PRESENTER: Presenter
Becky Wiatrek, Assistant Director of Finance
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SUBJECT: Title
Approval of a Budget Amendment for the FY 2026 Airport Fund.
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DEPARTMENT: Finance
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COUNCIL DISTRICTS IMPACTED: N/A
BACKGROUND INFORMATION:
The Airport Fund is experiencing higher-than-budgeted revenues in FY 2026, primarily due to increased fuel sales volume and higher fuel prices. The FY 2026 Budget includes $3,872,000 in revenues from services, including cost of goods sold revenue. Based on current activity, revenues from services are projected to total approximately $5,542,694, representing an increase of $1,670,694 over budget. The FY 2026 Budget assumed approximately 800,000 gallons of fuel would be sold at the Airport; however, current activity indicates that approximately 917,000 gallons are expected to be sold during the fiscal year. The combination of higher fuel sales volume and increased fuel prices has resulted in service revenues exceeding the original budget.
In addition to higher fuel-related revenues, the Airport Fund is recognizing additional grant revenue associated with a Texas Department of Transportation (TxDOT)-funded airport fence project. A prior budget amendment approved on April 27, 2026, included $859,052 for the project. After excluding $185,701 related to the feasibility study, eligible project costs total $673,351. TxDOT is expected to fund 95% of these eligible costs, resulting in approximately $639,683 in additional grant revenue.
The expenditure portion of the budget amendment includes increases to both Employee Expenditures and Operating Expenditures. The increase in Employee Expenditures is primarily related to higher overtime costs resulting from increased fuel sales activity, as well as vacancies within the department.
The increase in Operating Expenditures is related to an increase in fuel costs as mentioned above, remediation and replacement of critical tower communications equipment, along with two projects that were rolled forward from FY 2025 into FY 2026.
The Air Traffic Control Tower has been owned and operated by the City of New Braunfels since 2008. Originally designed and constructed as a training tower in 2007, the equipment has gradually been replaced as needed. However, in recent years, there have been ongoing challenges experienced with existing mission critical tower communications equipment. The amendment provides an additional $43,700 for remediation and replacement of critical tower communications and safety equipment such as the existing air to ground transmitter/receiver, standby radio, antennas and a reprogramming of the existing voice communications control system for greater redundancy in the event of a primary radio failure. Additionally, the budget amendment includes $31,000 in additional budget authority to begin an annual preventative maintenance plan for the tower communications equipment. This equipment is essential to maintain safe and efficient air operations in the above and surrounding airspace of KBAZ (New Braunfels National Airport).
The first project, the Area Drainage Master Plan project requires an additional $65,000 in expenditure authority to complete the remaining project work. FY 2025 expenditures were lower than originally anticipated, resulting in a portion of the planned expenditures being deferred to FY 2026. The proposed amendment provides the necessary authority for these remaining costs and reflects only a change in the timing of expenditures, with no increase to the overall project scope or cost.
The second project, the Routine Airport Maintenance Program (RAMP), a reimbursable grant project, requires an additional $75,000 in expenditure authority for remaining grant-funded costs that were rolled forward from FY 2025 into FY 2026. Under the RAMP program, the Airport incurs eligible project expenditures and subsequently receives reimbursement for those costs. The required 10% City match has already been included in the FY 2026 Budget. Therefore, the proposed amendment provides expenditure authority for the remaining RAMP costs, which will be fully offset by reimbursable grant revenue.
Proposed Budget Amendment
The proposed amendment would increase the Airport Fund revenue budget by $2,310,377 and increase the expenditure budget by $1,250,000.
Revenue -Total Increase: $2,310,377
• Increase Services/Goods Sold Revenues - $1,670,694
Reflects higher-than-budgeted fuel sales resulting from increased fuel volume and higher fuel prices. The Airport is projected to sell approximately 917,000 gallons of fuel compared to the 800,000 gallons assumed in the FY 2026 Budget.
• Increase TxDOT Grant Revenue - $639,683
Reflects the anticipated 95% TxDOT funding for the Airport fence project. The calculation is based on the previously approved project amount of $859,052, less $185,701 for the feasibility study, with the remaining eligible project costs funded at 95% by TxDOT.
Expenditures -Total Increase: $1,250,000
• Increase Employee Expenditures - $50,000
Provides additional funding to maintain current service levels and keep overtime expenditures within budget due to increased fuel sales activity and additional positions added during the fiscal year.
• Increase Operating Expenditures - $1,200,000
Additional operating funding is needed for:
o $985,300 for fuel purchases for resale;
o 74,700 for the remediation and replacement of critical tower communications and safety equipment
o $75,000 for the RAMP grant that was rolled from FY25 included in facility maintenance costs; and
o $65,000 for the Area Drainage Master Plan, which was rolled forward from FY 2025 due to lower-than-anticipated FY 2025 expenditures. The additional FY 2026 budget authority reflects a timing shift in project spending.
ISSUE:
N/A
STRATEGIC PLAN REFERENCE:
N/A Economic Mobility N/A Enhanced Connectivity N/A Community Identity
YES Organizational Excellence N/A Community Well-Being
[Enter Objectives/Performance Measures Supported]
FISCAL IMPACT:
The proposed amendment would increase Airport Fund revenues by $2,310,377 and expenditures by $1,250,000, resulting in a net increase of $1,060,377 to projected Airport Fund balance. The amendment will align the FY 2026 Budget with current revenue and expenditure projections, provide sufficient funding to support increased fuel sales and current service levels, and provide expenditure authority for reimbursable grant projects.
Recommendation
RECOMMENDATION:
Staff recommends approval of the proposed FY 2026 Airport Fund budget amendment.