
B. Principal Payments. Monthly, into the Principal Account, within the Bond Fund, commencing on the later of the first day of the month immediately succeeding the delivery of any of the 2015 Bonds or any parity securities hereafter issued and payable from the Bond Fund or 12 months prior to the first date on which the principal of such Bonds is due, an amount in substantially equal monthly installments necessary, together with any other moneys from time to time available therefor from whatever source, to pay the next maturing installment of principal of the 2005 Bonds, the 2015 Bonds and any additional parity securities then Outstanding, and monthly thereafter, commencing on each principal payment date, the amount necessary to accumulate the next maturing installment of principal of the 2005 Bonds, the 2015 Bonds and any such additional parity securities then Outstanding, in equal monthly installments prior to the due date thereof, except to the extent any other moneys are available therefor on the due date of such installment.
The moneys credited to the Interest Account and the Principal Account within the Bond Fund shall be used to pay the Bond Requirements of the 2015 Bonds, and any additional parity securities heretofore or hereafter issued as such Bond Requirements become due.
Section 508. Reserve Payments. Third, but subsequent to the payments into the Interest Account and the Principal Account within the Bond Fund, except as provided in Sections 509, 510 and 1141 hereof, from any moneys remaining in the Revenue Fund there shall be credited by the Trustee to a Bond Reserve Account within the Bond Fund, commencing or recommencing on the first day of the month next succeeding each date on which any parity securities hereafter authorized are delivered (if the applicable supplemental instrument authorizing such parity securities requires the funding of a debt service reserve fund), in 60 substantially equal monthly installments, an amount equal to the remainder of the Minimum Securities Reserve less the amount of any other moneys available therein and less the available balance of any Qualified Surety Bond which are accounted for in any Bond Reserve Account, to
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accumulate or reaccumulate, together with any moneys from any source other than Net Revenues deposited therein, and to maintain any Bond Reserve Account as a continuing reserve in an amount equal to the Minimum Securities Reserve, to meet possible deficiencies in the Interest Account and the Principal Account within the Bond Fund. No payment need be made into any Bond Reserve Account so long as the sum of the moneys therein plus the available balance of any Qualified Surety Bond shall equal not less than the Minimum Securities Reserve. The moneys in any Bond Reserve Account shall be accumulated or reaccumulated and maintained as a continuing reserve to be used, except as hereinafter provided in Sections 509 and 510 hereof, only to prevent deficiencies in the payment of the Bond Requirements of the any parity securities resulting from the failure to deposit into the Interest Account and the Principal Account within the Bond Fund sufficient funds to pay such Bond Requirements as the same accrue.
Section 509. Termination of Deposits. No payment need be made into the Interest Account, the Principal Account, or any Bond Reserve Account, or all or any other combination thereof, within the Bond Fund, if the amount in the Bond Fund totals a sum at least equal to all Bond Requirements of the Outstanding 2015 Bonds and any Outstanding parity securities, to their respective maturities or to any Redemption Date or Redemption Dates on which the Issuer shall have exercised or shall have obligated itself to exercise its option to redeem prior to their respective maturities the 2015 Bonds and any parity securities (or any part thereof) then Outstanding and thereafter maturing, whichever date is the earlier, if any, and both accrued and not accrued, in which case moneys in those 3 subaccounts in an amount at least equal to such Bond Requirements, except for any interest or other gain to accrue from any investment of moneys in Federal securities or otherwise pursuant to Article VI hereof from the time of any such investment to the time or respective times the proceeds of any such investment or deposit shall be needed for such payment, shall be used, together with any such gain from such investments, solely to pay such Bond Requirements as the same become due; and any moneys in excess thereof in those 3 subaccounts and any other moneys derived from the Pledged Revenues may be used in any lawful manner determined by the Board or the President/CEO.
Section 510. Defraying Delinquencies. If on an interest or principal payment date or date on which a payment under a Qualified Swap or Qualified Variable Rate Swap is due, there is not on deposit in the Interest Account and the Principal Account the full amount stated above, then an amount shall be paid into such subaccounts from any Bond Reserve Account equal to the difference between that paid from the Net Revenues and the full amount so stipulated. If any Bond Reserve Account contains a Qualified Surety Bond and cash, the cash in any Bond Reserve Account must be drawn down completely before any demand is made on a Qualified Surety Bond. If any Bond Reserve Account contains a Qualified Surety Bond issued by an insurer and a Qualified Surety Bond issued by another insurer, the Qualified Surety Bonds must be drawn down on a pro rata basis. The money so used shall be reimbursed to the provider of a Qualified Surety Bond which has been drawn upon and then replaced in any Bond Reserve Account from the first revenues thereafter received from the Net Revenues not required to be otherwise applied by Sections 506 through 508 hereof. If in any month the Issuer shall for any reason fail to pay into any Bond Reserve Account the full amount above stipulated from the Net Revenues, the difference between the amount paid and the amount so stipulated shall be paid 41. 535681.003401.019
therein from the first Net Revenues thereafter received and not required to be applied otherwise by Sections 506 through 508 hereof. The moneys in the Bond Fund shall be used solely and only for the purpose of paying the Bond Requirements of the 2015 Bonds and any additional parity securities then Outstanding; but any moneys at any time in excess of the Minimum Securities Reserve in any Bond Reserve Account may be withdrawn therefrom, and transferred from time to time to the Revenue Fund, and used as herein provided for moneys credited to such account; and also any moneys in the Bond Fund in excess of the Bond Requirements, both accrued and not accrued, to the respective maturities or any designated Redemption Date or Redemption Dates of the Outstanding 2015 Bonds and any parity securities, whichever due date is the earlier, if any, for any security, may be used as hereinabove provided in Section 509 hereof.
Section 511. Payment of Subordinate Securities. Fourth, and subject to the provisions hereinabove in this article, but subsequent to the payments required by Sections 507 and 508 hereof, and subject to the provisions of Section 518 hereof, as provided in Article VII hereof any moneys remaining in the Revenue Fund may be used by the Issuer acting by and through the Trustee for the payment of Bond Requirements of subordinate bonds or other subordinate securities payable from Pledged Revenues and hereafter authorized to be issued in accordance with Article VII and any other provisions herein supplemental thereto, including reasonable reserves for such securities, as the same accrue; but the lien of such subordinate bonds or other subordinate securities on the Net Revenues and the pledge thereof for the payment of such securities shall be subordinate to the lien and pledge of the 2015 Bonds herein authorized, as herein provided. (Any parity bonds or other parity securities heretofore or hereafter authorized to be issued shall be payable from the Bond Fund pursuant to Sections 507 through 510 hereof.)
Section 512. Operation and Maintenance Reserve Account. Fifth, and subject to the provisions hereinabove in this article, from any moneys remaining in the Revenue Fund there shall be credited to the Operation and Maintenance Reserve Account, an amount so that by the end of each Fiscal Year the amount in the account shall at least equal one-sixth (1/6) of the aggregate amount in the then current budget of the Operation and Maintenance Expenses of the Airport System for that year (herein the “Minimum Operation and Maintenance Reserve”). If, at the beginning of any Fiscal Year, the amount accounted for in the Operation and Maintenance Reserve Account is less than the Minimum Operation and Maintenance Reserve for the Fiscal Year as stated in the budget therefor, there shall be credited to the Operation and Maintenance Reserve Account, in 12 substantially equal monthly installments commencing on the first day of the Fiscal Year, an amount at least equal to the remainder of the Minimum Operation and Maintenance Reserve for the Fiscal Year less the amount accounted for in that account at the beginning of the Fiscal Year. No payment need be made into the Operation and Maintenance Reserve Account so long as the moneys therein shall then equal not less than the Minimum Operation and Maintenance Reserve. The moneys in the Operation and Maintenance Reserve Account shall be accumulated or reaccumulated and maintained as a continuing reserve to be used only to prevent deficiencies in the payment of the Airport System’s Operation and Maintenance Expenses resulting from the failure to deposit into the Operation and Maintenance Account pursuant to Section 506 hereof sufficient funds to pay such expenses as the same accrue
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and become due. If at any time the moneys credited to the Operation and Maintenance Account are not sufficient to pay Operation and Maintenance Expenses, the Issuer acting by and through the Chief Executive Officer may requisition the additional moneys needed therefor, and thereupon such money shall be withdrawn from the Operation and Maintenance Reserve Account and transferred to the Operation and Maintenance Account. Any moneys accounted for in the Operation and Maintenance Reserve Account and exceeding the Minimum Operation and Maintenance Reserve for the then current Fiscal Year may be transferred to and deposited in the Revenue Fund.
Section 513. Renewal and Replacement Account. Sixth, and subject to the provisions hereinabove in this article, from any moneys remaining in the Revenue Fund there shall be credited to the Renewal and Replacement Account, commencing on the first day of the month next succeeding any date on which the amount of $780,000.00 (the “Emergency Capital Amount”) is not fully accumulated, the sum of $10,000.00 per month on the first day of each month, unless and until the moneys in the Renewal and Replacement Account at least equal the Emergency Capital Amount. If the President/CEO determines that the aforesaid monthly payments and the Emergency Capital Amount are insufficient or excessive for the purposes for which the Renewal and Replacement Account is established, the monthly payments into that account shall be adjusted in the amount directed by the President/CEO until the aggregate amount so determined by the President/CEO is accumulated therein, but in no event at a rate less than $10,000.00 per month or in an amount less than $600,000.00 (except for any period during which the Emergency Capital Amount is being accumulated or reaccumulated). The Issuer shall expend moneys in the Renewal and Replacement Account only to make up deficiencies in the Bond Fund and to pay the cost of, and to create a reserve for the payment of the cost of, extraordinary maintenance, repairs, renewals, and replacements to the Airport System in the nature of emergencies or contingencies and as shall not be annually recurring in nature, as determined by the President/CEO, unless otherwise provided by the Board.
Section 514. Special Account. Seventh, and subject to the provisions hereinabove in this article, from any moneys remaining in the Revenue Fund there shall be withdrawn from the Revenue Fund, and credited each Fiscal Year to the Special Account, an amount in substantially equal monthly installments equal to the sum of that percent (which shall not be less than 35%) as is designated by the Authority of the gaming revenues for the Fiscal Year and pertaining to the Airport System. Such amounts shall be used for expenditure from time to time for any lawful purpose or purposes of the Issuer pertaining to the Issuer’s Airport System and any other airport facilities of the Issuer, and to be held as a reserve therefor. Expenditures from the Special Account shall be in accordance with an annual budget for the account established by the Issuer. At the beginning of each Fiscal Year any moneys accounted for in the Special Account, whether or not encumbered to pay obligations accrued and to accrue under any existing contract made by the Issuer prior to such Fiscal Year, shall remain in the Special Account for the purposes of the account designated above in this section, until expended for any such purposes.
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Section 515. General Purpose Account. Eighth, and subject to the payment of the provider of a Qualified Surety Bond of any interest on amounts advanced and any expenses incurred under the Qualified Surety Bond required to be paid pursuant to an agreement between the Authority and the provider of such Qualified Surety Bond, and subject to the provisions hereinabove in this article, from any moneys remaining in the Revenue Fund, at least annually by the end of each Fiscal Year, there shall continue to be set aside and credited to the General Purpose Account, on or before the last day of each Fiscal Year the remaining revenues in the Revenue Fund. Moneys accounted for in such account, as may be determined and directed from time to time by the President/CEO within budget limitations fixed by the Board, but subject to any limitations herein or in any other contract pertaining to such account, may be withdrawn in any priority for any one, all, or any other combination of the following, as the President/CEO may from time to time determine:
A. Capital Costs. To pay the costs of constructing or otherwise acquiring any betterments of, enlargement of, extensions of, or any other improvements to the Airport System, or any part thereof, and any equipment therefor, authorized by law;
B. Major Maintenance Costs. To pay the costs of extraordinary and major repairs, renewals, replacements, or maintenance items pertaining to any properties of the Airport System of a type not recurring annually or at shorter intervals and not defrayed as Operation and Maintenance Expenses;
C. Lawful Refunds. To make any lawful refund of any Pledged Revenues due any Person;
D. Bond Requirements. To pay any bonds or other securities pertaining to the Airport System and payable from the Net Revenues (regardless of whether such securities are secured by a lien thereon), including, without limitation, the 2015 Bonds, as to Bond Requirements and any other appurtenant charge, at the fixed maturity dates pertaining to such Bond Requirements, or any Redemption Date or Redemption Dates, or by purchase in the open market, or otherwise; and
E. Law Suits Obligations. To pay any obligations pertaining to the Airport System and arising from a judgment against the Issuer or any officer, employee, or other agent of the Issuer acting within the scope of his official duties, rights, or privileges, or the scope of his employment, as the case may be, in any suit, action, or special proceedings in equity or at law, in any court of competent jurisdiction, or a settlement by the Issuer of any claim to avoid or to settle such a suit, action, or special proceedings, except to the extent revenues are otherwise available to defray such an obligation, including, without limitation, insurance proceeds.
F. Lawful Purpose. For any other lawful purpose pertaining to the Airport System, as the Authority may determine including, without limitation, application of amounts as Transfers.
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Section 516. Application of General Purpose Account. Moneys shall be withdrawn from the General Purpose Account for any one, all, or other combination of such purposes designated in Section 515 hereof pursuant to any such directive of the President/CEO only upon warrants approved by the Board, drawn by the President/CEO or the Chief Financial Officer, and countersigned by the Chairman or the Treasurer, in the same manner that other claims against the Issuer are presented and paid. No such warrant for any sum for construction work shall be issued:
A. Completion Certificate. Until the Board has received a certificate from the Project Engineer certifying that such a sum is due and owing for materials supplied or work satisfactorily completed in substantial accordance with the plans and specifications for the work involved, and
B. Warrant Resolution. Until the Board has adopted a resolution accepting such certificate and directing the drawing of such warrant. A copy of each such warrant, any such certificate, and any such resolution required by this Section shall be promptly transmitted to the Chief Financial Officer together with a requisition of the Issuer signed by the President/CEO or the Chief Financial Officer directing the payment of the warrant. Upon the receipt of such requisition and any such accompanying documents, there shall be transferred from the General Purpose Account to the credit of a special and separate account in the name of the Issuer, an amount equal to the total of the amounts to be paid as set forth in such requisition, the amounts in such account to be held solely for the payment of the obligations set forth in the requisition. At the beginning of each Fiscal Year any moneys accounted for in the General Purpose Account, whether or not encumbered to pay obligations accrued and to accrue under any existing contract made by the Issuer prior to such Fiscal Year, or otherwise, shall remain in the General Purpose Account for the purposes of the account designated above in this section, until expended for any such purpose.
Section 517. Airport Fund and Accounts. There is hereby authorized to be continued a separate fund heretofore created and designated as the “Reno-Tahoe Airport Authority, Nevada, Airport Fund” (herein the “Airport Fund”), which fund consists of a self- balancing group of accounts, including, without limitation, the respective special and separate accounts and subaccounts herein designated, and constitutes an independent fiscal and accounting entity. Separate accounts and subaccounts (other than those herein designated) pertaining to the Airport Fund may from time to time be created, terminated, and otherwise modified, but in no manner inconsistent with the provisions of this Instrument.
Section 518. Repayment of Interaccount Loans. If the Issuer makes an Interaccount loan and transfer to any account or subaccount within the Airport Fund for the benefit of the Airport System to the extent hereby permitted, the Issuer’s obligation to repay the loan and any interest accruing thereon to the account from which the loan is made may be deemed by the Issuer to be outstanding revenue subordinate securities thereof payable from the Net Revenues as to the Bond Requirements of such obligation in accordance with Section 510 hereof at such time or times and in such amount or amounts as the Issuer may determine in
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accordance with an annual budget for such account or subaccount or as may otherwise be provided for the payment of such securities in this Instrument or any other instrument of the Issuer.
Section 519. Funds Held for Securities. The amounts held or applied for the payment of the Bond Requirements due on any date with respect to particular 2015 Bonds, any parity securities, including, without limitation, any subordinate securities and any securities payable from the General Purpose Account, pending such payment, shall be set aside and held in trust for the holders of the respective securities entitled thereto by any paying agent holding moneys for such payment; and for the purposes of this Instrument, such Bond Requirements, after the due date thereof, shall no longer be considered to be unpaid or Outstanding.
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ARTICLE
VI GENERAL
ADMINISTRATION
Section 601. Administration of Accounts. The separate accounts and subaccounts designated in Articles IV and V hereof shall be administered as provided in this article (but not any account under Section 1201 hereof).
Section 602. Places and Times of Deposits. Each of the separate accounts and subaccounts hereinabove designated in Article IV and V hereof shall be maintained as a book account and kept separate from all other accounts solely for the purposes herein designated therefor, except as otherwise expressly stated herein. The moneys accounted for in such separate book accounts and subaccounts shall be deposited in one bank account or more, except as herein otherwise provided. Nothing herein prevents the commingling of moneys accounted for in any two or more book accounts or book subaccounts, or both book accounts and book subaccounts, pertaining to the Airport System, the Pledged Revenues, proceeds of securities, other moneys, or to the fund pertaining to the Airport System and any other funds of the Issuer (each of which funds consists of a self-balancing group of accounts and constitutes an independent fiscal and accounting entity) in any bank account or any investment in Federal Securities hereunder (but not any account under Section 1201 hereof). Each such bank account shall be continuously secured to the fullest extent required or permitted by the laws of the State for the securing of public funds, subject to the provisions of Section 1403 hereof, and shall be irrevocable and not withdrawable by anyone for any purpose other than the purpose or purposes designated therefor. Each periodic payment shall be credited to the proper book account or subaccount not later than the date therefor herein designated, except that when any such date shall be a Saturday, Sunday, or a legal holiday, then such payment shall be made on or before the next preceding secular day. Notwithstanding any other provision herein to the contrary, collected moneys shall be deposited with the Paying Agent, and any other commercial Banking Institution designated as a paying agent for any securities heretofore or hereafter authorized to be issued and payable from Pledged Revenues (or any combination thereof), at least by the day of each interest payment date or any other due date herein designated sufficient to pay the Bond Requirements then becoming due on the Outstanding 2015 Bonds and any other Outstanding securities pertaining to the Airport System.
Section 603. Investment of Moneys. Any moneys in any account designated in Articles IV and V hereof (but not any account under Section 1201 hereof), and not needed for immediate use, may be invested or reinvested in any investments permitted under State law (the “permitted securities”) in accordance with written or verbal instructions, which are promptly followed in writing, of the President/CEO or the Chief Financial Officer, except as otherwise expressly stated herein. Such investments shall mature not later than the date or dates on which the Chief Financial Officer estimates the proceeds thereof will be needed, and, in any event, investments of amounts in any Bond Reserve Account shall mature within 5 years of the date of the investment. For the purposes of any such investment or reinvestment, securities shall be 47. 535681.003401.019 deemed to mature at the earliest date on which the obligor is, on demand, obligated to pay a fixed
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sum in discharge of the whole of such obligations. In making each such investment or reinvestment, the Trustee may rely upon such written or verbal instructions, which are promptly followed in writing, and shall be under no duty as to the propriety of the investment or reinvestment made in accordance with such instructions.
Section 604. Permitted Investments. The President/CEO and the Chief Financial Officer shall have no obligation to cause the making of any investment or reinvestment hereunder, unless any moneys on hand and accounted for in any one account exceeds $5,000.00 and at least $5,000.00 therein will not be needed for a period of not less than 60 days. In such event, the President/CEO or Chief Financial Officer shall cause the investment or reinvestment in permitted securities to the extent practicable not less than substantially all the amount which will not be needed during such 60-day period, except for any moneys on deposit in an interest- bearing account of a Banking Institution, regardless of whether such moneys on deposit are evidenced by a certificate of deposit, or otherwise; but the President/CEO and the Chief Financial Officer are not required to invest, or so to invest in such a manner, any moneys accounted for hereunder if any such investment would contravene the provisions of the Tax Code or any other investment limitation imposed by law upon the Issuer. The President/CEO or the Chief Financial Officer may cause the investment or reinvestment in any lawful manner any moneys on hand at any time even though he is not obligated to do so.
Section 605. Accounting for Investments. The securities so purchased as an investment or reinvestment of moneys in any such account or subaccount, as the case may be, shall be deemed at all times to be a part of the account or subaccount and held in trust therefor. Except as herein otherwise provided, any interest accruing thereon and any other gain realized therefrom, as well as any interest and other gain from the deposit of moneys in a Banking Institution shall be credited to the Revenue Fund (except as hereinafter provided) as such gain is received; and any loss in any account or subaccount resulting from any such investments and reinvestments in securities and from any such deposits in any Banking Institution shall be charged or debited to the Revenue Fund (except as hereinafter provided); but, so long as the 2015 Bonds or any parity securities, or both, are Outstanding, and except for amounts representing rebatable arbitrage for the purpose of Section 148(f), I.R.C., no such gain shall be transferred to the Revenue Fund at any time:
A. Interest Account. From the Interest Account prior to the dated date of the 2015 Bonds, if the moneys accounted for therein for the payment of the interest on the 2015 Bonds and any parity securities then Outstanding do not after any such transfer at least equal the amount of unpaid interest accruing to the dated date of the 2015 Bonds; or
B. Bond Reserve Account. From any Bond Reserve Account if the moneys accounted for therein do not after any such transfer at least equal the Minimum Securities Reserve.
No loss or profit in any account or subaccount on any investments or reinvestments in securities or any certificates of deposit shall be deemed to take place as a result
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of fluctuations in the market quotations of the investments, reinvestments, or certificates prior to the sale or maturity thereof. In the computation of the amount in any account or subaccount for any purpose hereunder, except as herein otherwise expressly provided, securities and certificates of deposit shall be valued at the cost thereof (including any amount paid as accrued interest at the time of purchase of the obligation) and other bank deposits shall be valued at the amounts deposited, exclusive of any accrued interest or any other gain to the Issuer until such gain is realized. The expenses of purchase, safekeeping, sale, and all other expenses incident to any investment or reinvestment of moneys pursuant to this article shall be accounted for as Operation and Maintenance Expenses of the Airport System and charged to the Operation and Maintenance Account as permitted by Section 503 hereof.
Section 606. Accelerated Payments. Nothing contained in Article V hereof prevents the accumulation in any account or subaccount herein designated of any monetary requirements at a faster rate than the rate or minimum rate, as the case may be, provided in Article V; but, subject to the provisions of Section 513 hereof, no payment shall be so accelerated if such acceleration shall cause the Board to default in the payment of any obligation of the Issuer pertaining to Pledged Revenues or the Airport System. Nothing herein contained requires in connection with Pledged Revenues received in any Fiscal Year the accumulation in any account or subaccount for the payment in the Comparable Bond Year of Bond Requirements due in connection with any series of bonds or other securities payable from Pledged Revenues and herein or hereafter authorized, in excess of such Bond Requirements due in such Comparable Bond Year, and of any reserves required to be accumulated and maintained therefor, and of any existing deficiencies, and payable from such account, as the case may be, except as may be otherwise provided herein.
Section 607. Payment of Bond Requirements. The moneys credited to any account or subaccount designated in Article V hereof for the payment of the Bond Requirements due in connection with any issue of bonds or other securities payable from Pledged Revenues and herein or hereafter authorized shall be used without requisition, voucher, warrant, further order, or authority (other than is contained herein), or any other preliminaries, to pay promptly the Bond Requirements payable from such account or subaccount as such securities become due, upon the respective Redemption Dates, if any, on which the Issuer is obligated to pay such securities, or upon the respective principal and interest fixed maturity dates of such securities, as provided therefor herein, or otherwise, except to the extent any other moneys are available therefor, including, without limitation, moneys accounted for in the Bond Fund.
Section 608. Payment of Redemption Premiums. Notwithstanding any other provision herein, this Instrument requires the accumulation in any account or subaccount designated in Article V hereof for the payment of any issue of bonds or other securities payable from Pledged Revenues of amounts sufficient to pay not only the principal thereof and interest thereon but also the prior redemption premiums due in connection therewith, as the same become due, whenever the Issuer shall have exercised or shall have obligated itself to exercise a prior redemption option pertaining thereto or otherwise to call any security for prior redemption, except to the extent provision is otherwise made therefor, if any prior redemption premiums are
49. 535681.003401.019 due in connection therewith. In such event moneys shall be deposited in such account or subaccount in due season for the payment of all such Bond Requirements without default as the same become due.
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ARTICLE VII
SECURITIES LIENS AND ADDITIONAL SECURITIES
Section 701. First Lien Bonds. The 2015 Bonds authorized herein constitute an irrevocable and first lien (but not necessarily an exclusively first lien) upon the Net Revenues on a parity with the lien of the Outstanding 2005 Bonds.
Section 702. Equality of Bonds. The 2015 Bonds and any parity securities heretofore or hereafter authorized to be issued and from time to time Outstanding are equally and ratably secured by a lien on the Net Revenues and shall not be entitled to any priority one over the other in the application of the Net Revenues regardless of the time or times of the issuance of the 2015 Bonds and any other such securities, it being the intention of the Board that there shall be no priority among the 2015 Bonds and any such parity securities regardless of the fact that they may be actually issued and delivered at different times.
Section 703. Issuance of Parity Securities. Nothing herein, subject to the limitations stated in Section 712 hereof, prevents the issuance by the Issuer of additional bonds or other additional securities payable from Pledged Revenues and constituting a lien thereon on a parity with, but not prior or superior to, the lien thereon of the 2015 Bonds, or prevents the issuance of bonds or other securities refunding all or a part of the 2015 Bonds, except as provided in Sections 708 through 712 hereof; but before any additional parity bonds or other additional parity securities are authorized or actually issued:
A. Absence of Default. At the time of the adoption of the supplemental instrument authorizing the issuance of the additional bonds or other securities as provided in Section 713 hereof, the Issuer shall not be in default in making any payments for parity securities required by Article V hereof.
B. Earnings Tests. Either:
(1) Projected Earnings Test. The estimated Gross Revenues to be derived for each of the immediately succeeding three Fiscal Years after the estimated date of the completion of the project effected in whole or in part with the proceeds of the parity bonds or other parity securities to be issued plus, for each such Fiscal Year, the estimated amount of Transfers and estimated Other Available Moneys that will constitute Pledged Revenues, shall be at least in an amount equal to the sum of the following for each of such three Fiscal Years:
(a) An amount equal to the Operation and Maintenance Expenses of the Airport System for such Fiscal Year, and
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(b) An amount equal to the sum of (i) 1.25 times the Bond Requirements excluding the portion of the Bond Requirements of any Letter of Intent Bonds which are included in this calculation pursuant to subclause (ii) of this clause (1)(b) to be paid during the Bond Year corresponding to such Fiscal Year for the Outstanding 2015 Bonds, any other Outstanding parity securities and the parity securities proposed to be issued plus (ii) 1.00 times the portion of the Bond Requirements to be paid during the Bond Year corresponding to such Fiscal Year for any Outstanding and any proposed parity Letter of Intent Bonds which are scheduled to be paid from grants paid by the Federal Government in anticipation of which such Letter of Intent Bonds were or are to be issued; or
(2) Historical Earnings Test. The sum of the Net Revenues plus the amount of Transfers and Other Available Moneys for the immediately preceding Fiscal Year is equal to or greater than the sum of (i) 1.25 times the combined maximum annual principal and interest requirements of the Outstanding 2015 Bonds and any other Outstanding parity securities and the parity securities proposed to be issued plus (ii) 1.00 times the portion of the Bond Requirements to be paid during the Bond Year in which the combined maximum annual principal and interest requirements used in subclause (i) of this clause (2) is payable of any Outstanding and any then proposed parity Letter of Intent Bonds which are scheduled to be paid from grants paid by the Federal Government in anticipation of which such Letter of Intent Bonds were or are to be issued.
C. Reduction of Annual Requirements. The respective annual Bond Requirements (including as such a requirement not only the principal of and interest on the securities but also the amount of any prior redemption premiums due on any Redemption Date as of which the Issuer shall have exercised or shall have obligated itself to exercise its prior redemption option by a call of securities for payment then) shall be reduced to the extent such Bond Requirements are scheduled to be paid each of the respective Bond Years with moneys held in trust or in escrow for that purpose by any trust bank within or without the State, including the known minimum yield from any investment in Federal Securities.
D. Treatment of Variable Interest Rate Securities and Securities subject to a Qualified Variable Rate Swap. For the purposes of Subsection B of this section, if any parity security bears interest at a variable interest rate and is not covered by a Qualified Swap, the rate of interest used in the foregoing test shall be the lesser of (i) the maximum permitted rate of interest on those parity securities or (ii) the average rate on such parity securities for the 12 months preceding the date of calculation, plus 0.50%. If any parity security is covered by a Qualified Variable Rate Swap, the rate of interest used in the foregoing
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be the lesser of (i) the maximum permitted rate of interest or (ii) the average rate on such Qualified Variable Rate Swap for the 12 months preceding the date of calculation, plus 0.50%. For purposes of the calculations of rates made under this Subsection D: (a) The date of calculation shall be established by the Authority, but must be the date of issuance of, or a date within 30 days prior to the date of issuance of, the parity securities then being issued for which a calculation under this section is required to be made; (b) If the securities have not been outstanding for a period of 12 months prior to the date of calculation, then the 12 month average rate shall be determined using the actual variable rate for any period during which those securities were outstanding and an estimate of the variable rate made by the Chief Financial Officer, based on the formulae or method used to determine the variable rate, as determined by the Chief Financial Officer, for the portion of such 12 month period during which such securities were not outstanding; and (iii) any determination, estimate or calculation made by the Chief Financial Officer under this Subsection D shall be conclusive in determining whether the Authority may issue additional parity securities under this Article.
E. Adjustment of Other Available Moneys. For the purposes of Subsection B of this section, if the proceeds of a Customer Facility Charge or PFC is included in Other Available Moneys, when estimating Other Available Moneys for each of the applicable Fiscal Years, the Authority (i) shall take into account any reduction in PFCs and/or Customer Facility Charges which have been approved by the Authority and will be in effect during the period for which the estimates are provided, and (ii) may take into account any increase in PFCs and/or customer Facility Charges which have been approved by the Authority and will be in effect during the period for which the estimates are provided.
F. Swap Termination Payments. Payments due under a Qualified Swap or Qualified Variable Rate Swap on the termination thereof prior to the full term permitted under the Qualified Swap or Qualified Variable Rate Swap must be subordinate to the regularly scheduled payments of the Bond Requirements of any 2015 Bonds, including regularly scheduled payments on the Qualified Swap or Qualified Variable Rate Swap.
Section 704. Certification of Revenues.
A. Additional Bonds. A written certification or written opinion by the Chief Financial Officer, an Airport Consultant or an Independent Accountant that such annual revenues are sufficient to pay the amounts provided in Section 703 B(2) hereof, when adjusted thereby as hereinabove provided in Section 703 C, D, or E, or a written certification or written opinion by the Chief Financial Officer or Airport Consultant that such annual revenues are sufficient to pay the amounts provided in Section 703 B(1) hereof, based upon estimates thereby as provided in Section 703 B(1) hereof shall be conclusively presumed to be accurate in determining the right of the Issuer to authorize, issue, sell, and deliver additional bonds on a parity with the 2015 Bonds.
B. Completion Bonds. Completion Bonds may be issued on a parity with the 2015 Bonds without complying with the provisions of Section 703 B hereof, if a written
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certification by the President/CEO or Chief Financial Officer stating: (i) that the principal amount of the Completion Bonds proposed to be issued to finance the costs of one or more improvement projects initially financed in whole or in part by parity bonds or parity securities does not exceed 15% of the aggregate principal amount of such parity bonds or parity securities initially issued for such improvement projects; and (ii) the issuance of the Completion Bonds is necessary to provide funds to complete the improvement projects, is furnished to the Trustee.
Section 705. Subordinate Securities Permitted. Nothing herein, subject to the limitations otherwise stated in this article and Section 1207, prevents the Issuer from issuing additional subordinate bonds or securities.
Section 706. Superior Securities Prohibited. Nothing herein permits the Issuer to issue superior bonds or superior securities.
Section 707. Use of Proceeds. The proceeds of any additional bonds or other additional securities (other than funding or refunding securities) payable from Pledged Revenues shall be used only to pay the cost of a project, including, without limitation, incidental expenses, for the betterment, enlargement, extension, other improvement, and equipment of the Airport System, or any combination thereof.
Section 708. Issuance of Refunding Securities. At any time after the 2015 Bonds, or any part thereof, are issued and remain Outstanding, if the Board shall find it desirable to refund any Outstanding bonds or other Outstanding securities payable from and constituting a lien upon Pledged Revenues, such bonds or other securities, or any part thereof, may be refunded only if the 2015 Bonds or other securities at the time or times of their required surrender for their payment shall then mature or shall be then callable for prior redemption for the purpose of refunding them at the Issuer’s option upon proper call, unless the holder or holders of all such Outstanding securities consent to such surrender and payment, regardless of whether the priority of the lien for the payment of any refunding securities on Pledged Revenues is changed (except as provided in Sections 706 and 709 through 712 hereof).
Section 709. Partial Refundings. The parity refunding securities so issued shall enjoy complete equality of lien with the portion of any parity securities of the same issue which is not refunded; and the holder or holders of such parity refunding securities shall have the same rights and privileges enjoyed by the holder or holders of the unrefunded parity securities of the same issue partially refunded by the parity refunding securities.
Section 710. Limitations Upon Refundings. Any bonds or other refunding securities payable from Pledged Revenues shall be issued with such details as the Board may by instrument provide, subject to the provisions of Section 712 hereof, and subject to the inclusion of any such rights and privileges designated in Section 709 hereof, but without any impairment of any contractual obligation imposed upon the Issuer by any proceedings authorizing the issuance of any one or more issues, including, without limitation, the 2015 Bonds.
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Section 711. Protection of Securities Not Refunded. If only a part of the Outstanding bonds and other Outstanding securities of any issue or issues payable from Pledged Revenues is refunded, then such securities may not be refunded without the consent of the holder or holders of the unrefunded portion of such securities:
A. Requirements Not Increased. Unless the 2015 Bonds or other refunding securities do not increase for any Bond Year the aggregate principal and interest requirements evidenced by such refunding securities and by the Outstanding securities not refunded on and prior to the last maturity date or last Redemption Date, if any, whichever time is earlier, if any, of such unrefunded securities, and unless the lien of the refunding securities on Pledged Revenues is not raised to a higher priority than the lien thereon of the 2015 Bonds or other securities thereby refunded; or
B. Subordinate Lien. Unless the lien on any Pledged Revenues for the payment of the refunding securities is subordinate to each such lien for the payment of any securities not refunded; or
C. Default and Earnings Test. Unless the refunding securities are issued in compliance with Section 703 hereof and Section 704 hereof, but excluding from any computation thereunder the 2015 Bonds to be refunded and redeemed.
Section 712. Supplemental Instrument. Additional bonds or other additional securities payable from Pledged Revenues shall be issued only after authorization thereof by a supplemental instrument of the Board stating the purpose or purposes of the issuance of such additional securities, directing the application of the proceeds thereof to such purpose or purposes, directing the execution and authentication thereof, and fixing and determining the date, principal amount, maturity or maturities, designation, and numbers thereof, the maximum rate or the rate or rates of interest to be borne thereby, any prior redemption privileges of the Issuer with respect thereto, and other provisions thereof. Upon such authorization such additional bonds or other additional securities may at one time or from time to time be executed by and on behalf of the Issuer and authenticated and delivered by the Issuer or upon its order. All additional securities shall bear such date, shall bear such numbers and series designation, letters, or symbols prefixed to their numbers distinguishing them from each other security, shall be payable at such place or places, may be subject to redemption prior to maturity on such terms and conditions, and shall bear interest at such rate or at such different or varying rates per annum, as may be fixed by instrument or other document of the Board.
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ARTICLE
VIII BUDGETARY
PROCEDURES
Section 801. Procedures Applicable. For the purposes of this Instrument the budgetary procedures of the Issuer shall be substantially as provided in the Budget Act. The Board and the officials of the Issuer shall annually and at such other times, if any, as may be provided by law prepare and adopt a budget pertaining to the Airport System pursuant to the Budget Act, all laws supplemental thereto.
Section 802. Copy of Budget and Audit to Bond Insurer. The Chief Financial Officer shall provide a copy of the Issuer’s annual budget to the bond insurer, if any, within 30 days after the approval thereof by the Board, together with such other information, data and reports as the bond insurer, if any, shall reasonably request from time to time. The Chief Financial Officer shall also provide the bond insurer, if any, with the Issuer’s audited financial statements with 150 days after the end of the Issuer’s fiscal year, (together with a certification of the Issuer that it is not aware of any default or Event of Default hereunder).
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ARTICLE IX
SPECIAL FACILITIES AND SPECIAL FACILITIES BONDS
Section 901. Privileges Reserved. The Issuer may enter into contracts pursuant to which the Issuer will agree to construct Special Facilities related to the Airport System to be financed by the issuance of special obligation bonds or other special obligation securities in accordance with this article (herein “Special Facilities” and “Special Facilities Bonds,” respectively); and the Issuer may lease such facilities upon the conditions provided in Sections 902 through 905.
Section 902. No Prejudicial Competition. Special Facilities shall not be constructed and leased for use or occupation under contracts which would provide services, facilities, or supplies whenever such services, facilities, or supplies may be adequately and efficiently made available to the users of the Airport System through the then existing improvements at the Airport System, the revenues from which are required hereunder to be deposited in the Revenue Fund; and the Issuer shall not construct and lease any such Special Facilities, the use and occupation of which would result in a reduction of Net Revenues below the minimum required to be maintained as provided in Article X hereof.
Section 903. Special Facilities Lease. A Net Rent Lease shall be entered into between the parties to such contract pursuant to which the lessee agrees to pay to the Issuer fixed rentals in periodic installments in each year during the term thereof which shall be sufficient to pay the Bond Requirements of the Special Facilities Bonds to be issued by the Issuer pursuant to this article to pay the cost of the construction, other acquisition, improvement, or equipment, or all or any other combination thereof, of the Special Facilities.
Section 904. Ground Lease. A second Net Rent Lease for the same term as that provided in the lease entered into under the provisions of Section 903 shall be entered into between the parties to such contract providing for additional rentals for the ground upon which such facilities are located, which lease shall provide for rental payments to the Issuer payable in periodic installments. Such ground rentals shall be firm for the term of the lease entered into under Section 903 hereof, but the lease may include provisions for increasing (but not decreasing) such ground rentals during the lease term. When initially established, such ground rental shall not be less than the ground rental for similar ground area then in effect at the Airport System under the schedule established by the President/CEO. All such ground rental payments shall be payable into the Revenue Fund.
Section 905. Use of Rentals from Such Facilities. The Issuer may issue Special Facilities Bonds for the purpose of constructing, otherwise acquiring, improving, or equipping, or all or any other combination thereof, Special Facilities at the Airport System for lease pursuant to the provisions of this article and subject to the limitations, if any, imposed by the laws pertaining to such leases or the Airport System. Such Special Facilities Bonds shall be payable solely from all or a part of the rentals under one or more Net Rent Leases payable to the Issuer pursuant to Section 903 hereof, and shall not be a charge or claim against the Revenue 57. 535681.003401.019
Fund or any other account designated in Article V hereof. After such Special Facilities Bonds have been fully paid and retired or are otherwise no longer Outstanding, all revenues derived from the leasing or other operation or use of such Special Facilities shall be a part of the Gross Revenues of the Issuer derived from the operation of the Airport System, and shall be applied by the Issuer in accordance herewith, and all costs of operating and maintaining such facilities paid by the Issuer shall be considered as Operation and Maintenance Expenses of the Airport System under the provisions hereof, and such facilities shall be a part of the Airport System.
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ARTICLE X
RENTALS, FEES AND OTHER CHARGES
Section 1001. Rate Maintenance Covenant. The Issuer shall adopt, from time to time revise, and continue in effect, directly or through leases and other agreements or licenses, a schedule of rentals, fees, and other charges for the use of the Airport System as may be necessary or proper in order that the amount of the Net Revenues, plus the amount of Other Available Moneys and Transfers, less an amount equal to that percent (which shall not be less than 35%) as is designated by the Authority of all revenues derived from gaming at the Airport System, in each Fiscal Year, shall at least equal the greater of: (i) the sum of 1.25 times the amount of the Bond Requirements for the Comparable Bond Year of the Outstanding 2015 Bonds and all other Outstanding parity securities, or (ii) 100% of the amount required to be deposited in the various funds and accounts as required by Article V hereof. The amount of Bond Requirements of any parity Letter of Intent Bonds shall be excluded from the foregoing requirements if and to the extent that the Issuer has prior to the beginning of the Fiscal Year received and set aside in the Bond Fund sufficient Federal grant monies to pay those Bond Requirements. All other Bond Requirements must be included in the foregoing rate computations. Such rentals, fees, and other charges must be reasonable in relation to the cost of providing, operating, and maintaining the Airport System and services furnished thereat. Also the foregoing rate maintenance covenant is subject to compliance by the Issuer with any legislation of the United States, the State, or other governmental body, or any regulation or other action taken by the Federal Government, any State agency, or any political subdivision of the State pursuant to such legislation, in the exercise of the police power thereof for the public welfare, which legislation, regulation, or action limits or otherwise inhibits the amounts of any rentals, fees, and other charges due to the Issuer for the use of or otherwise pertaining to any and all services rendered by or at the Airport System, including, without limitation, increases in the amounts of such rentals, fees, or other charges (or any combination thereof).
Section 1002. Increasing Revenues. From time to time, and as often as it shall appear necessary, and whenever the audit report made pursuant to Article XI hereof states that the Net Revenues were not sufficient to comply with the rate maintenance covenant stated in Section 1001 hereof (adjusted as provided therein), the President/CEO shall revise the schedule of rentals, fees, and other charges for the use of the Airport System as may be necessary to produce Net Revenues as aforesaid.
Section 1003. Collection of Charges. The Issuer shall cause all rentals, fees, and other charges pertaining to the Airport System to be collected as soon as reasonable, shall prescribe and enforce rules and regulations or impose contractual obligations for the payment thereof, including, without limitation, the imposition of penalties for any defaults, to the end that the Gross Revenues of the Airport System shall be adequate to meet the requirements of this Instrument and any other instruments supplemental thereto. The rentals, fees, and other charges due shall be collected in any lawful manner.
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ARTICLE
XI MISCELLANEOUS PROTECTIVE
COVENANTS
Section 1101. General. The Issuer hereby particularly covenants and agrees with the holders of the 2015 Bonds and makes provisions which shall be a part of its contract with such holders to the effect and with the purpose set forth in the following provisions and sections of this article.
Section 1102. Performance of Duties. The Issuer, acting by and through the President/CEO, the Board, or otherwise, shall faithfully and punctually perform or cause to be performed all duties with respect to Pledged Revenues, the Airport System, and any Special Facilities required by the Constitution and laws of the State and the various resolutions and other instruments of the Issuer, including, without limitation, the proper segregation of the proceeds of the 2015 Bonds and any securities hereafter authorized and pertaining to the Airport System and Pledged Revenues and their application from time to time to the respective accounts provided therefor.
Section 1103. Contractual Obligations. The Issuer shall perform all contractual obligations undertaken by it under leases or other agreements with the Federal Government, and any other agreements with all other Persons relating to the 2015 Bonds and any other Airport System securities, Pledged Revenues, the Refunding Project, or the Airport System, or any combination thereof.
Section 1104. Further Assurances. At any and all times the Issuer, acting by and through the Board except when otherwise required by law, shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge, deliver, and file or record all and every such further instruments, acts, deeds, conveyances, assignments, transfers, other documents, and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning, and confirming all and singular the rights, the Gross Revenues, and other moneys and accounts hereby pledged or assigned, or intended so to be, or which the Issuer may hereafter become bound to pledge or to assign, or as may be reasonable and required to carry out the purposes of this Instrument and any instrument supplemental thereto, and to comply with the Authority Act and the Bond Act. The Issuer, acting by and through the President/CEO, the Board, or otherwise, shall at all times, to the extent permitted by law, defend, preserve, and protect the pledge of the Gross Revenues and other moneys and accounts pledged hereunder and all the rights of every holder of any bonds or other securities payable from Pledged Revenues against all claims and demands of all Persons whomsoever.
Section 1105. Conditions Precedent. Upon the date of issuance of any 2015 Bonds, all conditions, acts, and things required by the Constitution or statutes of the United States, the Constitution or statutes of the State, including, without limitation, the Authority Act and the Bond Act, or this Instrument to exist, to have happened, and to have been performed 60. 535681.003401.019 precedent to or in the issuance of the 2015 Bonds shall exist, have happened, and have been performed; and the 2015 Bonds, together with all other obligations of the Issuer, shall not
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contravene any debt or other limitation prescribed by the Constitution or statutes of the United States, or the Constitution or statutes of the State.
Section 1106. Rules, Regulations, and Other Details. The Issuer, acting by and through the President/CEO, the Board, or otherwise, shall establish and enforce reasonable rules and regulations governing the operation, care, repair, maintenance, management, control, occupancy, use, and services of the Airport System, and any Special Facilities. The Issuer shall observe and perform all of the terms and conditions contained in this Instrument and shall comply with all valid acts, rules, regulations, orders, and directives of any legislative, executive, administrative, or judicial body applicable to the Airport System, any such Special Facilities, or the Issuer.
Section 1107. Governmental Approval. The Issuer shall maintain and operate the Airport System at standards required in order that the same may be approved by the proper and competent Federal Government authority or authorities for the landing and taking off of aircraft operating in scheduled service, and as a terminal point of the Issuer for the receipt and dispatch of passengers, property, and mail by aircraft.
Section 1108. Competent Personnel and Operation. The Issuer shall at all times endeavor to employ in connection with the operation of the Airport System in executive and managerial capacities only individuals competent therefor by reason of training and experience. The Issuer shall administer the Airport System in accordance with sound business principles. All salaries, fees, wages, and other compensation paid by the Issuer in connection with the maintenance, repair, and operation of the Airport System shall be reasonable, proper, and not excessive.
Section 1109. Maintenance of Airport System. The Issuer shall, insofar as it may legally do so, without any violation of other provisions of this Instrument, maintain, preserve, keep, and operate the Airport System or cause the Airport System to be maintained, preserved, kept, and operated in good repair, working order, and condition, and in such manner as will qualify the Airport System to receive financial aid from the Federal Government, which aid it may in its discretion seek and procure if available on fair and reasonable terms which are not inconsistent with the provisions of this Instrument, and when for the overall financial interests of the Airport System.
Section 1110. Operation of Airport System. The Issuer shall at all times operate the Airport System properly and in a sound and economical manner and shall maintain, preserve, and keep the Airport System properly, or cause the same, and any Special Facilities, by lease or otherwise, so to be maintained, preserved, and kept, with the appurtenances and every part and parcel thereof, in good repair, working order, and condition. The Issuer also shall from time to time make or cause to be made all necessary and proper repairs, replacements, and renewals so that at all times the operation of the Airport System may be properly and advantageously conducted in conformity with standards customarily followed by municipalities operating airport facilities of like size and character.
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Section 1111. Acquisition of Uneconomic Facilities. The Issuer shall not acquire additional airfields or other independent airport facilities the estimated revenues of which are insufficient to pay the reasonable Operation and Maintenance Expenses of such facilities, unless the Authority determines that the acquisition of such uneconomic facilities does not impair the Authority’s ability to meet requirements of this Resolution, including, in particular, Section 1001 hereof.
Section 1112. Competing Airports. The Issuer shall neither construct nor permit to be constructed other facilities or structures to be operated by the Issuer separate from the Airport System and competing for Pledged Revenues of the Airport System otherwise available for the payment of the 2015 Bonds or any other securities payable from Pledged Revenues.
Section 1113. Corporate Existence. The Issuer shall maintain its corporate identity and existence so long as any of the 2015 Bonds and any other securities payable from Pledged Revenues remain Outstanding, unless another body corporate and politic by operation of law succeeds to the duties, privileges, powers, liabilities, disabilities, immunities, and rights of the Issuer and is obligated by law to operate and maintain the Airport System and any Special Facilities and to fix and collect Pledged Revenues as herein provided without adversely and materially affecting at any time the privileges and rights of any holder of any Outstanding bond or any such other Outstanding security.
Section 1114. Disposal of Airport System Prohibited. Neither all nor a substantial part of the Airport System shall be sold, leased, mortgaged, pledged, encumbered, alienated, or otherwise disposed of, until all the 2015 Bonds have been paid in full, as to all Bond Requirements, or unless provision has been made therefor, or until the 2015 Bonds have been otherwise redeemed, including, without limitation, the termination of the pledge as herein authorized; and the Issuer shall not dispose of its title to the Airport System or to any useful part thereof, including, without limitation, any property necessary to the operation and use of the Airport System and the lands comprising the site of the Airport System, except: (i) for the use of the Airport System or services pertaining thereto in the normal course of business; (ii) for the execution of leases, licenses, easements, or other agreements in connection with the operation of the Airport System by the Issuer, or in connection with any Special Facilities thereat; (iii) for any pledges of and liens on revenues derived from the operation and use of the Airport System, or any part thereof, or any Special Facilities pertaining thereto, for the payment of any Special Facilities Bonds or other revenue bonds or other securities pertaining to the Airport System; and (iv) as otherwise provided in Sections 1116 and 1117 hereof.
Section 1115. Revenues and Agreements Thereabout. The Issuer shall not create or permit to be created any charge or lien on the Gross Revenues, except as herein permitted. Nothing herein contained prevents the Issuer from executing leases, licenses, easements, or other agreements for any part of the Airport System with the Federal Government or any other Persons, if such instrument shall not substantially diminish the Net Revenues otherwise available for the payment of the Outstanding 2015 Bonds and any other Outstanding bonds or other Outstanding securities payable from Pledged Revenues; but any such leases or other agreements,
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excluding presently existing leases and other existing agreements, and excluding any future Special Facilities Net Rent Lease and possibly any future ground Net Rent Lease pertaining to any Special Facilities and made in accordance with the provisions of Article IX hereof, but including, without limitation, any other future Net Rent Leases or other future agreements negotiated on a net-rent basis, or otherwise, shall contain provisions for the reestablishment of the amount of rental or other payments at intervals of not more than 5 years beginning with the date on which the term of any such leases or other agreements commences; and the rents, rates, or other charges established by any such leases or other agreements shall in no event be less than required by the provisions of Article X hereof.
Section 1116. Disposal of Property. Except to the extent the Issuer is prevented from so doing by any contractual limitation pertaining thereto, the Issuer may sell, exchange, lease, or otherwise dispose of at any time and from time to time any property constituting a part of the Airport System if the President/CEO or Chief Financial Officer determines that such sale, lease, exchange or disposal will not materially impair the Authority from fulfilling its obligations under the Resolution and (i) that the property is not useful in the construction, reconstruction, or operation of the Airport System; (ii) has ceased to be necessary for the efficient operation of the Airport System; or (iii) has been or will be replaced by other property which will provide at least an equal amount of Net Revenues. The net proceeds of the sale of any Airport System property shall be used for the purpose of replacing properties at the Airport System, real, personal, mixed, or otherwise, or shall be paid into the General Purpose Account for the purposes thereof.
Section 1117. Loss from Condemnation. If any part of the Airport System shall be taken by the exercise of a power of eminent domain, the amount of any award received by the Issuer as a result of such taking shall be paid into the General Purpose Account for the purposes thereof or held as a reserve for deposit subsequently into the General Purpose Account, as the Board may determine.
Section 1118. Payment of Governmental Charges and Liens. The Issuer shall pay or cause to be paid all taxes, assessments, and other municipal or governmental charges, if any, lawfully levied or assessed upon or in respect of the Airport System, or upon any part thereof, and any Special Facilities, or upon any portion of the Gross Revenues, or revenues otherwise pertaining to the Airport System, when the same shall become due. The Issuer shall duly observe and comply with all valid requirements of any municipal or governmental authority relative to the Airport System, or any part thereof, and to any Special Facilities, except for any period during which the validity of the same is being contested in good faith by proper legal proceedings. The Issuer shall not create or suffer to be created any lien or charge upon the Airport System, or any part thereof, or any Special Facilities, or upon the Gross Revenues, except the pledge and lien created by this Instrument for the payment of the Bond Requirements of the 2015 Bonds and any Outstanding parity securities or subordinate securities, and except as herein otherwise permitted. The Issuer shall pay or cause to be discharged or shall make adequate provision to satisfy and to discharge, within 60 days after the same shall become payable, all lawful claims and demands for labor, materials, supplies, or other objects which, if 63. 535681.003401.019
unpaid, might by law become a lien upon the Airport System, any part thereof, any Special Facilities, the Gross Revenues, or any other revenues pertaining to the Airport System. Nothing herein contained requires the Issuer to pay or cause to be discharged or to make provision for any such tax, assessment, lien, charge, or demand before the time when payment thereon shall be due, or so long as the validity thereof shall be contested in good faith.
Section 1119. Protection of Security. The Issuer, the officers, agents, and employees of the Issuer and the Board shall not take any action in such manner or to such extent as might prejudice the security for the payment of the Bond Requirements of the 2015 Bonds and any other securities payable from Pledged Revenues according to the terms of such securities. The Issuer shall maintain, preserve, and renew all the rights, powers, privileges, and franchises now owned or hereafter acquired with respect to the Airport System. The Issuer covenants and agrees to take such action as is necessary from time to time to perfect or to otherwise preserve the priority of the Net Revenues pledged to secure the Bond Requirements of the 2015 Bonds. No contract shall be entered into and no other action shall be taken by which the rights of any holder of any bond or other security payable from Pledged Revenues might be prejudicially and materially impaired or diminished.
Section 1120. Prompt Payment of Securities. The Issuer shall promptly pay the Bond Requirements of every bond and every other security payable from Pledged Revenues at a place, on the dates, and in the manner specified in the bond or other security according to their true intent and meaning and as provided in any instrument pertaining thereto, including without limitation, this Instrument.
Section 1121. Use of Gross Revenues. None of the Gross Revenues shall be used for any purpose other than as provided herein. The Issuer shall apply the Net Revenues to the payment of the 2015 Bonds, any other securities payable from Pledged Revenues, and the interest thereon (but not necessarily exclusively thereto), and the Issuer is not obligated to make such payments from any other source or moneys, but it is not prohibited from making such payments from any moneys which may be lawfully used for that purpose.
Section 1122. Use of Bond Fund. The Bond Fund shall be used solely and only and the moneys credited to such account are hereby pledged for the purpose of paying the Bond Requirements of the 2015 Bonds and any parity securities heretofore or hereafter authorized and then Outstanding, except for those moneys in the Interest Account, the Principal Account, and any Bond Reserve Account within the Bond Fund as are in excess of such Bond Requirements, both accrued and not accrued, to their respective maturities or any Redemption Date or Redemption Dates, whichever due date is earlier, if any (subject to the provisions of Sections 508, 510, 605, and 1201 hereof), and except for those moneys in any Bond Reserve Account within the Bond Fund in excess of the Minimum Securities Reserve, as hereinabove provided.
Section 1123. Additional Securities. The Issuer shall not hereafter issue any bonds or other securities payable from Pledged Revenues and having a lien on a parity with the lien of the 2015 Bonds so long as any 2015 Bonds are Outstanding, unless such additional
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securities (other than securities issued pursuant to Sections 708 through 712 hereof, Completion Bonds, and refunding securities on a parity with the 2015 Bonds) on a parity with the 2015 Bonds are issued in such manner as provided in Sections 703, 704, 707, and 712 hereof. Any other securities hereafter authorized to be issued and payable from Pledged Revenues shall not hereafter be issued, unless such additional securities are also issued in conformance with the provisions of Articles V and VII hereof.
Section 1124. Other Liens. Other than as provided herein, there are no liens or encumbrances of any nature whatsoever on or against the Airport System, or any part thereof, or on or against the Gross Revenues derived or to be derived. The Issuer shall not issue any bonds, other than the 2015 Bonds, or any other additional securities secured by a pledge of or lien on the Gross Revenues, or both such a pledge and such a lien (including, without limitation, amounts which the Issuer may thereafter be entitled to withdraw from the Revenue Fund and transfer to the Operation and Maintenance Account for the payment of Operation and Maintenance Expenses) and shall neither create nor cause to be created any lien or charge on the Gross Revenues or on any amount held by the Trustee or the Issuer under this Instrument, except as provided in Articles V and VII hereof; but neither this section nor any other provision of this Instrument shall prevent the Issuer from issuing additional bonds or other additional securities for the purposes of the Issuer payable out of or secured by a pledge of and lien on Pledged Revenues to be derived on and after such date as the pledge of and lien on the Pledged Revenues provided in this Instrument are discharged and satisfied as provided in Section 1201 hereof, or otherwise.
Section 1125. Revenues Claims. The Issuer shall defend against every suit, action, or proceeding at any time brought against any holder of any bonds or other securities payable from Pledged Revenues upon any claim arising out of the receipt, application, or disbursement of any of the Gross Revenues, or involving such holder’s rights under this Instrument or other proceedings pertaining to the issuance of such securities; the Issuer shall also indemnify and save harmless any such holders against any and all liability, claim, or assertion by any Person whomsoever, arising out of such receipt, application, or disbursement; but such holder at his election may appear in and defend any such suit, action, or proceedings; and notwithstanding any contrary provision hereof, this covenant shall continue and remain in full force and effect, even though all indebtedness, liabilities, obligations, and other sums secured hereby may have been fully paid and satisfied, and the obligations under this Instrument may have been released and the lien hereof discharged.
Section 1126. Accumulation of Interest Claims. In order to prevent any accumulation of claims for interest after maturity, the Issuer shall not directly or indirectly extend or assent to the extension of the time for the payment of any claim for interest on any of the 2015 Bonds or any other securities payable from Pledged Revenues; and the Issuer shall not directly or indirectly be a party to or approve any arrangements for any such extension or for the purpose of keeping alive any of such claims for interest. If the time for the payment of such installment of interest shall be extended in contravention of the foregoing provisions, such installment or installments of interest after such extension or arrangement shall not be entitled in 65. 535681.003401.019
case of default hereunder to the benefit or security of this Instrument, except upon the prior payment in full of the principal of all 2015 Bonds and any such other securities then Outstanding and of all matured interest on all such securities the payment of which has not been extended.
Section 1127. Records and Accounts. So long as any of the 2015 Bonds and any other securities payable from Pledged Revenues remain outstanding, proper records of record and account shall be kept by the Issuer, separate and apart from all other records and accounts, showing complete and correct entries of all transactions relating to the Airport System, to any Special Facilities thereat, and to all moneys pertaining thereto, including, without limitation, the Gross Revenues. Such records shall include (but not necessarily be limited to) monthly records, all in reasonable detail as may be determined by the President/CEO or his delegate and in accordance with standard accounting practices, showing:
A. Receipts. The Gross Revenues and other moneys received and pertaining to the Airport System or any Special Facilities;
B. Purposes and Accounts. The respective purposes for which such moneys were paid and the respective accounts in which such moneys were accounted; and
C. Complete Accounting. Complete and correct entries of all transactions relating to the receipt, disbursement, allocation, and application of all moneys.
All requisitions, requests, certificates, opinions, and other documents received by any Person on behalf of the Issuer in connection with the Airport System or any Special Facilities under the provisions of this Instrument shall be retained in the Issuer’s official records.
Section 1128. Rights Concerning Records. The Trustee shall have the right at all reasonable times to inspect all financial statements, other records, accounts, and data relating thereto, concerning the Airport System, any Special Facilities, or the Gross Revenues, or any other moneys pertaining to the Airport System or any such Special Facilities, or any combination thereof, and to make copies of such financial statements, other records, accounts, and data.
Section 1129. Audits Required. The Issuer shall continue to cause an audit to be made for each Fiscal Year in accordance with State law and in no event more than 180 days following the close of the Fiscal Year of such records, accounts, and subaccounts by an Independent Accountant.
Section 1130. Contents of Audit Reports. Each such audit report, in addition to whatever matters may be thought proper by the accountant to be included therein, shall be in reasonable detail as may be determined by the President/CEO or the Chief Financial Officer and in accordance with generally accepted accounting principles.
Section 1131. Insurance. The Issuer, subject to the condition that insurance is obtainable at reasonable rates and upon reasonable terms and conditions, shall insure and at all times keep the Airport System insured to the extent insurable and keep public liability insurance 66. 535681.003401.019
in a reasonable manner, in such amounts and against such risks as are, in the judgment of the Authority, prudent and reasonable, taking into account the amount and types of insurance or self insurance provided by similar airports. If at any time the Issuer shall be unable to obtain such insurance to the extent above required, the Issuer shall maintain such insurance to the extent reasonably obtainable. Insurance against any other risks of type of loss as are or shall be customarily covered may be obtained, including, without limitation, insurance against loss or damage to the Airport System by flood or other waters, elements of weather, explosion of any nature, earthquake, and volcanic eruption or war risk (or any combination thereof), when, if, and to the extent any such insurance can be procured at reasonable rates in the sole opinion of the Issuer.
Section 1132. Use of Insurance Proceeds. Immediately after any loss or damage to the Airport System which is covered by insurance, the Issuer shall cause plans and specifications for repairing, reconstruction, or otherwise replacing the damaged or destroyed property to be prepared and an estimate of the cost thereof, and to file copies of such plans and specifications and of such estimate with the President/CEO. The proceeds of all insurance referred to in Section 1131 hereof shall be available for and to the extent necessary be applied to the repair, reconstruction, and other replacement of the damaged or destroyed property. If such proceeds are more than sufficient for such purpose, the balance remaining shall be paid into the following subaccount and account in the following priorities:
A. Bond Reserve Account. Firstly, into any Bond Reserve Account, designated in Section 508 hereof to the extent necessary to bring the amount on deposit in any Bond Reserve Account up to the then Minimum Securities Reserve; and
B. General Purpose Account. Secondly, into the General Purpose Account designated in Section 515 hereof.
If such proceeds shall be insufficient to repair, reconstruct, or otherwise replace the damaged or destroyed property pertaining to the Airport System, the deficiency may be supplied by the President/CEO from moneys in the Renewal and Replacement Account, the General Purpose Account, or any other accounts or subaccounts legally available for such purposes. If the cost of repairing, reconstruction, or otherwise replacing the damaged or destroyed property as estimated by the President/CEO shall not exceed the proceeds of insurance and other moneys legally available for such purpose, the Issuer shall forthwith commence and diligently prosecute the repair, reconstruction, or other replacement of the damaged or destroyed property. The cost of maintaining such insurance for the Airport System shall be deemed a part of the Operation and Maintenance Expenses of the Airport System.
Section 1133. Transfer to General Purpose Account. The proceeds of any insurance designated in Sections 1131 and 1132 hereof and not applied within 18 months after receipt by the Issuer to the repairing, reconstructing, or otherwise replacing of the damaged or destroyed property, unless the Issuer is prevented from so doing because of conditions beyond its control, shall be transferred to the General Purpose Account.
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Section 1134. Maintenance of Policies. All such insurance policies designated in Sections 1131 hereof shall be filed with the President/CEO and shall be subject to the inspection at all reasonable times of any holder of any Outstanding bond or any other Outstanding security payable from Pledged Revenues or any authorized representative of any such holder.
Section 1135. Federal Tax Covenant. The Issuer hereby further covenants for the benefit of each holder of the 2015 Bonds that it will not take any action or omit to take any action with respect to the 2015 Bonds, the proceeds thereof, any other funds of the Issuer or any facilities financed or refinanced with the proceeds of the 2015 Bonds if such action or omission (i) would cause the interest on the 2015 Bonds to lose its exclusion from gross income for Federal income tax purposes under Section 103 of the Tax Code or (ii) would cause interest on the 2015 Bonds to lose its exclusion from alternative minimum taxable income as defined in Section 55(b)(2) of the Tax Code except to the extent such interest is required to be included in the adjusted current earnings adjustment applicable to corporations under Section 56 of the Tax Code in calculating corporate alternative minimum taxable income. The foregoing covenant shall remain in full force and effect notwithstanding the payment in full or defeasance of the 2015 Bonds until the date on which all obligations of the Issuer in fulfilling the above covenant under the Tax Code have been met.
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ARTICLE
XII MISCELLANE
OUS
Section 1201. Defeasance. When all Bond Requirements of the 2015 Bonds or any other securities of any other issue payable from Pledged Revenues have been duly paid, the pledge and lien and all obligations hereunder shall thereby be discharged as to such issue of securities and they shall no longer be deemed to be Outstanding within the meaning of this Instrument. There shall be deemed to be such due payment if the Issuer has placed in escrow or in trust with a trust bank exercising trust powers, an amount sufficient (including the known minimum yield available for such purpose from Federal Securities in which such amount wholly or in part may be initially invested) to meet all Bond Requirements of the securities issue, as such requirements become due to the fixed maturity dates of the securities or to any Redemption Date or Redemption Dates as of which the Issuer shall have exercised or shall have obligated itself to exercise its prior redemption option by a call of the securities thereafter maturing for payment then. The Federal Securities shall become due prior to the respective times on which the proceeds thereof shall be needed, in accordance with a schedule established and agreed upon between the Issuer and such bank at the time of the creation of the escrow or trust, or the Federal Securities shall be subject to redemption at the option of the holders thereof to assure such availability as so needed to meet such schedule. If at any time the Issuer has so placed in escrow or trust an amount so sufficient to pay designated Bond Requirements of securities constituting less than all of the Bond Requirements of the securities becoming due on and before their respective due dates, be they the fixed maturity dates of the securities or any such Redemption Date pertaining to the securities, such designated Bond Requirements shall be deemed paid and discharged under this Instrument. For the purposes of this section, “Federal Securities” shall not include any Federal Securities which are callable by any party other than the owner thereof.
To accomplish a defeasance of the 2015 Bonds, the Issuer shall cause to be delivered (i) a report of an independent firm of nationally recognized certified public accountants or such other accountant (“Accountant”) as shall be acceptable to the bond insurer, if any, verifying the sufficiency of the escrow established to pay the 2015 Bonds in full on the maturity or redemption date (“Verification”), (ii) an escrow deposit agreement (which shall be acceptable in form and substance to the Insurer), (iii) an opinion of nationally recognized bond counsel to the effect that the 2015 Bonds are no longer “Outstanding” under this Instrument and (iv) a certificate of discharge of the Trustee with respect to the 2015 Bonds; each Verification and defeasance opinion shall be acceptable in form and substance, and addressed, to the Issuer, the Trustee and the bond insurer, if any. The bond insurer, if any, shall be provided with final drafts of the above referenced documentation not less than five business days prior to the funding of the escrow.
If any defeasance escrow investments involve a contract for supplying Federal Securities for the escrow after the date of creation of the escrow (the “forward supply contract”), (i) such verification report shall state that the adequacy of the escrow to accomplish the 69. 535681.003401.019 refunding relies solely on the initial escrowed investments and the maturing principal thereof and
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interest income thereon and does not assume performance under or compliance with the forward supply contract, and (ii) the applicable escrow agreement shall provide that in the event of any discrepancy or difference between the terms of the forward supply contract and the escrow agreement, the terms of the escrow agreement shall be controlling. Notwithstanding anything herein to the contrary, in the event that the principal of or interest on the 2015 Bonds shall be paid by the provider of a bond insurance policy, if any, or Qualified Surety Bond pursuant to the terms of such bond insurance policy, if any, or Qualified Surety Bond, the 2015 Bonds shall remain Outstanding, not be defeased or otherwise satisfied until the amounts owed by the Authority pursuant to the terms of the agreement between the Authority and the provider of such bond insurance policy, if any, or Qualified Surety Bond are paid to the provider of such bond insurance policy, if any, or Qualified Surety Bond.
Section 1202. Delegated Powers. The Chairman, Secretary, Treasurer, President/CEO, Chief Financial Officer and other officers of the Issuer be, and they hereby are, authorized and directed to take all action necessary or appropriate to effectuate the provisions of this Instrument, including, without limitation:
A. Printing Bonds. The printing of the 2015 Bonds, including, without limitation, the printing of any statement of insurance guaranteeing the payment of the principal of and the interest on the insured 2015 Bonds by the insurer or insurers thereof;
B. Final Certificates. The execution of such certificates as may be reasonably required by the Purchaser, relating, among other matters, to:
(1) The signing of the 2015 Bonds,
(2) The tenure and identity of the officials of the Board and the Issuer,
(3) The exemption of interest on the 2015 Bonds from Federal income taxation,
(4) The delivery of the 2015 Bonds and the receipt of the purchase price, and
(5) If it is in accordance with fact, the absence of litigation, pending or threatened, affecting the validity thereof;
C. Information. The assembly and dissemination of financial and other information concerning the Issuer and the 2015 Bonds;
D. Certificate of the Chief Executive Officer. The execution of the Certificate of the Chief Executive Officer in accordance with the provisions of this Instrument, and
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E. Bond Sale. The sale and issuance of the 2015 Bonds in accordance with the provisions of this Instrument.
Section 1203. Statute of Limitations. No action or suit based upon any bond or other obligation of the Issuer shall be commenced after it is barred by any statute of limitations pertaining thereto. Any trust or fiduciary relationship between the Issuer and the holder of any bond or the obligee regarding any such obligation shall be conclusively presumed to have been repudiated on the fixed maturity date or other due date thereof unless the bond is presented for payment or demand for payment of any such obligation is otherwise made before the expiration of the applicable limitation period. Any moneys from whatever source derived remaining in any account reserved, pledged, or otherwise held for the payment of any such obligation, action or suit for the collection of which has been barred, shall revert to the Revenue Fund, unless the Board shall otherwise provide by instrument of the Issuer. Nothing herein prevents the payment of any such obligation after any action or suit for its collection has been barred if the Board deems it in the best interests of the public so to do and orders such payment to be made.
Section 1204. Impairment of Prior Contracts. Nothing herein impairs the Issuer’s obligation of contracts with any Person in connection with the Issuer, including, without limitation: (A) Pledged Revenues; (B) the Outstanding securities payable from Pledged Revenues; (C) the instruments authorizing Outstanding securities pertaining to the Airport System; (D) the Airport System; (E) the Refunding Project; (F) the existing viable contracts pertaining to the Airport System between the Issuer and certain scheduled and charter commercial air carriers or other Persons; or (G) any combination thereof.
If any provision herein is inconsistent with any provision in any existing contract pertaining to the Issuer so as to affect prejudicially and materially the rights and privileges thereunder, so long as such contract shall remain viable and in effect such provision therein shall control such inconsistent provision herein and the latter provision shall be subject and subordinate to such provision in such existing contract.
Section 1205. Governmental Powers. The enforceability of the Issuer’s obligations and creditors’ remedies is:
A. Equity Principles. Subject to general principles of equity to the extent relevant to the Issuer (regardless of whether such enforceability is considered in a proceeding in equity or at law),
B. Limitations Fixed by Law. Subject to the limitations upon enforceability fixed by bankruptcy, insolvency, reorganization, moratorium, and other laws affecting creditors’ rights and privileges,
C. State and U.S. Powers. Otherwise subject to the reasonable exercise in the future by the State and its governmental bodies of the police powers and the powers of eminent domain, taxation, and licensing inherent in the sovereignty of the State and to
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the exercise by the United States of the powers delegated to it by the Constitution of the United States,
D. Limitations Upon Suits. Subject to the limitations stated in the 11th Amendment, Constitution of the United States, upon suits against states in Federal courts, and
E. Sovereign Immunity. Subject to the possible passage hereafter of a State statute reestablishing the doctrine of sovereign immunity (heretofore waived by the State subject to certain exceptions and conditions) of the State and any political subdivision of the State from liability and suits there against in the absence of the State’s consent thereto. Nothing herein prohibits or limits the exercise by the Federal Government, the State, or any other governmental entity of their respective sovereign powers. Generally, the State can neither contract away such sovereign powers nor limit or inhibit by contract the proper exercise of such powers, and this Instrument does not purport to do so.
Section 1206. Additional Securities. The Issuer reserves the privileges of issuing at a later time or from time to time any securities now or hereafter authorized by law (not herein designated for issuance), as moneys, if any, are needed for the project or projects for which such securities are authorized respectively to be issued.
Section 1207. No Acceleration. Nothing in this Instrument or any other instrument of the Issuer or any law of the State shall permit the acceleration of the time or times for the payment of the 2015 Bonds, as to all Bond Requirements prior to their respective maturities or other due dates as provided herein, even if the Issuer defaults in the payment of any such Bond Requirements hereunder, and shall not permit such an acceleration of the time for the payment of any subordinate securities without the prior written consent of the bond insurer, if any. The Authority may enter into Qualified Swaps and Qualified Variable Rate Swaps which provide for a payment due on termination thereof, whether by reason of a default by the Issuer or otherwise, without obtaining the prior written consent of the bond insurer, if any, so long as the termination payment does not have a lien on the Net Revenues that is on a parity with or superior to the lien thereon of the 2005 Bonds and 2015 Bonds.
Section 1208. Subrogation of Bondholder’s Rights. If the principal, or the Redemption Price, if applicable, and interest due on the 2015 Bonds shall be paid by the bond insurer, if any, the assignment and pledge of Pledged Revenues, and all covenants, agreements, other obligations, liabilities, and duties of the Issuer or the Trustee, or both of them, as the case may be, to the holders of the 2015 Bonds shall continue to exist; and the bond insurer, if any, shall be subrogated to the rights and privileges of such holders of the 2015 Bonds so paid by the bond insurer, if any.
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ARTICLE
XIII PRIVILEGES, RIGHTS AND
REMEDIES
Section 1301. Bondholder’s Remedies. Each holder of any 2015 Bond and the Trustee, acting for each such holder, shall be entitled to all of the privileges, rights, and remedies provided herein, in the Authority Act, in the Bond Act, and as otherwise provided or permitted at law or in equity or by other statutes, except as provided in Sections 206 through 210 hereof, but subject to the provisions herein concerning Pledged Revenues and the proceeds of the 2015 Bonds.
Section 1302. Right To Enforce Payment. Nothing in this article affects or impairs the right of any holder of any 2015 Bond to enforce the payment of the Bond Requirements of his bond or the obligation of the Issuer to pay the Bond Requirements of each 2015 Bond to the holder thereof at the time and the place expressed in the 2015 Bond.
Section 1303. Events of Default. Each of the following events is hereby declared an “event of default:”
A. Nonpayment of Principal and Premium. Payment of the principal of any of the 2015 Bonds, or any prior redemption premium due in connection therewith, or both, is not made when the same becomes due and payable, either at maturity or by proceedings for prepayment, or otherwise;
B. Nonpayment of Interest. Payment of any installment of interest is not made when the same becomes due and payable;
C. Incapable To Perform. The Issuer for any reason is rendered incapable of fulfilling its obligations hereunder;
D. Nonperformance of Duties. The Issuer fails to carry out and to perform (or in good faith to begin the performance of) all acts and things lawfully required to be carried out or to be performed by it under any contract relating to Pledged Revenues, to the Airport System, to any Special Facilities thereat, or to all or any other combination thereof, or otherwise, including, without limitation this Instrument, and such failure continues for 60 days after receipt of notice directly from the holders of a majority in principal amount of the 2015 Bonds and parity securities then Outstanding or receipt of such notice from such holders is delivered by the Trustee;
E. Failure to Reconstruct. The Issuer discontinues or unreasonably delays or fails to carry out with reasonable dispatch the repair, reconstruction, or other replacement of any material part of the Airport System which is destroyed or damaged and is not promptly replaced (whether such failure to replace the same is due to impracticability of such
73. 535681.003401.019 replacement, is due to a lack of moneys therefor, or for any other reason);
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F. Appointment of Receiver. An order or decree is entered by a court of competent jurisdiction with the consent or acquiescence of the Issuer appointing a receiver or receivers for the Airport System or for any Pledged Revenues and any other moneys subject to the lien to secure the payment of the 2015 Bonds, or both such Airport System and such moneys, or an order or decree having been entered without the consent or acquiescence of the Issuer is not vacated or discharged or stayed on appeal within 60 days after entry; and
G. Default of Any Provision. Except as otherwise provided herein, the Issuer makes any default in the due and punctual performance of any other of the representations, covenants, conditions, agreements, and other provisions contained in the 2015 Bonds or in this Instrument on its part to be performed, and such default continues for 60 days after written notice specifying such default and requiring the same to be remedied is given to the Issuer directly by the holders of a majority in principal amount of the 2015 Bonds and any parity securities then Outstanding or such notice from such holders is received by the Trustee and delivered to the Issuer by the Trustee. If the Issuer defaults in performance of the Rate Maintenance Covenant pursuant to Section 1001 hereof, and: (1) the Issuer has consulted an Airport Consultant with regard to the steps it should take to increase Net Revenues; (2) the rates and charges collected by the Issuer equal or are greater than 100 percent of combined maximum principal and interest requirements; and (3) the Issuer is following those recommendations of the Airport Consultant, it does not constitute an event of default as long as such default does not continue for a period of not more than three years.
Section 1304. Remedies for Defaults. Upon the happening and continuance of any of the events of default, as provided in Section 1303 hereof, then and in every case the holder or holders of not less than a majority in principal amount of the 2015 Bonds and any parity securities then Outstanding or the Trustee therefor may proceed against the Issuer and its agents, officers, and employees to protect and to enforce the rights of any holder of 2015 Bonds under this Instrument by mandamus or by other suit, action, or special proceedings in equity or at law, in any court of competent jurisdiction, either for the appointment of a receiver or for the specific performance of any covenant or agreement contained herein or by an award of execution of any power herein granted for the enforcement of any proper, legal, or equitable remedy as such holder or holders may deem most effective to protect and to enforce the rights aforesaid, or thereto enjoin any act or thing which may be unlawful or in violation of any right of any holder of any 2015 Bond, or to require the Issuer to act as if it were the trustee an expressed trust, or any combination of such remedies. All such proceedings at law or in equity shall be instituted, had, and maintained for the equal benefit of all holders of the 2015 Bonds and any parity securities then Outstanding.
Section 1305. Vesting in Trustee Powers of Statutory Trustee. The holders of the 2015 Bonds shall be entitled to the benefits and be subject to the provisions of NRS 350.660, 350.664, and 350.666, Bond Act (except as hereinafter provided with respect to the method of the appointment of a trustee), and the trustee referred to therein (being the Trustee appointed and confirmed herein) shall have the powers provided by such sections of the Bond Act; the provisions of such sections of the Bond Act (except as to such method of appointment) shall be
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fully applicable to all Outstanding 2015 Bonds; the right or privilege of such holders to appoint such trustee in the manner provided in such sections is hereby abrogated; all of the rights, powers, and duties of such trustee shall be and hereby are vested in the Trustee without further act on the part of the holders of the 2015 Bonds; and the Issuer shall not interpose, as a defense to any proceedings under such sections of the Bond Act, failure of holders of 2015 Bonds to appoint a trustee in the manner provided in such sections of the Bond Act.
Section 1306. Receiver’s Rights and Privileges. Any receiver appointed in any proceedings to protect the rights of such holders hereunder, the consent to any such appointment being hereby expressly granted by the Issuer, may enter and take possession of the Airport System and any Special Facilities thereat, subject to the rights and privileges of any lessee or other user under any lease or other contract, may operate and maintain the same, may prescribe rentals, fees, and other charges, and may collect, receive, and apply all Gross Revenues and any other revenues pertaining to the Airport System and any such Special Facilities arising after the appointment of such receiver in the same manner as the Issuer itself might do.
Section 1307. Rights and Privileges Cumulative. The failure of any holder of any Outstanding 2015 Bond to proceed in any manner herein provided shall not relieve the Issuer, its Board, or any of the Issuer’s officers, agents, or employees of any liability for failure to perform or carry out any duty, obligation, or other commitment. Each right or privilege of any such holder (or trustee thereof) is in addition and is cumulative to any other right or privilege, and the exercise of any right or privilege by or on behalf of any holder shall not be deemed a waiver of any other right or privilege thereof.
Section 1308. Duties upon Defaults. Upon the happening of any of the events of default as provided in Section 1303 hereof, the Issuer, in addition, shall do and perform all proper acts on behalf of and for the holders of the 2015 Bonds, any parity securities payable from Pledged Revenues to protect and to preserve the security created for the payment of the securities and to insure the payment of the Bond Requirements of the securities promptly as the same become due. During any period of default, so long as any of the securities, as to any Bond Requirements, are Outstanding, all Net Revenues shall be paid into the Bond Fund, and, to the extent such revenues, if any, exceed the Bond Requirements of the Outstanding securities payable from such account, both accrued and to accrue to their respective fixed maturity dates or to any Redemption Date or Redemption Dates pertaining thereto, whichever is earlier, if any, into any like account or like accounts for any Outstanding subordinate securities. If the Issuer fails or refuses to proceed as in this section provided, the holder or holders of not less than a majority in principal amount of the 2015 Bonds and any parity securities then Outstanding, after demand in writing, may proceed to protect and to enforce the rights of the holders of the securities as hereinabove provided; and to that end any such holders of Outstanding securities shall be subrogated to all rights of the Issuer under any agreement, lease, or other contract involving Pledged Revenues, the Airport System, or any Special Facilities thereat entered into prior to the effective date of this Instrument or thereafter while any such securities are Outstanding.
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Section 1309. Duties in Bankruptcy Proceedings. If any lessee or other user of the Airport System or any such Special Facilities proceeds under any laws of the United States relating to bankruptcy, including, without limitation, any action under law providing for corporate reorganization, it shall be the duty of the Issuer and its appropriate officers are hereby authorized and directed to take all necessary steps for the benefit of the holders of the 2015 Bonds and any parity securities in such proceedings, including, without limitation, the filing of any claims for unpaid rentals, fees, other charges, and other payments due to the Issuer or otherwise arising from the breach of any of the covenants, terms, or conditions of the lease or any other contract pertaining to the Airport System or any Special Facilities thereat, unless the President/CEO or his delegate determines that the costs of such action are likely to exceed the amounts thereby recovered from such obligor.
Section 1310. Prejudicial Action Unnecessary. Nothing in this article requires the Issuer to proceed as provided therein if the President/CEO or his delegate determines in good faith and without any gross abuse of his discretion that if the Issuer so proceeds it is more likely than not to incur a net loss rather than a gain or such action is otherwise likely to affect materially and prejudicially the holders of the Outstanding 2015 Bonds and any Outstanding parity securities.
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ARTICLE
XIV CONCERNING THE TRUSTEE
Section 1401. Appointment of Trustee. U.S. Bank National Association is hereby reappointed and reconfirmed as Trustee. The Trustee shall signify its acceptance of the duties and obligations imposed upon it by this Instrument by executing the registration panel endorsed upon the 2015 Bonds; and the Trustee shall be deemed to have accepted such duties and obligations not only with respect to the 2015 Bonds so registered, but also with respect to all the 2015 Bonds thereafter to be issued hereunder.
Section 1402. Property Held in Trust. All moneys and securities held by the Trustee at any time pursuant to the terms of this Instrument shall be and hereby are assigned, transferred, and set over unto such Trustee in trust for the purposes and under the terms and conditions on this Instrument.
Section 1403. Deposit and Security of Funds. Subject to the provisions of Sections 602 and 603 hereof, all moneys (not including securities) held by the Trustee may, subject to the provisions of this section, be deposited by the Trustee in demand or time deposit in its banking department or with such other Banking Institutions as may be designated by the Issuer. No such moneys shall be deposited with any Banking Institution, other than the Trustee, in an amount exceeding 50% of the amount which an officer of such bank shall certify to the Trustee and to the Issuer as the combined capital and surplus of such bank. No such moneys shall be deposited or remain on deposit with any Banking Institution, including the Trustee, in excess of the amount guaranteed by the Federal Deposit Insurance Corporation or other Federal agency:
A. Pledge of Collateral Security. Unless such bank shall have lodged with the trust department of the Trustee or, with the written approval of the Trustee and of the Issuer, pledged to some other Banking Institution for the benefit of the Issuer and every holder of any 2015 Bond issued hereunder, as collateral security for the moneys deposited, Federal Securities or such securities as are provided by law for securing a deposit in a Banking Institution in the State of cities and towns in the State, having a market value (exclusive of accrued interest) at least equal to 110% of the amount of such moneys; or
B. Surety Bond. Unless, in lieu of such collateral security as to all or any part of such moneys, there shall have been lodged with the trust department of the Trustee for the benefit of the Issuer and every holder of any 2015 Bond issued hereunder, and remain in full force and effect as security for such moneys or part thereof, the indemnifying bond or bonds of a surety company or companies qualified as surety for deposits of funds of the United States and qualified to transact business in the state in which such Banking Institution is located in a sum at least equal to the amount of such moneys or part thereof.
The Trustee shall allow and credit interest on any such moneys held by it at such rate as it customarily allows upon similar funds of similar size and under similar conditions or as 77. 535681.003401.019
required by law. Interest or any other gain in respect of moneys or on securities in any account shall be credited in accordance with the provisions of Section 605.
Section 1404. Basic Duties of Trustee. The Trustee undertakes, prior to default, and after the curing of all defaults which may have occurred, to perform such duties and only such duties as are specifically set forth in this Instrument and, in case of an event of default (which has not been cured) to exercise such of the rights and powers vested in it by this Instrument and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs, except as herein otherwise expressly provided. The Trustee, upon receipt of evidence furnished to it by or on behalf of the Issuer pursuant to any provision of this Instrument shall examine the same to determine whether or not such evidence conforms to the requirements of this Instrument.
Section 1405. Trustee’s Conduct. Except as herein otherwise expressly provided, no provision of this Instrument relieves the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
A. Absence of Implied Duties. Prior to default hereunder and after the curing of all defaults which may have occurred, the Trustee shall not be liable except for the performance of such duties as are specifically set out in this Instrument, and no implied covenants or obligations shall be read into this Instrument against the Trustee, but the duties and obligations of the Trustee, prior to default and after curing of all defaults which may have occurred, shall be determined solely by the express provisions of this Instrument;
B. Reliance Upon Instruments. Prior to default hereunder and after the curing of all defaults which may have occurred, and in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, opinions, or other instruments conforming to the requirements of this Instrument;
C. No Liability for Mere Error of Judgment. The Trustee shall not be personally liable for any error of judgment made in good faith by a responsible officer or officers of the Trustee, unless it shall be proven that the Trustee was negligent in ascertaining the pertinent facts or in the performance of an expressed duty;
D. Action Directed by Bondholders. The Trustee shall not be personally liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in principal amount of the 2015 Bonds and parity securities then Outstanding relating to the time, method, and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Instrument;
E. Incurrence of Personal Liabilities. The Trustee shall not be required to advance or expend or use its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the 78. 535681.003401.019
repayment of such funds or liability is not assured to it by the security afforded it by the terms of this Instrument or by other reasonable security or indemnity;
F. Limited Liability Concerning Bonds. The Trustee shall not be under any responsibility or duty with respect to the disposition by the Issuer of the 2015 Bonds or the application by the Issuer of the proceeds thereof or of any moneys paid to the Issuer under any of the provisions hereof, except to the extent that such proceeds are paid to the Trustee in its capacity as Trustee or Paying Agent;
G. Cost of Execution or Enforcement of Trusts. The Trustee, in the case of any default hereunder, shall not be under any obligation to take any action toward the execution or enforcement of the trusts created by this Instrument, which, in the opinion of the Trustee, will likely involve it in expense or liability, unless one or more of the holders of 2015 Bonds shall, as often as required by the Trustee, furnish to the Trustee security and indemnity satisfactory to the Trustee against such expense or liability; and
Section 1406. Recitals of Fact and Representations. The recitals of fact contained herein and in the 2015 Bonds (other than the Trustee’s registration panel) shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity of this Instrument or of the 2015 Bonds issued thereunder.
Section 1407. Entry upon Airport System. The Trustee shall not be personally liable in case of entry by it upon the Airport System for debts contracted or liability or damages incurred in the management or operation of the properties comprising the Airport System.
Section 1408. Further Permitted Reliance. To the extent permitted by Sections 1404 and 1405:
A. Reliance upon Documents. The Trustee may rely and shall be protected in acting upon any resolution, certificate, opinion, notice, request, consent, order, appraisal, report, bond, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
B. Reliance upon Counsel. The Trustee may consult with counsel and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel; and
C. Reliance upon Assistants. Whenever this Instrument provides for certain action to be taken or a certain document shall be executed and forwarded to the Trustee or otherwise by a designated official and such action is taken or such document is executed and so forwarded by the assistant to such official or by an acting official so designated, the Trustee may conclusively assume that the designated official is unable to act in such capacity at such time and the assistant or acting official is then authorized to take such action or to execute and so 79. 535681.003401.019
forward such document, as the case may be; and the Trustee may rely upon such action or document.
Section 1409. Other Immunities. The Trustee shall not be under any responsibility for the approval of any expert for any of the purposes expressed in this Instrument, but nothing in this section contained shall relieve the Trustee of its obligation to exercise reasonable care with respect to the approval of independent experts who may furnish opinions or certificates to the Trustee pursuant to any provision of this Instrument. Any instrument of the Board shall be evidenced to the Trustee by a copy thereof certified by the Secretary of the Issuer to have been duly adopted, and the Trustee may accept such copy as conclusive evidence of the adoption of such instrument. Nothing contained in this section modifies the obligation of the Trustee to exercise after default the rights and powers vested in it by this Instrument with the degree of care and skill specified in Section 1404. No surety bond or other security shall be required of the Trustee unless ordered by a court having jurisdiction and for cause shown.
Section 1410. Permitted Transactions with Issuer. The Trustee, any paying agent, and any other Banking Institution to which this Instrument pertains may buy, hold, sell or deal in, or be a pledgee of the 2015 Bonds and any other securities of the Issuer and may engage or be interested in any financial or other transaction with the Issuer, all as freely as if they were not Trustee, paying agent, or such other bank hereunder.
Section 1411. Commingling of Moneys. Except as herein otherwise provided, all moneys received by the Trustee, whether as Trustee or otherwise, until used or applied as herein provided, shall be held in trust for the purposes for which they were paid, but need not be segregated from other moneys except to the extent required by law, unless herein otherwise expressly provided.
Section 1412. Compensation of Trustee. The Issuer covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder of the Trustee, which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust; and the Issuer will pay to the Trustee from time to time its expenses and disbursements (including, without limitation, reasonable compensation and the expenses, charges, counsel fees, and other disbursements of its counsel, officers, employees, other agents, and of all other Persons not regularly in the Trustee’s employ). The Issuer also covenants to indemnify the Trustee for, and to hold it harmless against, any loss, liability, or expense incurred without negligence or bad faith on the part of the Trustee, arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending against any claim of liability in the premises. The obligations of the Issuer to the Trustee under this section shall constitute additional obligations secured by the lien of this Instrument, and shall be defrayed as Operation and Maintenance Expenses.
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Section 1413. Preference in Event of Defaults. In order to further assure the Trustee that it will be compensated, reimbursed, and indemnified, all parties to this Instrument agree, and hereafter each holder of any bond and any other security hereafter authorized and payable from Pledged Revenues by his acceptance thereof shall be deemed to have agreed that in the event of the occurrence of any one or more of the events of default mentioned in Section 1303 hereof, the Trustee may file from time to time in any proceeding or proceedings one or more claims, supplemental claims, and amended claims as a creditor for its reasonable compensation for all services rendered by it (including services rendered during the course of any such proceeding or proceedings) and for reimbursement as Operation and Maintenance Expenses for all advances, expenses, and disbursements (including the reasonable compensation and the expenses and disbursements of its counsel and of all other Persons not regularly in its employ) made or incurred by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties herein of the Trustee, and for any and all amounts to which the Trustee is entitled as indemnity; and the Trustee and its counsel and agents may file in any such proceeding or proceedings applications or petitions for compensation for such services rendered, for reimbursement for such advances, expenses, and disbursements, and for such indemnity, as such Operation and Maintenance Expenses.
Section 1414. Adjustment and Allowance of Claims. The claim or claims of the Trustee filed in any such proceeding or proceedings shall be reduced by the amount of compensation for services, reimbursement for advances, expenses, and disbursements, and indemnity paid to it following final allowance to it and to its counsel and agents by the court in any such proceedings as an expense of administration or in connection with a plan of reorganization or readjustment. To the extent that compensation, reimbursement, and indemnity are denied to the Trustee or to its counsel or its other agents because of not being rendered or incurred in connection with the administration of an estate in a proceeding or in connection with a plan of reorganization or readjustment approved as required by law, because such services were not rendered in the interests of and with benefit to the estate of the Issuer as a whole but in the interest of and with benefit to the holders of the 2015 Bonds and any other securities hereafter authorized and payable from Pledged Revenues in the execution of the trusts hereby created or in the exercise and performance of any of the powers and duties hereunder of the Trustee, or because of any other reason, the court may, to the extent permitted by law, allow such claim, as supplemented and amended, in any such proceeding or proceedings and for the purposes of any plan of reorganization or readjustment of the Issuer’s obligations, may classify the Trustee as a creditor of a class having priority for the payment of the Operation and Maintenance Expenses, and precedence over the class in which the holders of the 2015 Bonds and any such securities are placed. The amount of the claim or claims of the Trustee for services rendered and for advances, expenses, and disbursements, including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ which are not allowed and paid in any such proceeding, but for which the Trustee is entitled to the allowance of a claim as herein provided may be fixed by the court or judge in any such proceeding or proceedings to the extent that such court or judge has or exercises jurisdiction over the amount of any such claim or claims.
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Section 1415. Certificates of Officers and Experts. Whenever in the administration of the trusts of this Instrument, prior to a default hereunder, the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed), subject to the provisions of Sections 1404 and 1405, may be deemed to be prima facie proved and established by a certificate signed by an Issuer officer, or may be deemed to be conclusively proved and established by a certificate signed by the Chairman or Vice Chairman and Secretary or Treasurer of the Board and delivered to the Trustee, and any such certificate so conclusively proved shall be full warrant to the Trustee for any action taken or suffered by it under the provisions of this Instrument upon the faith thereof. Likewise, all appraiser’s certificates, engineer’s certificates, independent appraiser’s certificates, independent engineer’s certificates, officers’ certificates, and other certificates or instruments herein provided to be given to the Trustee, shall be full warrant and protection to the Trustee, subject to the provisions of Sections 1404 and 1405 hereof, for any action or non-action taken or suffered by it under the provisions of this Instrument upon the faith thereof. Whenever it is provided in this Instrument that the Trustee shall take any action upon the happening of a specified event or upon the fulfillment of any condition or upon the request of the Issuer or of any holder of any 2015 Bond, the Trustee shall have full power to give any and all notices and to do any and all acts and things incident to such action.
Section 1416. Resignation of Trustee. The Trustee, or any successor thereof, may at any time resign and be discharged of its duties and obligations hereunder by giving not less than 60 days’ written notice to the Issuer. No resignation shall become effective unless a successor has been appointed and has accepted the duties of Trustee. Such resignation shall take effect upon the day specified in such notice unless previously a successor shall have been appointed by the Issuer or holders of 2015 Bonds as herein provided, in which event such resignation shall take effect immediately on the appointment of such successor. The bond insurer, if any, shall be furnished with written notice of the resignation of the Trustee and the appointment of any successor thereto.
Section 1417. Removal of Trustee. The Trustee, or any successor thereof, may be removed at any time by the Issuer, as long as the Issuer is not in default pursuant to the terms of this Instrument or any other instrument authorizing the issuance of parity securities, and at any time by the holders of a majority in principal amount of the 2015 Bonds and any other bonds payable from Pledged Revenues then Outstanding, which payment is secured by a lien on such revenues, excluding any such bonds held by or for the account of the Issuer, by an instrument or concurrent instruments in writing signed and acknowledged by such holders of bonds or by their attorneys-in-fact duly authorized and delivered to the Issuer. Copies of each such instrument shall be delivered by the Issuer to the bond insurer, if any, to the Trustee and to any successor thereof. No removal of the Trustee shall become effective until successor has been appointed and accepted the duties of Trustee.
Section 1418. Successor Trustee. In case the Trustee, or any successor thereof, shall resign or shall be removed or shall become incapable of acting or shall be adjudged a
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bankrupt or insolvent, or if a receiver, liquidator, or conservator thereof or of its property shall be appointed, or if any public officer shall take charge or control thereof or of its property or affairs, a successor may be appointed by the Issuer, or in the case of removal of the Trustee by the holders, a successor may be appointed by the holders of a majority in principal amount of the then Outstanding 2015 Bonds and any other parity bonds payable from Pledged Revenues, which payment is secured by a lien on such revenues, excluding any such bonds held by or for the account of the Issuer, by an instrument or concurrent instruments in writing signed and acknowledged by such holders of such parity bonds or by their attorneys-in-fact duly authorized and delivered to the Issuer. Pending such appointment by holders of such bonds, the Issuer shall forthwith appoint a successor to act until such appointment is made by the holders of such bonds. Copies of each such instrument and of any instrument of the Issuer providing for any such appointment shall be delivered by the Issuer to the successor and to the predecessor Trustee. If no appointment of a successor shall be made within 30 days after the Trustee has been removed or resigned or after the occurrence of any other event requiring or authorizing such appointment, any holder of such parity bonds or the trustee of such bonds may apply to any court of competent jurisdiction for the appointment of such a successor, and the court thereupon after such notice, if any, as the court may deem proper and may prescribe, may appoint such successor. Any successor appointed under the provisions of this section shall be a trust bank willing and able to accept the appointment on reasonable and customary terms and authorized by law to perform all the duties required by this Instrument.
Section 1419. Transfer of Rights and Property. Any successor appointed under the provisions of Section 1418 of this Instrument shall execute, acknowledge, and deliver to its predecessor and also to the Issuer an instrument accepting such appointment; and thereupon such successor, without any further act, deed, or conveyance, shall become fully vested with all moneys, estates, properties, rights, powers, duties, and obligations of its predecessor hereunder, with like effect as if originally appointed herein as Trustee; but the Trustee then ceasing to act shall, nevertheless, on request by the Issuer or by such successor, execute, acknowledge, and deliver such instruments of conveyance and further assurance and such other things as may reasonably be required for more fully and certainly vesting and confirming in such successor all the right, title, and interest of such Trustee in and to any property held by it hereunder and shall pay over, assign, and deliver to such successor any money or other property subject to the trusts and conditions herein set forth. If any deed, conveyance, or instrument in writing from the Issuer is required by such successor for more fully and certainly vesting in and confirming to it any such moneys, estates, properties, rights, powers, duties, or obligations, any and all such deeds, conveyances, and instruments in writing shall on request and so far as may be authorized by law be executed, acknowledged, and delivered to the Issuer by the Trustee originally appointed herein.
Section 1420. Merger or Consolidation. Any company in which the Trustee may be merged or with which it may consolidate or any company resulting from any merger or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, if such company is a trust bank
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qualified to be a successor to the Trustee under the provisions of Section 1418 hereof, shall be the successor to the Trustee without any further act, deed, or conveyance.
Section 1421. Filing by Trustee. The Trustee covenants and agrees to take such action as is necessary from time to time to perfect or otherwise preserve the priority of the Net Revenues pledged to secure the payment of the Bond Requirements of the 2015 Bonds to the extent that such action can be accomplished by filing UCC continuation statements on UCC’s which have been filed by the Issuer, which list the Trustee as a secured party and copies of which have been provided to the Trustee.
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ARTICLE
XV AMENDMENT OF INSTRUMENT
Section 1501. Privilege of Amendments. This Instrument may be amended as provided in Section 1510 hereof without the need of obtaining consent of any of the holders of the 2015 Bonds. In addition, except for supplemental instruments adopted pursuant to Section 712 hereof which do not expressly or impliedly amend or otherwise modify this Instrument, and except as provided in Section 1502 hereof, this Instrument may be amended or supplemented by instruments adopted by the Board in accordance with the laws of the State, without receipt by the Issuer of any additional consideration, but with the written consent of the holders of 50.1% in aggregate principal amount of the 2015 Bonds and parity securities Outstanding at the time of the adoption of such amendatory or supplemental instrument, excluding, pursuant to paragraph (5), Section 102 B hereof, any 2015 Bonds which may then be held or owned for the account of the Issuer, but including such refunding securities as may be issued for the purpose of refunding any of the 2015 Bonds if such refunding securities are not owned by the Issuer.
Section 1502. Limitations upon Amendments. Unless the unanimous consent of the holders of the 2015 Bonds is obtained pursuant to Section 1507 hereof, no instrument shall permit:
A. Changing Payment. A change in the maturity or in the terms of redemption of the principal of any Outstanding 2015 Bond or any installment of interest thereon; or
B. Reducing Return. A reduction in the principal amount of any 2015 Bond, the rate of interest thereon, or any prior redemption premium payable in connection therewith, without the consent of the holder of the 2015 Bond; or
C. Prior Lien. The creation of a lien upon or a pledge of revenues ranking prior to the lien or the pledge created by this Instrument; or
D. Modifying Limitations upon Modifications. A reduction of the principal amount or percentages or otherwise affecting the description of 2015 Bonds or the consent of the holders of which is required for any such amendment or other modifications; or
E. Priorities Between Bonds. The establishment of priorities as between 2015 Bonds issued and Outstanding under the provisions of this Instrument; or
F. Partial Modification. Materially and prejudicially modifying or otherwise materially and prejudicially affecting the rights or privileges of the holders of less than all of the 2015 Bonds then Outstanding.
Section 1503. Notice of Amendment. Whenever the Board proposes to amend or modify this Instrument under the provisions of this article, it shall cause notice of the proposed
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amendment to be mailed: (i) within 30 days to the Trustee and each holder of the Outstanding 2015 Bonds and any parity securities; and (ii) within 10 days prior to the effective date thereof to Standard and Poor’s Rating Services and Moody’s Investors Service, Inc. Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy of the proposed amendatory instrument is on file in the office of the Secretary for public inspection.
Section 1504. Time for Amendment. Whenever at any time within one year from the date of the mailing of such notice, there shall be filed in the office of the Secretary an instrument or instruments executed by the holders of at least 50.1% in the aggregate principal amount of the 2015 Bonds and any parity securities then Outstanding, which instrument or instruments shall refer to the proposed amendatory instrument described in such notice shall specifically consent to and approve the adoption of such instrument, thereupon, but not otherwise, the Board may adopt such amendatory instrument and such instrument shall become effective.
Section 1505. Binding Consent to Amendment. If the holders of at least 50.1% in the aggregate principal amount of the 2015 Bonds and parity securities then Outstanding, at the time of the adoption of such amendatory instrument, or the predecessors in title of such holders, shall have consented to and approved the adoption thereof as herein provided, no holder of any bond whether or not such holder shall have consented to or shall have revoked any consent as in this article provided, shall have any right or interest to object to the adoption of such amendatory instrument or to object to any of the terms or provisions therein contained or to the operation thereof or to enjoin or restrain the Issuer from taking any action pursuant to the provisions thereof.
Section 1506. Time Consent Binding. Any consent given by the holder of a 2015 Bond and any parity securities pursuant to the provisions of this article shall be irrevocable for a period of 6 months from the date of the publication of the notice above provided for in Section 1503 and shall be conclusive and binding upon all future holders of the same bond during such period. Such consent may be revoked at any time after 6 months from the date of such mailing of such notice, by the holder who gave such consent or by a successor in title by filing notice of such revocation with the Secretary, but such revocation shall not be effective if the holders of 50.1% in aggregate principal amount of the 2015 Bonds Outstanding as in this article provided, prior to the attempted revocation, consented to and approved the amendatory instrument referred to in such revocation.
Section 1507. Unanimous Consent. Notwithstanding anything in the foregoing provisions of this article, the terms and the provisions of this Instrument or of any instrument amendatory thereof or supplemental thereto and the rights and the obligations of the Issuer and of the holders of the 2015 Bonds be amended or otherwise modified in any respect upon the adoption by the Issuer and upon the filing with the Secretary of an instrument to that effect and with the consent of the holders of all the then Outstanding 2015 Bonds, such consent to be given as provided in Section 1204 hereof; and no notice to holders of 2015 Bonds shall be required as
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provided in Section 1503 hereof, and the time of consent shall not be limited except as may be provided in such consent.
Section 1508. Exclusion of Issuer’s Bonds. At the time of any consent or of other action taken under this article, the Issuer shall furnish to the Secretary a certificate of the Treasurer, upon which the Issuer may rely, describing all bonds to be excluded, for the purpose of consent or of other action or of any calculation of Outstanding bonds provided for in this article, and the Issuer shall not be entitled with respect to such bonds to give any consent or to take any other action provided for in this article, pursuant to paragraph (5) of Section 102 B hereof.
Section 1509. Notation on Bonds. Bonds registered and delivered after the effective date of any action taken as in this article provided may bear a notation by endorsement or otherwise in form approved by the Board as to such action; and if and such bond so registered and delivered shall bear such notation, then upon demand of the holder of any bond Outstanding at such effective date and upon presentation of his bond for the purpose at the principal office of the Secretary, suitable notation shall be made on such bond by the Secretary as to any such action. If the Board so determines, new bonds so modified as in the opinion of the Board to conform to such action shall be prepared, registered, and delivered; and upon demand of the holder of any bond then Outstanding, exchanged without cost to such holder for bonds then Outstanding upon surrender of such bonds.
Section 1510. Amendments Not Requiring Bondholders’ Consent. The Issuer, acting by and through the Board, and the Trustee, notwithstanding the provisions of other sections of this article, and without the consent of or notice to any holder of any 2015 Bond, shall consent to any amendment, change, or modification of this Instrument as required:
A. Bond Resolution. By the provisions of this Instrument,
B. Curing Defects. With the consent of the bond insurer, if any, for the purpose of curing any ambiguity or formal defect or omission herein,
C. Additional Securities. In connection with the issuance and delivery of additional bonds or other securities payable from the Net Revenues, or
D. Other Change. With the consent of the bond insurer, if any, in connection with any other change herein which, in the judgment of the Trustee and in the opinion of bond counsel to the Issuer, is not to the prejudice of the Trustee or the holders of the 2015 Bonds or any parity securities then Outstanding.
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PASSED, APPROVED AND ADOPTED ON THIS September 10, 2005.
Andy Wirth, Chairman (SEAL)
Attest:
Nat Carasali, Secretary
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STATE OF NEVADA ) ) ss. COUNTY OF WASHOE )
I am the duly chosen and qualified Secretary of the Reno-Tahoe Airport Authority and in the performance of my duties as Secretary do hereby certify: 1. The foregoing pages are a full and correct copy of the record of proceedings of the Authority taken at a regular meeting thereof held on September 10, 2015, so far as such minutes relate to a resolution, a copy of which are therein set forth; and a copy of such resolution contained in such minutes is a true, correct, compared copy of the original proposed at such meeting. 2. All members of the Board were given due and proper notice of such meeting. 3. Said proceedings were duly had and taken as therein shown and the persons therein named were present at said meeting and voted on the resolution as follows:
Those Voting Aye:
Those Voting Nay:
Those Absent:
4. Public notice of such meeting was given and such meeting was held and conducted in full compliance with the provisions of NRS 241.020. A copy of the notice of meeting and excerpts from the agenda for the meeting relating to the resolution, as posted at least 3 working days in advance of the meeting on the Authority’s website, if any, the State’s website, and at:
(i) Reno-Tahoe Airport Authority Administrative Offices 89. 535681.003401.019
2001 E. Plumb Lane Reno, Nevada,
(ii) Reno City Hall One East First Street Reno, Nevada,
(iii) Sparks City Hall 431 Prater Way Sparks, Nevada, and
(iv) Washoe County Administration Complex 1001 E. Ninth Street Reno, Nevada, and is attached as Exhibit “A”.
5. At least three working days before such meeting, such notice was given to each member of the Board and to each person, if any, who has requested notice of meetings of the Board in accordance with the provisions of Chapter 241 of NRS. IN WITNESS WHEREOF, I have hereunto set my hand this September 10, 2015.
Nat Carasali, Secretary
90. 535681.003401.019 EXHIBIT A
BOARD OF TRUSTEES PRESIDENT/CEO Andy Wirth, Chair Marily M. Mora, A.A.E. Rick Murdock, Vice Chair EXECUTIVE VICE-PRESIDENT/COO Nat Carasali, Secretary Dean E. Schultz, A.A.E. Jerry Hall, Treasurer GENERAL COUNSEL Bill Eck Ann Morgan, Fennemore Craig Lisa Gianoli CLERK OF THE BOARD Adam Mayberry Claire Johnson Jenifer Rose Jessica Sferrazza
RENO-TAHOE AIRPORT AUTHORITY MEETING OF THE BOARD OF TRUSTEES September 10, 2015 9:00 a.m. Board Room, Administrative Offices Second Floor, Main Terminal Building Reno-Tahoe International Airport Reno, Nevada
Items V, VI, VIII, IX and XII are action items for the Board to consider. The Board may discuss a matter when it is brought up, but no action may be taken on it unless it has been specifically included on an agenda as an action item.
Public comment at the Board meeting will be allowed on agenda items as well as non-agenda items. Persons are invited to submit comments in writing on agenda items and/or attend and make comment on that item at the Board meeting. Requests to speak on a particular item should be submitted to the Clerk of the Board before the item is called by the Chairman.
I. PLEDGE OF ALLEGIANCE
II. ROLL CALL
III. PRESENTATIONS AND AWARDS A. Employee, Tenant and Special Recognition B. Introduction of New, Promoted and Retired Employees C. Tenant Communication
IV. PUBLIC COMMENT, if any – Limited to three minutes per person
V. APPROVAL OF MINUTES – August 13, 2015 Board Meeting Minutes
91. 535681.003401.019 VI. APPROVAL OF AGENDA
VII. COMMITTEE AND LIAISON REPORTS A. Finance and Business Development Committee B. Planning and Construction Committee C. Airport Noise Advisory Panel (ANAP) D. Community Outreach Committee (COC) E. Stead Liaison F. RSCVA Board G. Air Service Liaison H. The Chamber Reno Sparks Northern Nevada I. Reno-Tahoe International Airport Users Committee
VIII. CONSENT ITEMS FOR BOARD ACTION
A. None.
IX. ITEMS FOR BOARD INFORMATION, DISCUSSION AND POSSIBLE ACTION
A. #15(09)-35 Authorization for the President/CEO to Negotiate Final Terms and Execute a 5-Year Nonexclusive Gaming Concession License with International Game Technology PLC Commencing on December 1, 2015
B. #15(09)-36 Adoption of Resolution No. 526 to Authorize the Issuance of the Reno-Tahoe Airport Authority’s Airport Revenue Refunding Bond, Series 2015, not to Exceed the Aggregate Principal Amount of $22,000,000, Award the Purchase of the 2015 Bond to BBVA Compass Bank, and Authorize the President/CEO, or her Designee, to Negotiate and Execute any Documents Relating Thereto
X. ITEMS FOR BOARD INFORMATION AND DISCUSSION
A. Presentation 1. Community Outreach Campaign Update
B. Board Meeting Schedule 1. October 6, 2015 9:00 am Finance & Business Development Committee Meeting 2. October 6, 2015 10:00 am Planning & Construction Committee Meeting 3. October 8, 2015 9:00 am Board of Trustees Meeting 4. November 3, 2015 8:30 am Board of Trustees Retreat - Meeting Room at Squaw Valley 5. November 10, 2015 9:00 am Finance & Business Development Committee Meeting 6. November 10, 2015 10:00 am Planning & Construction Committee Meeting 7. November 12, 2015 9:00 am Board of Trustees Meeting 92. 535681.003401.019 C. President/CEO’s Report
D. General Board comments, questions, and items for future Board meetings
XI. PUBLIC COMMENT, if any – Limited to three minutes per person
XII. ADJOURNMENT
Items will not necessarily be considered in the sequence listed. This meeting may be continued if all of the items are not covered in the time allowed. If the meeting is to be continued, the time and place will be announced at the end of the portion of the meeting to be continued.
SUPPORTING MATERIAL: The designated contact to obtain supporting material is Claire Johnson, Clerk of the Board, P.O. Box 12490, Reno, NV, 89510 or 775-328-6410. Supporting material is also available at the Reno-Tahoe Airport (Administrative Offices) and at the scheduled meeting.
Members of the public who are disabled and require special accommodations or assistance at the meeting are requested to notify the Clerk of the Board in writing at P.O. Box 12490, Reno, Nevada 89510 or by calling (775) 328-6410 prior to the meeting date.
THIS AGENDA HAS BEEN POSTED AT THE FOLLOWING LOCATIONS: 1. Airport Authority Administrative Offices – 2001 E. Plumb Lane, Reno 2. Washoe County Administrative Offices – 1001 E. 9th Street, Reno 3. Reno City Hall – One East First Street, Reno 4. Sparks City Hall – 431 Prater Way, Sparks
93. 535681.003401.019 President/CEO’s Report August 2015 Marily M. Mora, A.A.E., President/CEO______Financial Summary • The following table summarizes the operating statement information for the one month period ending July 31, 2015:
Due to operating expenses being 6.8% below budget and a higher than anticipated revenue sharing credit, the airline cost per enplaned passenger is estimated to be $7.34 as compared to the budgeted cost per enplaned passenger of $8.39. The revenue budget above assumes one twelfth of the annual revenue budget is received. This approach typically results in above budget results due to high summer passenger traffic in July and August. These seasonal factors will likely be offset due to lower traffic levels typical of the fall months of September and October.
Parking Comparison
President/CEO’s Report – August 2015 September 10, 2015 Page 2 of 17
Air Service • Reno-Tahoe International Airport (RNO) served 350,823 passengers in July 2015, which is up 5.6% versus July 2014. The main reason for this year-over-year increase is the additional passengers on JetBlue Airways and Volaris Airlines flights. In addition to the new flights, the increased seat capacity on American Airlines and Delta Air Lines also contributed to the year-over-year passenger increase. During the first seven months of 2015, RNO served 1,962,735 passengers, representing an increase of 0.9% when compared to the same period last year.
TOTAL PASSENGERS
Total Passengers July-15 Passengers Passengers % Diff. % Diff. 2013 2014 2015 JAN 264,265 241,181 -8.7% 246,571 2.2% FEB 259,299 228,035 -12.1% 234,763 3.0% MAR 306,139 278,172 -9.1% 277,477 -0.2% 1st Quarter 829,703 747,388 -9.9% 758,811 1.5% APR 279,418 266,800 -4.5% 256,823 -3.7% MAY 295,494 282,277 -4.5% 276,969 -1.9% JUN 328,755 316,720 -3.7% 319,309 0.8% 2nd Quarter 903,667 865,797 -4.2% 853,101 -1.5% JUL 333,321 332,242 -0.3% 350,823 5.6% AUG 322,083 318,965 -1.0% SEP 283,800 284,931 0.4% 3rd Quarter 939,204 936,138 -0.3% OCT 262,473 266,701 1.6% NOV 227,213 225,384 -0.8% DEC 270,051 263,682 -2.4% 4th Quarter 759,737 749,592 -1.3% TOTAL 3,432,311 3,298,915 -3.9% YTD Total 1,945,427 1,962,735 0.9% President/CEO’s Report – August 2015 September 10, 2015 Page 3 of 17
• In July 2015, RNO was served by nine airlines providing 63 peak daily departures to 17 non-stop destinations. Total departures at RNO were down (3.6%) and the seat capacity increased 6.0% when compared to July 2014.
• JetBlue Airways began non-stop daily flights between RNO and New York City (JFK) on May 28, 2015. The airline is utilizing an Airbus 320 aircraft with 150 seats on this route.
• Starting November 5, 2015, Alaska Airlines will begin non-stop daily flights between RNO and Boise Airport. The airline will fly the route with a 76-seat Bombardier Q400 aircraft. The flight will depart Reno at 4:35 p.m. and arrive in Boise at 6:55 p.m. The return flight will depart Boise at 6:15 p.m. and arrive in Reno at 6:44 p.m. The Boise route also offers great connectivity into another popular market, Spokane, Washington, with only a half hour connect time.
• Starting mid-September, United Parcel Service (UPS) will add eight weekly flights to their current schedule at RNO. The additions include six Boeing 757s and two Airbus A300s.
• Starting late in the 4th quarter of 2015, DHL will increase their cargo capacity at RNO. Ameriflight, which operates Beechcraft 1900s on behalf of DHL, will be replaced with Southern Air. Southern Air will utilize a Boeing 737-400 for these flights.
• Recent and Upcoming Schedule Changes
Alaska Airlines Starting July 1, 2015, the new schedule for non-stop flights between Reno and San Jose are as follows: o San Jose to Reno: . AS2250 7:30AM-8:28AM . AS2500 6:00PM-6:56PM o Reno to San Jose: . AS2183 6:00AM-6:57AM . AS2253 4:30PM-5:28PM
American Airlines (Seasonal Reduction) rd o The 3 daily flight between Reno and Dallas will operate until September 8, 2015. The 5th daily flight between Reno and Los Angeles will operate until September 7, 2015. o th o The 5 AA/US daily flight to Phoenix will operate until September 7, 2015.
JetBlue Airways (Seasonal Reduction) Starting September 13, 2015, non-stop flights between Reno and New York City will be reduced to a four times a week schedule on Sunday, Monday, Thursday and Friday (no flight on September 12th).
United Airlines (Seasonal Reduction) The 3rd daily flight to Denver will operate until September 21, 2015.
President/CEO’s Report – August 2015 September 10, 2015 Page 4 of 17
• In regard to cargo tonnage, RNO handled 11,775,072 pounds of cargo in July 2015, an increase of 8.4% when compared to July 2014. RNO handled 73,159,819 pounds of air cargo during the first seven months of 2015, an increase of 4.2% when compared to the same period last year. TOTAL CARGO
Total Cargo July-15 2013 2014 2015 % Diff. % Diff. Cargo in Pounds Pounds Metric
JAN 10,269,546 10,303,380 0.3% 10,113,421 4,587 -1.8% FEB 8,635,807 9,486,697 9.9% 9,418,781 4,272 -0.7% MAR 9,457,376 9,758,391 3.2% 10,381,009 4,708 6.4% 1st Quarter 28,362,729 29,548,468 4.2% 29,913,211 13,566 1.2% APR 8,639,232 9,876,465 14.3% 10,416,248 4,724 5.5% MAY 9,398,212 10,269,963 9.3% 10,459,643 4,744 1.8% JUN 9,001,339 9,679,744 7.5% 10,595,645 4,805 9.5% 2nd Quarter 27,038,783 29,826,172 10.3% 31,471,536 14,273 5.5% JUL 10,149,807 10,863,843 7.0% 11,775,072 5,340 8.4% AUG 10,859,694 10,853,726 -0.1% SEP 9,689,115 10,127,014 4.5% 3rd Quarter 30,698,616 31,844,583 3.7% OCT 10,834,930 11,429,538 5.5% NOV 10,099,499 10,664,398 5.6% DEC 13,998,438 15,776,073 12.7% 4th Quarter 34,932,867 37,870,009 8.4% TOTAL 121,032,995 129,089,232 6.7% 70,238,483 73,159,819 33,179 4.2% YTD Total
President/CEO’s Report – August 2015 September 10, 2015 Page 5 of 17
Business Development
Reno-Stead Airport Economic Development (AED)
• UAS (Unmanned Aircraft Systems) The 2015 American Society for Photogrammetry and Remote Sensing (ASPRS) Symposium will be held in the Reno Ballroom on September 29 & 30, 2015. The 2-day Symposium will bring together academia, UAS developers, survey and mapping companies, government agencies, and UAS enthusiasts to share information and showcase new technologies, and will include test flights, UAS data processing, and workshops. Representatives from ASPRS have confirmed that Trimble and Altavian plan to conduct a live UAS demonstration flight at Reno-Stead Airport (RTS). Staff is working with ASPRS to gather the appropriate documentation for this event.
• Reno-Stead Airport Real Estate Development Opportunity Request for Qualifications (RFQ) At the February 12, 2015 Board of Trustees meeting, Dermody Properties was authorized to represent the RTAA in order to complete Phase 2 and Phase 3 of the Reno-Stead Airport Real Estate Development Opportunity RFQ. Completion of Phases 2 and 3 will allow Dermody Properties to identify market opportunities and financing strategies necessary to prepare a business plan and final agreement terms.
Staff met with stakeholders to provide updates on the RFQ process and next steps. Following meetings with the Reno Air Racing Association (RARA), Stead Airport tenants, and the North Valleys Citizen Advisory Board (CAB), staff gave a presentation to the Silver Knolls Property Owners Association (POA) on May 20, 2015. The purpose of the meeting was to provide information about the RFQ and the next steps to the residents living in the Silver Knolls development, which abuts Airport property.
In addition to stakeholder engagement, Dermody Properties (DP) continues to finish Phases 2 & 3, which included pursuing financial resources and investment partners. DP has done considerable due diligence resulting in the selection of a preferred investment partner. DP submitted an updated due diligence packet on May 22, 2015. Following this submittal, and review by staff and RTAA Legal Counsel, the CEO’s Land Development Working Group was convened on June 4, 2015 to allow DP to present their updated due diligence packet. Pursuant to the schedule in Dermody Properties’ presentation to the CEO’s Land Development Working Group on June 4th, and in accordance with the RFQ’s Phase 3, Dermody Properties is to submit a Development Proposal including proposed business terms to the RTAA within 90 days. Dermody Properties was advised that until the Phase 3 Development Proposal is presented to and approved by the Board of Trustees, no steps should be taken with respect to easements, railroad crossings, or permits.
Staff continues to attend the bi-monthly Washoe County North Valleys CAB meetings to provide regular updates on the RFQ process in an effort to keep the community informed about the RFQ. In addition, staff attended the City of Reno Ward 4 Neighborhood Advisory Board (NAB) meeting on August 20, 2015 to inform the community about the RFQ and stakeholder engagement efforts.
President/CEO’s Report – August 2015 September 10, 2015 Page 6 of 17
Reno-Stead Airport (RTS) General Aviation
• Aviation Classics Aviation Classics Ltd. (ACL), the Fixed Base Operator (FBO) located at Reno-Stead Airport, is currently in negotiations for a new 5-year FBO Agreement. The current FBO Agreement expired on May 31, 2015 and is now in month-to-month Hold Over pending a new agreement. Staff had anticipated bringing a new 5-year FBO Agreement to the Board prior to agreement expiration; however, ACL requested a second appraisal to confirm rental rate values prior to finalizing pending business terms. Staff has received the second appraisal and has provided a copy to ACL for review.
On August 18, 2015, ACL accepted the rent rate identified in the first appraisal; however, ACL requested additional time to identify a new capital improvement and refine the cost estimate associated with their capital investment that is required as part of the new agreement. Pending submittal by ACL of the proposed required capital investment, staff will present this item at a future Board of Trustees meeting.
Reno-Tahoe International Airport (RNO) General Aviation
• CEO Advisory Group on GA Minimum Standards The CEO’s Advisory Group continues to meet every two weeks and is making progress on the various tasks identified to complete the General Aviation Minimum Standards (GAMS) revision process.
As part of the process, the CEO Advisory Group created a qualitative, open-ended questionnaire on Survey Monkey and distributed it to Reno-Tahoe International Airport (RTIA) commercial tenants in July 2015. Fifty-seven invitations to participate were sent via email to RTIA commercial tenants, as well as local and regional aeronautical service providers. In addition to the initial email notifications, staff sent reminder emails and made calls to the 57 companies. Of the 57, seven responses were received or 12% of the invitations.
Another step in the process is a review of the draft edits to the RNO GAMS. Staff is compiling the proposed edits from the CEO Advisory Group members. Once the draft, revised RNO GAMS is reviewed and completed, the RTAA will host and the CEO Advisory Group will facilitate, a public workshop to discuss the survey results and proposed GAMS revisions for public comment. Staff has scheduled the public workshop for Thursday, October 8, 2015 at 5:00 pm in the RTAA River Room.
• Atlantic Aviation is in the process of reconstructing 705,000 square feet of aircraft ramp and installing a fuel storage facility on its leasehold. Granite Construction Company is the contractor for both the Taxiway C and ramp reconstruction projects, and will minimize impacts to tenants through construction phasing and tenant communications. The anticipated project completion date is November 30, 2015.
GA East - Hangar E
• Global Aviation Services, LLC, leased Hangar E (3,750 square feet) located on the GA East Ramp. The lease term is one year with one, 1-year extension option. Global Aviation Services, LLC, provides aviation support services through repairs and maintenance to airline ground service equipment. The minimum contract value is $19,050. President/CEO’s Report – August 2015 September 10, 2015 Page 7 of 17
Outside Commercial Properties
• 1280 Terminal Way
BizGeez.com A new twelve month commercial lease agreement was executed with BizGeez.com for 244 square feet of office space at 1280 Terminal Way. BizGeez.com is a start-up marketing company that develops and creates company websites. The total contract value is $2,342.40.
• Airport Mini Warehouse
Sierra Nevada Property Preservation, LLC A new twelve month commercial lease agreement was executed with Sierra Nevada Property Preservation, LLC for 2,000 square feet of commercial warehouse space at 2890 Vassar Street. Sierra Nevada Property Preservation, LLC provides property maintenance and handyman services and is primarily utilizing the space for equipment storage. The total contract value is $10,080.00.
Complete Care Carpet Cleaning Complete Care Carpet Cleaning (Complete Care), located in 6,778 square feet of commercial warehouse space at 2890 Vassar Street, was issued a default letter on July 1, 2015 for non- compliance of a variety of lease terms. The August 2015 rent and utility bills remain outstanding. Based on continued non-compliance of the lease, Complete Care was issued a termination letter on August 6, 2015 with a vacate date of August 31, 2015. The tenant has not vacated the property and therefore, the RTAA is in the process of eviction proceedings.
RNO Land Development
• Home Gardens Land Lease Dermody Properties (DP) provided an update to the CEO’s Land Development Working Group on February 12, 2015 regarding their participation in a Request for Proposal (RFP) issued in January 2015 by a Class A logistics company. DP was competing in a site selection process for a “build-to- suit” facility. DP believed that due to One Engine Inoperative (OEI) restrictions, this logistics company was the highest and best use tenant for this site, resulting in maximum utilization of the property and optimal revenue to the RTAA. RTAA agreed with DP and the continuation in the RFP process.
On August 26, 2015, DP hand-delivered a letter to staff indicating that the Home Gardens site was not selected for the build-to-suit project and as a result they could not build the site per the January 2014 Board approved terms. The letter confirmed that the RFP was awarded to a site at the Mustang Exit on Interstate 80.
Due to FAA limitations specifically related to the OEI height restrictions and the loss of the logistics tenant, DP is only interested in developing 27 acres under new terms. Staff informed DP that, because this site was awarded through a competitive process, the RTAA must take this property back to market through a public, competitive RFQ process for the entire 45 acre developable site based on the allowable building heights, and determine if the property can be developed with one or more uses, i.e. industrial, retail, etc.
President/CEO’s Report – August 2015 September 10, 2015 Page 8 of 17
• Airport West Reno Commercial Properties, a local real estate brokerage firm, submitted a Letter of Interest (LOI) on behalf of Skyline Holdings LLC for development of a Recreational Vehicle (RV) storage facility on a 5.18 acre parcel owned by the RTAA on the west side of Airway Drive between McCarran Boulevard and Peckham Lane. Staff responded to the LOI with initial proposed business terms outlining the RTAA’s terms for development of the property. Skyline Holdings LLC accepted the initially proposed business terms on April 16, 2015, and on May 29, 2015, Skyline Holdings LLC entered into a Right of Entry & Hold Harmless Agreement providing a 90-day due diligence period. Discussions with a representative for Skyline Holdings have indicated they continue to gather information to determine if the site is suitable for the proposed RV Storage development. Should Skyline Holdings LLC find the site viable, staff will bring this item to a future Board of Trustees meeting.
• Longley Corners LLC On May 21, 2015, the Board of Trustees authorized the President/CEO to negotiate final terms and execute a 30-year land lease with two 10-year options to extend with Longley Corners LLC for approximately 2.78 acres of land owned by the Reno-Tahoe Airport Authority, located east of Luther Lane between East Peckham Lane and South McCarran Boulevard. The land lease allows Longley Corners LLC to develop a storage facility with canopy structures similar to their existing operations across McCarran, offering storage for boats and recreational vehicles.
Subsequent to Board approval, Longley Corners has proposed to increase the capital investment by modifying the units along McCarran Boulevard to be enclosed rather than canopy covered. This design change along McCarran Boulevard will result in a higher quality product and improve the aesthetics along the property frontage. Staff is working closely with Longley Corners LLC to execute the ground lease based on these changes.
RNO Concessions
• SSP America SSP’s subtenant, Wild Garlic Pizza and Pub, a local pizzeria, has redeveloped the seating area across from its C-Concourse location to be a more open and inviting restaurant setting with multiple plug-in devices. New paint and wall decor and colorful tables and chairs have been added as an enticement for passengers to linger while they consume pizza, beer and new food offerings, such as Italian sausages, chicken, focaccia bread with dippers, and pasta with red peppers and mushrooms. Below is a photo of the Wild Garlic’s new look.
President/CEO’s Report – August 2015 September 10, 2015 Page 9 of 17
Project Status In Progress
Reno-Stead Airport
• Taxiway ‘C’ Reconstruction Project The project consists of reconstruction of approximately 25,000 square yards of Asphaltic Concrete (AC) pavement of the existing taxiway between Runways 8-26 and 14-32. The work consists of demolition, excavation, stabilizing fill and base material placement, utility relocation, asphalt pavement, and drainage improvements.
The Airport Improvement Program (AIP) grant offer for design services was issued by the Federal Aviation Administration (FAA) on August 8, 2013. The Professional Services Agreement (PSA) for design services with Wood Rodgers, Inc. for $345,500 was approved at the February 2014 Board of Trustees meeting. The design kick off meeting was conducted on April 23, 2014. A Basis of Design (BOD) review meeting was conducted May 28, 2014 to validate the design criteria. The 60% design review was conducted on June 27, 2014, and the final review was conducted on July 18, 2014.
The construction documents (plans and specifications) were issued for bids on July 24, 2014, with the bid opening conducted on August 13, 2014. The FAA grant for Phase 1 construction was accepted by the Reno-Tahoe Airport Authority (RTAA) on August 22, 2014. The Phase 1 construction contract with Granite Construction Company, in the amount of $1,402,235 was approved at the September 2014 Board of Trustees meeting.
Due to the Phase 1 grant offer being received late in the year, the contract was awarded with construction scheduled to start in spring 2015. This avoided having excavation areas open during inclement winter weather. A Pre-Construction meeting was conducted on February 17, 2015 and a Notice to Proceed (NTP) was issued for the procurement phase of the project. The NTP for the construction phase was issued for April 27, 2015 and construction of the Phase 1 work was substantially complete on June 13, 2015. President/CEO’s Report – August 2015 September 10, 2015 Page 10 of 17
In discussions with the FAA Airports District Office (ADO), RTAA staff emphasized the cost and schedule benefits of constructing Phases 1 and 2 concurrently in 2015. On May 12, 2015, the FAA ADO indicated additional AIP grant funding for Phase 2 construction of the project would be made available. Subsequently, a change order to the construction contract for Phase 2, in the amount of $1,593,655, was approved at the May 2015 Board meeting. The grant offer was issued by the FAA on August 10, 2015 and the subsequent change order for the Phase 2 work will be issued by the RTAA. Implementation of this change order allows for the full reconstruction of Taxiway “C” in 2015. The Phase 2 work will be scheduled after the National Championship Air Races in September.
• Annual Environmental Inspections As required by the State of Nevada Storm Water General Permit NVR050000, annual environmental and regulatory compliance inspections began in August 2015. These annual site visits are conducted to help identify potential environmental and regulatory compliance issues with Airport Authority and tenant operations occurring at the Reno-Stead Airport. An update on the results of the inspections will be available in September 2015.
Reno-Tahoe International Airport
• Taxiway ‘C’ Reconstruction Project The project consists of reconstruction of approximately 11,300 square yards of existing Asphaltic Concrete (AC) taxiway pavement. Taxiway C is east of Runway 16L-34R and serves the GA East Fixed Base Operator (FBO) facilities and aircraft parking aprons. The work consists of demolition and reconstruction of the existing taxiway between Taxiway D and Taxiway L. The project includes excavation, stabilizing fill, base, asphalt or concrete pavement, drainage, utilities, signage, and pavement markings.
The Basis of Design (BOD) report evaluated a cost comparison between asphalt and concrete pavement. Project requirements and design features for the project have been developed in collaboration with project stakeholders as part of the design process. The design services included construction phasing plans, an operational plan accommodating runway and taxiway closures, and contingency plans for aircraft operations during construction.
The AIP grant offer for design services was issued by the FAA on July 30, 2014. A Request for Qualifications (RFQ) was solicited in September 2014 and the Statements of Qualifications (SOQ) were evaluated by the Selection Committee on October 15, 2014. The Professional Services Agreement (PSA) for the design work with Wood Rodgers, Inc. in the amount of $595,800 was approved at the November 2014 Board of Trustees meeting.
The construction contract was issued for bids in April 2015, with the Pre-Bid meeting on April 16, and the bid opening on April 23, 2015. The construction contract with Granite Construction Company, in the amount of $8,308,308 was approved at the May 2015 Board meeting, contingent on a pending FAA grant offer. Programming of construction funding was discussed with FAA ADO Program Managers during their visits to Reno-Tahoe International Airport (RNO) on December 1, 2014 and on March 24, 2015. The FAA indicated that AIP entitlement funding is available, and requested the RTAA to submit a grant pre-application, pending the bid opening on April 23, 2015. Subsequent to the bid opening, the final grant application was submitted to the FAA on April 28, 2015. The grant offer was received in early July and construction began later that month. President/CEO’s Report – August 2015 September 10, 2015 Page 11 of 17
Stakeholder coordination meetings were conducted in March, April, and May 2015 with various stakeholders including: FAA, tenants, airlines, and Airport users. The Construction Phasing Plan was presented to the RTIA Users Group on May 18, the FAA Air Traffic Control and airport tenants at the Safety Risk Management System (SRMS) meeting on June 17, Airline Station Managers on June 23, and the Reno-Tahoe Aviation Group again on July 8, 2015.
Various taxiway and runway closures will be implemented during the course of construction, in accordance with the Construction Phasing Plan. The plan consists of ten separate work areas, with corresponding alterations to aircraft taxiing routes and Vehicle Service Road (VSR) alignments during construction. Tenant Bulletins will be issued for each phase of construction and other significant activities.
Additional coordination has been conducted to sequence the Taxiway C work with the Atlantic Aviation Apron Reconstruction project. The Atlantic Apron is a tenant improvement project scheduled to begin on August 10, 2015. Atlantic Aviation has retained Granite Construction Company as the contractor for the apron project. Ongoing meetings will be conducted to coordinate construction activities between both projects.
The Notice to Proceed for Taxiway C was issued to Granite Construction Company on July 27, 2015. Portions of Taxiway C are currently closed for construction and alternate aircraft taxiing routes are in effect. Asphalt paving for the north section of the new Vehicle Service Road (VSR) was completed on August 14. Work is currently underway on the north end of the new Taxiway “C” concrete pavement. Construction is scheduled for completion on January 22, 2016.
• Central Disposal Facility (CDF) Upgrade The project consists of improvements to the existing Central Disposal Facility (CDF) including structural modifications, roof refurbishment, overhead door retrofit, upgrade of the sand/water separator, plumbing modifications, electrical modifications, water service modifications, equipment replacement and site improvements. The facility consists of three separate bays for waste water and glycol disposal, vehicle wash down, and high pressure water and steam cleaning equipment. The facility provides disposal services for most of the airline Ground Service Equipment (GSE) and aircraft deicing glycol.
A Request for Qualifications (RFQ) was solicited in August 2013 for the selection of a Consultant for design services. Statements of Qualifications (SOQ) were received from submitting firms on September 12, 2013. The Professional Services Agreement for an initial Program Study with H+K Architects as the selected design consultant was issued by administrative award in November 2013. Project requirements and design features for the facility upgrade were discussed with project stakeholders, as part of the Program Study during coordination meetings on January 16 (RTAA Facilities) and January 21, 2014 (Airline Station Managers). Alternate locations for the facility were also evaluated prior to initiation of the design phase. The estimated budget for this program including soft costs is $1,500,000.
The design options and recommendations from the Program Study were presented at the June 2014 Planning and Construction Committee meeting. In agreement with the findings of the Program Study, Alternate 1 was determined to be the preferred design option. On this basis, the design fee proposal was subsequently negotiated with H+K Architects and was approved at the August 2014 Board of Trustees meeting. The 90% design package was submitted for review on March 5, 2015. President/CEO’s Report – August 2015 September 10, 2015 Page 12 of 17
The contract documents (plans and specifications) were issued for bids on May 7, with the Pre-Bid meeting on May 21, and the bid opening on June 9, 2015.
The construction contract in the amount of $918,370 with Walker River Construction as the low, responsive and responsible bidder was approved at the June 2015 Board meeting. The Pre- Construction meeting was conducted on June 23. The Notice to Proceed was issued on July 6, 2015. Temporary disposal facilities were completed on August 10 and the existing Central Disposal Facility was removed from service for construction of the building expansion and remodel. The project is scheduled for completion on December 2, 2015.
• Pavement Management System Program The Professional Services Agreement (PSA) with Stantec Consulting for the 2015 Airfield and Landside Pavement Management System (PMS) Program, in the amount of $238,200, was approved at the February 12, 2015 Board of Trustees meeting. The services consist of airfield pavement inspections (annual update), airfield pavement repairs and rehabilitation (design work - Phase 10), landside pavement inspections (annual update), and RNO landside pavement rehabilitation (design work - Parking Lot Reconstruction Phase 4). The program is funded from the Fiscal Year (FY) 2014-15 Capital Improvements Budget. 2015 Airfield Pavement Maintenance – A Notice to Proceed (NTP) was issued for Stantec to conduct design services and generate contract documents (plans and specifications) to originally be issued for bids in summer 2015. The Pre-Bid meeting, bid date, and start of construction will be determined during the design phase of the project. The bid opening will be coordinated with the subsequent presentation for a separate construction contract approval at the appropriate Board meeting. The construction schedule will also be developed during the design phase to establish duration and project milestone dates. This work will require closures of Runway 16R- 34L and Taxiway B. Presently, the project is being scheduled around the Taxiway “C” Reconstruction project, and is deferred to the spring of 2016. The Runway closure will be coordinated with RTAA Airside Operations, Airline Station Managers, and FAA Air Traffic Control.
2015 Landside Pavement Maintenance – A Notice to Proceed was issued for Stantec to conduct design services and generate contract documents (plans and specifications) to be issued for bids in May 2015. The Pre-Bid meeting was conducted on May 19, and the bid opening on May 28, 2015. The construction contract with Spanish Springs Construction, in the amount of $391,300 was approved at the June 2015 Board meeting.
The Notice to Proceed (NTP) was issued on July 13, 2015 and construction is scheduled for completion in early October 2015. This work will require closure of the south portion of the public parking lot in two separate phases. The parking lot closure has been coordinated with RTAA Landside Operations, and Marketing and Public Affairs. Phase 1 of the construction has been completed and that portion of the parking lot was returned to regular operations on July 31, 2015.
The next area of construction will require a 30 day period to vacate vehicles currently parked in the southwest portion of the lot. Phase 2 construction began on August 28th and is scheduled to be completed on October 2, 2015.
President/CEO’s Report – August 2015 September 10, 2015 Page 13 of 17
• Disadvantaged Business Enterprise (DBE) - Disparity Study Disparity studies are used to establish Disadvantaged Business Enterprise resource metrics for federally funded programs. The proposed study will quantify the availability of DBE resources and the actual utilization in contracts conducted by agencies. The potential differential between availability and utilization (i.e. “disparity”) will be examined to evaluate participation levels in contracts subject to DBE guidelines.
The RTAA entered into an Inter-Local Agreement (Board Memo #15(02)-05, dated February 4, 2015) with other public agencies (Consortium) for the purpose of conducting a Disparity Study. Joint participation allows the costs of the study to be pro-rated to the various agencies based on their history of capital projects. The participating agencies are McCarran International Airport (Clark County), Regional Transportation Commission of Southern Nevada (RTC – Southern Nevada), Regional Transportation Commission of Washoe County (RTC – Washoe County) and Reno-Tahoe Airport Authority (RTAA). The overall cost of the study is $689,215, with the RTAA share of $110,608.
BBC Consulting was retained by the Consortium to conduct the Disparity Study. The program initiation meetings were held in southern Nevada on August 10 and 11 and in northern Nevada (RTIA) on August 12. The first public hearing meeting will be held at RTC – Washoe County on October 21, 2015.
The study consists of thirteen separate project tasks including, public outreach, data gathering, market analysis and evaluation of DBE availability and utilization. The project timeline is fourteen months in duration and is scheduled for completion in September 2016.
• Annual Environmental Inspections As required by the State of Nevada Storm Water General Permit NVR050000, annual environmental and regulatory compliance inspections began in August 2015. These annual site visits are conducted to help identify potential environmental and regulatory compliance issues with Airport Authority and tenant operations occurring at the Reno-Tahoe International Airport. An update on the results of the inspections will be available in September 2015.
• Electronic Airport Layout Plan (eALP) and Geographic Information System (GIS) Project Arora Engineers, Inc. and Planning staff continue to work on the Federal Aviation Administration (FAA) approved electronic Airport Layout Plan (eALP) and Geographic Information System (GIS) business systems integration for Reno-Tahoe International Airport (RNO). Planning staff and the consultant are finalizing data quality checks on specific datasets prior to taking part in a beta test of the draft revision to the FAA eALP module. This beta test will allow Planning staff to evaluate and comment on ways the FAA can improve the eALP process that will benefit all of our peer airports.
Organizational Training & Development • Human Resources staff coordinated a series of three “Town Hall” meetings (formerly called “All Employee Meetings”) on all three shifts. These meetings provide two-way communications between management and employees. During these Town Hall meetings, the results from the Employee Satisfaction Survey conducted in May 2015 were shared with all employees. Employees were provided with information regarding overall scores, top answer themes to the open ended questions, comparisons with the previous 2013 employee survey, and plans for taking action with the results. President/CEO’s Report – August 2015 September 10, 2015 Page 14 of 17
Miscellaneous Information • The Airport’s social media strategy continues to be a success. Facebook followers are at 9,285 with a monthly post reach of 1.63 million, and Twitter is now at 4,519. Social media posts focused on promoting airline partners and fare sales, information about the Reno-Tahoe region, travel tips, #KindnessTakesFlight, partner promotions, Airport job postings, and the monthly employee photo contest.
• Staff has recently begun the process of redesigning the Airport Authority’s main website, www.renoairport.com. The redesign involves key initiatives including:
o Update to a responsive website design to accommodate the 53% of users accessing the site via mobile or tablet devices o Heavier incorporation of air service promotion o Update the look and feel of the site to align with the look and feel of the Airport following the Gateway reconstruction project o Incorporate a crisis communications strategy o Better integration of social media and online strategies
The planned launch date of the new site is early December 2015.
• Staff worked with the Reno Air Racing Association (RARA) on a sponsorship agreement for the 2015 National Championship Air Races. The agreement includes both a cash sponsorship as well as in-kind components. One of the key components is a display consisting of every poster for the National Championship Air Races dating from 1964 to 2013. When completed, the display will hang in the Freedom Flight Terminal building at the Reno-Stead Airport. The sponsorship agreement includes a flightline VIP Chalet where the Airport Authority will be hosting guests including airline representatives, economic development partners, and UAS industry representatives, as well as key community leaders.
• Airport staff partnered with the City of Reno and the Reno-Sparks Convention and Visitor’s Authority (RSCVA) to provide a special Burning Man welcome this year. The Reno eNVy AirStream welcome area was given a Burning Man theme. City of Reno Mayor Hillary Schieve joined the #KindnessTakesFlight team on Monday, Aug. 31st, in handing out snacks to Burners and taking photos to celebrate their arrival in to the Reno-Tahoe region. Local vendors Kimmie Candy Company and Nature’s Bakery donated handouts for the event.
• Once again, the Airport Authority partnered with the PGA Tour Barracuda Championship to welcome the athletes as they arrived into the Reno-Tahoe region. Staff worked with representatives from the tournament to provide a VIP welcome area, facilitation of transportation to/from the airport, and assistance during their departure from the area.
• The Airport’s #KindnessTakesFlight team celebrated National Aviation Day on August 19th by handing out airplane candy, coloring books & crayons to adults and children alike, as passengers made their way from security to their gates.
• A new art exhibit is now on display at the Airport. Burning Man: Through the Artists Lens, is a special display of over sixty photographs of artwork by three talented Burning Man photographers. In addition, a LOVE sculpture is on display, which is part of the Word Series by Jeff Schomberg. President/CEO’s Report – August 2015 September 10, 2015 Page 15 of 17
The Artists’ Reception & Opening was held on Thursday, August 13th, with over 125 guests in attendance. The Burning Man exhibit will be on display at RNO through October 19, 2015 in the depARTures Gallery.
• The Airport Authority has developed a community partnership with the Nevada Museum of Art. With the partnership, the Nevada Museum of Art signed a 5-year advertising contract with Clear Channel Airports, while also partnering with the RTAA to promote their newest exhibit, Tahoe: A Visual History display. In return, the Nevada Museum of Art will be providing the Airport with outreach and promotion of Airport initiatives. You can see the new display located in the terminal directly across from the depARTures Gallery.
• The River Room was utilized by about 40 Nevada Air National Guardsmen and their families for hospitality during a warm send-off prior to deployment on Saturday, Aug. 29th.
• Staff has conducted numerous interviews related to Burning Man with local TV, print and radio stations. Topics included:
o depARTures Gallery featuring playa photography o Busy arrivals o Burner Express Bus o Kiwanis Bike program o How the airline and Airport staff up to handle the departures and keep the Airport clean
The USA Today also featured an online blog about RNO’s Burning Man preparations.
• Aircraft Rescue and Firefighting Facility (ARFF) Solar System The 135-kilowatt solar system installed at the Reno-Tahoe Airport Authority’s Aircraft Rescue and Firefighting Facility (ARFF) has been fully operational since March 2011. Solar power generation results are provided below. Banked credits have been used during those months when not enough power is generated to cover the monthly use. As indicated in the table below, $3,631 in electrical costs were saved as a result of the solar system during the current 2015-2016 fiscal year period.
July Power Generation FY 2015-2016 2015 Energy Offset from Monthly Bill $3,631 $3,631 Energy Credits Banked $0 $0 Banked Credits Applied ($10) ($10) Total Earned $3,621 $3,621 Banked Credits Remaining NA $10,873
• Recycling at Reno-Tahoe International Airport Beginning July 2015, Airport staff has successfully collected approximately 0.075 tons of recyclable material during the FY 2015-2016 period. These recyclables equate to a 0.07 percent diversion rate of the Airport’s total waste volume. An annual recycling objective remains set at 10 percent. Due to recently implemented hauling cost-reduction measures, collected recyclables will no longer be transported monthly to local recycling centers. Staff will accumulate recyclables for longer periods of time before transportation, thereby decreasing the number of annual trips. As a result, during some months there will be no reportable quantities for certain materials, as illustrated below for July 2015. President/CEO’s Report – August 2015 September 10, 2015 Page 16 of 17
Material July 2015 FY 2015-2016 (Tons) (Total Tons) Cardboard 0 0 Mixed Paper 0 0 Glass 0 0 Batteries 0.072 0.10 Beverage Containers 0 0 Total 0.072 0.10
Quarterly Strategic Plan Update
Next Quarterly Strategic Plan Update – October 2015 Report
Legislative/Government Affairs Update • In support of the RTAA, McDonald·Carano·Wilson (MCW) Government Affairs Group engaged in the following meetings and activities during August:
In late July, facilitated a phone meeting between Tina Iftiger, Vice President of Airport Economic Development, and a private sector member of the Governor’s trade mission, to discuss outreach to major German companies that might be interested in the development at Reno-Stead Airport.
On August 4, 2015, provided an aviation abatement update to the Nevada Business Aviation Association (NVBAA) members at a Las Vegas breakfast meeting. MCW provided handouts with details on the new statute and requirements for the abatement, as well as the status of pending applications. The presentation was coordinated with the local Regional Development Authority (RDA), the Las Vegas Global Economic Alliance, and with the Governor’s Office of Economic Development (GOED). o NVBAA’s regional representative, Stacy Howard, was at the breakfast and MCW provided her with a complete update about the abatement program. Ms. Howard was also provided an electronic copy of MCW’s summary for her use with her members.
On August 7th, had breakfast with Assemblywoman Irene Bustamante Adams for a general visit touching on multiple topics, including abatement application status for the upcoming application cycle.
On August 13th, attended the kick-off Republican Senate fundraiser in northern Nevada. Was able to engage in general conversation with Senators Roberson, Kieckhefer, Harris, Lipparelli, Gustavson, Settelmeyer and Hardy.
On August 17the, met with Congresswoman Dina Titus’ staff to kick off the planning for the “Titus Aviation Symposium 2016”. This is the same working group of three who planned the original symposium (MCW, Titus’ District Director Michael Naft, and aviation attorney Justine Harrison). Reviewed attendee surveys and, using that information, plan to expand the symposium in both duration and scope. President/CEO’s Report – August 2015 September 10, 2015 Page 17 of 17
o This small working group is separate and distinct from the “Aviation Advisory Council” announced by Congresswoman Titus at the inaugural symposium. She has not yet appointed members to that council.
On August 18th, attended the Senate Republican Caucus event in Las Vegas. Visited with Congressional candidate Michael Roberson and all Senators in attendance.
On August 25th, had a phone conversation with Dean Schultz, RTAA Executive Vice President/COO, for a briefing on the upcoming American Association of Airport Executives (AAAE) event to be held in Las Vegas in November 2015. The event will have a UAS focus.
On August 26th, had a phone conversation with Mr. Schultz to strategize elected representative attendance at AAAE/UAS November 2015 event. AAAE will partner with the Aerospace States Association (ASA), of which Nevada Lt. Governor Mark Hutchison is Vice Chair.
On August 26th, met with GOED Business Development Specialist (Las Vegas office) Wendy Pope. Discussed upcoming aviation abatement applications and statutory privacy of information protection for applicants.
On August 27th, met with Brigadier General Robert Herbert, Senior Policy Advisor and Director of Appropriations, and Greg Pollock, Legislative Fellow for U.S. Senator Harry Reid. Discussed multiple issues including the aviation abatement. Briefed Mr. Herbert on abatement application status to date. Discussed Homeland Security funding, or lack thereof, and grant opportunities.
Attended regulatory hearings on Uber and provided timely meeting notes to RTAA administration.
Attended the Reno-Sparks Convention and Visitors Authority (RSCVA) board and marketing committee meetings, and provided meeting notes to RTAA administration. th o At the August 27 meeting, the consulting firm of Conventions, Sports & Leisure presented its preliminary findings in the Strategic Plan and Strategic Assessment Study. In their “Recommendation Pillars”, the consultants list “increase RSCVA funding for air support as opportunities arise.”
Continued to monitor the Washoe County Commission agendas and providing notice about items of possible interest to RTAA administration. th o At the August 11 meeting, the Commission adopted an ordinance to establish the boundaries of a certain district for the imposition of a surcharge on hotel room rentals as required by Senate Bill (SB) 312.
Presentations • Staff gave a presentation to the City of Reno’s Neighborhood Advisory Board, Ward 3, providing an overview of air service, current economic development efforts, and an update on the Airport’s noise and sound insulation program.