Committee sends $3 billion SFO revenue bond package and appropriation to full board

San Francisco’s Budget and Finance Committee on Jan. 22 moved to forward to the full Board of Supervisors a resolution to authorize up to $3,000,000,000 in second-series revenue bonds for San Francisco International Airport (SFO) and an ordinance to appropriate $3,800,000,000 of bond or commercial paper proceeds to the Airport Commission, placing those proceeds on the controller’s reserve pending receipt.

Kathy Widener of the San Francisco International Airport told the committee the resolution had been amended per the Budget Analyst’s Office and an updated version was supplied to the clerk. Kevin Cohn, SFO’s managing director of finance, described the airport’s master bond resolution and the independent feasibility reports that accompany bond issuances. Cohn said the airport requires 1.25 times coverage for debt service and that a 10% “shock test” in the feasibility study still produced coverage ratios of roughly 1.42 down to 1.34 through the 2018–2025 forecast period.

“To put that in perspective,” Cohn said, “after 9/11 San Francisco Airport lost 25% in traffic. We never missed a beat with financial obligations.” He characterized a 10% traffic drop as conservative and said that, even under that scenario and with capital projects continuing, projections still meet required coverage levels.

Supervisor Rafael Mandelman asked about recovery time after severe traffic declines; Cohn replied it took about 10 years to recover after 2001. Cohn estimated historically that debt service has ranged roughly 40–45% of the airport’s budget, but he did not provide exact historical figures on the record.

Chair Sandra Lee Feuer moved items 1 and 2 to the full Board with a positive recommendation; the motion passed without objection.

The Board will take up the formal bond authorization and appropriation on its Jan. 28 agenda.