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( 925
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8, 2015 VIA EMAIL, FACSIMILE, and US MAIL Randall
S. Fiertz Director, Airport Compliance and Management Analysis Federal Aviation Administration 800 Independence Ave., SW Washington, DC 20591 Email: fiertz@faa.gov, randall.fiertz@faa.gov Facsimile: (202) 267-5257

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Inaurt·r RE:City of Concord, California Response and Action Plan astoFAA Policy Change 79FR 66282-01, Docket FAA-2013-0988 dated November 25,2015 ("FAA Policy Change") Dear Mr. Fiertz: The City of Concord, California ("City") voters adopted

alocal revenuemeasure
in November
of 2010 and extended that taxin November 2014 ("Measure Q"). Measure
Q established

a general transacti onand usetax ("sales tax") of 0.5% and is codified
atTitle
3 (Revenue and Finance), Chapter
3.15 (Taxation) Article
V
( Tran

sactions and Use Tax)

,Sections 3.15.360 through 3.15.500 of the Concord (Cal

i fornia) Munic ip al Code. While the City has not yet fully analy zed the validity of the FAA Policy Change,
tothe extent that it does apply, that Measure
Q imposed

asal estaxonjet f uel ,and that such taxeshave been and/orwill be collected and actual ly paid tothe City, th e City's re sponseand action plan is as follows: 1.Airport Identification.

A portion of Buchanan Field Airport
is located
in Concord, California,

while a portion is located in Co ntraCosta County, outside of Concord City limi ts. Flight paths areoverthe C ity, and the Airport Overlay District of the City is s ubject tothe Contra Costa County airpo rtland use compatibili ty plan (ALUCP) adopted

b ythe Contra Costa County airport land usecommission
(A LU C). The City neither ownsnor operates Bu chanan Field Airport. The City is informed, but has notconfirmed

,that Buchanan Field Airport has appli ed for Federa

l funding under the Airport Improvement Program and has thereby signe d acontract assuring that

l oca
l governmenttaxesonjet fuel will be used for specified purposes.Should this notbe the case,then th eFAA Policy Change
is inapplicable '

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d or gand this action plan is void ab initio. 2. Portion Of General Sales Tax Revenues Derived From Jet Fuel. The City has been informed by Buchanan Airport administrative staff that jet fuel pumps reside entirely
in the County._ outside of the city limits. City contracts with the State Board of Equalization (BOE) for sales tax collections. However, the BOE does not require jet fuel sellers to segregate sales tax revenue derived from the sale of jet fuel from other types of taxable sales made by the same vendor. Therefore, neither the BOE nor the City currently segregate the general sales tax revenue derived from jet fuel from other taxable sales. Consequently,

it is presently impossible for Concord
to determine
if any sales tax is derived from sales of jet fuel. It is also difficult
to estimate the portion of general sales tax revenues derived from jet fuel because of the confidential nature of taxpayer data and other logistical problems.
In addition, any estimate

is subject
to volatility based on the fluctuating price of jet fuel and other calculations. With those limitations

in mind, at present, City estimates that no portion of City's affected general sales tax revenues

is derived from jet fuel. 3. City Expenditures

in Support of Buchanan Field Aimort. City provides extensive services
to the Buchanan Field Airport. Based on the information currently available City believes that it spends considerably more on supporting Buchanan Field Airpmt than the relevant sales tax revenue estimated

to be derived from jet fuel. City's expenditures
on airport capital and operating costs include, but are not limited to: o Public safety services o Access to and from the airports, including streets and roads o Infrastructure, including sewer 4. Confirmation
of Expenditures. City wishes to take advantage of the transition period from now until December

8. 2017 that the FAA has offered to achieve compliance with the ruling. We anticipate that creating an internal compliance process will take some time because, for the reasons described above, developing

a tracking system for discrete information
on jet fuel tax revenues will be complex and extensive. Over the next two years, City intends to confirm that it complies with the FAA Policy Change based on its expenditures
of impacted sales tax revenues on capital and operating costs for Buchanan Field Airport. City will therefore continue
to refine its estimates of both relevant sales tax revenue and expenditures on capital and operating costs

for Buchanan Field Airport.
If, contrary
to current expectations, City determines that its expenditures
on airport capital and operating costs do not exceed sales tax revenues derived from jet fuel, it will consider legislative solutions
as necessary.

If legislative changes are necessary.

as a general tax, voter approval would be required to amend the ordinance imposing the tax. 5. Reservation
of Rights. Notwithstanding anything
in this Jetter to the contrary, City reserves the right to contest the validity and/or applicability
of the FAA Policy Change, and to pursue any and all actions, whether
in law or equity, as City determines necessary
or desirable.Sincerely, Karan Reid Director of Finance cc:Valerie

J. Barone, City Manager Brian M. Libow, Interim City Attorney JamesT. Brown, Finance Management, FAA (James.T.Brown@faa.gov) Jay Chamberlain. Department
of Finance (Jay.Chan1berlain@dofca.gov)