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Airport and solid‑waste funds face structural shortfalls; staff outline causes and next steps
Summary
Staff reported the airport fund has required general fund support since FY2025 and is projected to need another $150,000 ongoing starting in FY2026; solid waste faces an ongoing structural deficit driven by parts, fuel and recycling market changes.
City staff told the council that two enterprise funds—airport and solid waste—are facing structural challenges that will affect FY2026 planning.
Brady Sudo and airport and public works staff said the airport fund stopped being self‑sufficient in FY2025 and required a $200,000 transfer from the general fund to balance operations. Staff identified several causes: lower commercial ad revenue, lower paid‑parking revenue than projected (partly linked to reduced airline service), discontinuation of a small TSA law enforcement reimbursement that had previously offset police costs at the airport, increased airfield and maintenance costs, and index‑B ARFF staffing requirements that need 24/7 coverage for higher activity levels. Brian Gull, the city’s airport director, explained that airline scheduling and national pilot staffing trends affect service and that rental car activity and nonairline uses are important revenue sources.
On solid waste, staff reported ongoing structural pressure that has led to operational costs exceeding budget over several years. Drivers are higher parts and fuel costs, increased contract costs for recycling/processing, competition for CDL drivers and higher overtime. Public works staff said current projections show an ongoing structural deficit of roughly $320,000 annually for the solid waste fund; staff have implemented service delivery changes and will present additional strategies during tomorrow’s “balancing needs” session.
Council asked staff about regional comparisons: public works staff said several cost drivers—parts, fuel, truck replacement costs and depressed recycling commodity markets—are regional and national trends not unique to Flagstaff.
Ending: Staff advised that both funds will require targeted solutions and that the council will review detailed plans and possible revenue or service adjustments during the retreat’s budget‑balancing sessions.
