Airport Revenues

Denton Enterprise Airport derives most of its revenues from rent on ground leases, fuel flowage fees assessed on fixed based operators, hanger and tie down fees assessed on fixed based operators and gas well royalties. The graph below shows an overview of operational revenue since 2014. Overall revenues have shown steady growth has been driven by lease revenues, hangar rentals, and tie down fees. Fuel flowage revenues have remained flat and highly variable, despite the substantial growth in airport operations and based aircraft.

Revenues from airport gas leases can best be described as highly inconsistent. The graph below shows revenues from this source over the last 10 years. While two of those years show revenues at or above $1 million, most years will show revenues at $400,000 or less. Of concern is the overall downward trend of these revenues during that time. It is the Airport's assessment that the gas lease revenues cannot be counted on for future ongoing operational costs, due to its unpredictable and variable nature.

Airport Expenditures

Expenditures for the Airport can generally be categorized as personnel-related, operational and supply costs, cost of service payments, and debt service payments. Over the past 10 years, operational costs have remained relatively stable. The airport fund began making payments on its own debt service in 2021, and the key driver of expenditures has primarily been infrastructure project-related debt. Prior to this, the city of Denton general fund made these payments which were supplemented by gas lease revenue.

While the airport can fund its operations through existing revenues, the significant reduction in gas lease revenue coupled with project-related debt payments have presented a significant financial challenge.

The attached proforma, developed as part of the 2024-25 Denton Budget, shows our anticipated revenues and expenditures over the next five years. Currently, future Airport revenues cannot sustain anticipated expenses and, as a result, the airport will utilize and exhaust its fund balance in that time.

Summary of Financial Condition

1. There has been substantial operational growth over the previous 10 years that will continue into the future.
2. There are significant infrastructure needs that must be addressed
3. Increasing costs and declining gas well revenues have created an unsustainable financial outlook.
4. The Airport Fund will deplete its reserve in FY2028-29
5. Maintaining the status quo with respect to Airport finances is not an option.