SAN MATEO COUNTY 

## Tran sportation Authority

December 22 ,. 2015
James T. Brown !Finance Management Federal Aviation Administration 800 Independence Ave
. , SW Washington , DC 20591 ,, ..., ... .



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## . B OA RD O F D IR ECTOR S 2 0 1 5 KAR YL M ATSU MOTO, C H A I R D AVID C AN EPA , V IC E CHAIR CAROLE GR OOM D ON H ORSLEY CAM E R ON J OH NSON T FRRY NAGF. I MARY A NN NIH ART J IM H A RTNETT ExEC UTIVE D I RECTOR

Re: San Mateo County Transportation Authority's Action Plan Responding to FAA Po li cy Cha nge 79 FR 66282-01; Docket FAA-2013-0988 Dea r Mr
. Brown : T he San Mateo County Transportation Authority ("Transportation Authority") writes to address the Federal Aviation Administration's (" FAA") request for an action plan in response to the FAA's amendment of its Policy and Procedures Concerning the Use of Airport Revenue ; Proceeds From Taxes on Aviation Fuel ("Policy")
. The Policy confirms the FAA's i nterpretation that , in accordance with 49 U.S.C. 

### § 47107(b) and 49 U
.S.C
. 

### § 47133(a) , proceeds from taxes , i ncluding sales taxes, on aviation fue l may on ly be used for airport- related purposes . The Policy exempts from the restrictions any taxes in effect on December 30, 1987. We appreciate your grant of our request to submit this response after the December 8, 2015 deadline
. The Transportation Autho rity only recently learned of this Po l icy and we have been trying to comprehend the lega l authority and justification for this rule as well as assess its implication and potent ial financial affect on our agency . In 2004, the voters of San Mateo County, California adopted Measure A to reauthorize, for 25 years , an existing
. 5% transact ions and use tax to address traffic and transportation needs. Un d er Cal ifornia law, this tax is considered a "special tax" and requires a two-thirds voter approval. The Transpo rtation Authority i s the entity established to adm i n i ster and appropriate revenues from Measure A in accordance with a Transportation E xpenditu re Plan ("TEP ") which was presented to and approved by the voters with the Measure A tax . Under applicable state l aw, Measure A sales tax revenues cannot be used o r appropriated to any program o r p roject not specifically contained i n the TEP w ithout voter approval of an amendment to the TEP wh i ch would allow for such approp riation. It is our understanding that the Measure A sales tax applies to the sale of aviation fuel. However, the T ransportat ion Autho rity does not have any data or any means to obtain data as to the amount of sales tax revenues its receives from the sale of aviation fuel. Measure A revenue derived from aviation fue l is not specifically identif ied or segregated from other sales tax revenues that the T ransportation Authority receives f rom t h e State Board of E qualization
. We understand t hat the State is evaluati ng its systems that account for and track sales tax revenues in this regard
. SAN MATEO COUNTY TRANSPORTATI ON AUTHORITY 1250 San Carl os Ave. - P.O
. Box 3006 Sa n C a rl os , CA 94 070- 1306 (650)508-62 19James 

### T. Brown December 22 , 2015 Page 2
You may be awa re of the unique geographic circumstances in San Mateo County related to a i rports . T he County has three airports , the largest be i ng San Franci sco International Ai rport (" SFO "). A ll revenues derived from SFO inure to the benefit of the C ity and County of San Francisco , our ne ighboring county to the north , as well as the people who use or are employed by SFO
. The County of San Mateo and all the communities surrounding SFO are burdened with the externalities of the airport : traffic, noise, pollution , security ri sks , crime and odors
. Local tax revenues and resources from San Mateo County and its communities are already devoted to addressing these externalities, which necessitate support of improvements/ maintenance of streets , roads and other infrastructure , all forms of public transportation, law enforcement, public safety, fire protection , environmental mitigations and noise abatement. This requisite local tax support occurs without the benefit of offsetting revenues from SFO or the City and County of San Francisco to defray these costs. Against this background, the Po l icy seems to require the reappropriation of additional local tax revenues to support SFO capital facilities and operations
. We question the FAA's power to require and the inherent equity of the devotion of more San Mateo County local sales tax resources , and specifically revenues from our "self help " county' s voter approved special sales tax , for the benefit of the San Francisco Internati onal Airport
. Moreover, a federal government reappropriation of local Measure A revenues in this manner destabilizes the Transportation Authority' s fund i ng base and undermines its ab i lity to engage in debt f i nancing
. As previously mentioned , the authority for and purpose of the Measure A sal es tax have been approved by a super-majority vote of the San Mateo County electorate and cannot be changed wit hout another super-majority vote. Nevertheless , the current TEP includes projects and programs that support the capital facilities and the operations of SFO in a number of significant ways, as described below
. • The Transportation Authority sends to the Bay Area Rapid Transit ("BART") every year two percent (2%) of its annual sales tax receipts to pay the County' s "buy in" share of the BART system extension into SFO. We note the FAA's Policy and Procedures Concerning the Use of Airport Revenue (64 FR 7696) specifically discussed the FAA's decision to approve the use of airport revenue for the structures and equipment related to the construction of the extension. In Fiscal Year 2014-15 , the 2% payment from the annual sales tax receipts sent to BART for the SFO extension exceeded $1.620 million
. • The Transportation Authority appropriates up to 24% of it s sales tax revenues annually (approximately $19 million i n Fi scal Year 2014-15) to support the Caltrain system wh ich serves the M ill brae i ntermoda l station that feeds passengers to SFO , as we ll as bus shuttles and paratransit servi ces . These ope rations facilitate the transport of passengers to and from SFO
. • A substantial amount of Measu re A revenue is spent on improvements to the U
. S
. Highway 101 freeway wh ich runs adjacent to SFO and provides the primary egress and i ngress for airport passenger vehicle traffi c . The 101 improvements , such as interchange upgrades/reconfigurations and auxiliary lanes , are financed heavily with Measure A funds and constitute multi-million dollar projects
.

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### T. Brown December 22, 2015 Page 3

• Each year, 22.5% of Measure A revenues are provided to local cities in the County for improvements of arterials and streets that feed, benefit and serve Highway 101 and the local airport system. Clearly, the San Francisco International Airport is a huge beneficiary of the transportation programs and projects supported with Measure A revenues every year. The Transportation Authority is confident that its expe nditures under the existing 

### TEP in support of SFO exceed any aviation fuel sales tax revenue that may be subject to the Policy. We intend to monitor information that the State Board of Equalization may make available to us in the months to come which may further clarify and confirm compliance with the Policy.

cc: Seamus Murphy, Chief Communications Officer Gigi Harrington, Chief Administrative Officer April Chan, Chief Officer, Planning, Grants and Transportation Authority Joan Gassman, Hanson Bridgett

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