Houston Airport System Director Jim Sechniak and Chief Financial Officer Clint Steven told the City Council budget workshop that the airport system’s proposed fiscal year 2026 budget projects $738,700,000 in total revenue, a 4.8% increase over the FY25 estimate, and that an accounting change will move roughly $62,800,000 in Skyway and parking contract costs from the airport’s AIF fund into its operating (O&M) budget.

The reclassification is intended to make recurring contract costs more transparent, Sechniak said, and to simplify questions from rating agencies and underwriters. “It looks like an expense. It smells like an expense, so we’re going to move it back into operating expense,” Clint Steven said during the presentation.

Why it matters: moving the Skyway maintenance and parking contracts into O&M makes those costs visible in the airport’s operating budget and creates an across-the-board increase in contracted services charges and O&M totals even though officials told council the underlying activity has not increased. The change also affects how debt-service offsets and amortizations appear in the budget documents shown to lenders and the public.

Key budget numbers and drivers

- Total proposed FY26 revenue: $738,700,000 (projected 4.8% increase).
- O&M expenditures budgeted at $476,000,000 (a reported 22.3% increase versus FY25 estimate); officials said $62,800,000 of that increase is the Skyway and parking contract reclassification.
- Personnel budget: approximately $150,000,000 (personnel costs projected to decrease by about $3,000,000 due to retirements and vacancies).
- Non-personnel budget: approximately $326,000,000; other contracted services line item includes the reclassified contracts.
- Federal grants and capital: the airport reported about $186,000,000 in federal grants awarded with roughly $169–170 million remaining to be spent; those grants are recorded in the capital program rather than the O&M budget.

Revenue detail and recent performance

Clint Steven attributed the revenue increase to higher enplanements, terminal rents from new facilities (D West Concourse and the new international central processing facility), and increased parking utilization. Officials noted parking revenue is the airport’s single largest nonairline revenue source and is projected to rise by roughly $7,000,000. Retail and concession revenue has also exceeded expectations, with new concessions at Hobby and the D West Pier performing strongly; staff highlighted one concession (“the Rustic” at Hobby) that generated about $1,000,000 in a single month, a record for the airport.

Landing fees were noted as an area where FY25 actuals trailed projections because of differing aircraft mix and cargo trends: some carriers moved to larger aircraft (more passengers on fewer aircraft), which reduced landed weight and therefore landing-fee revenue compared with earlier forecasts.

Accounting and presentation changes

Officials told council that the accounting change will cause O&M totals to appear higher year over year but said the underlying economics remain consistent once the reclassification is understood. Steven explained the decision as an effort to align Houston’s budget presentation with common industry practice and reduce repeated adjustments when speaking with rating agencies.

Ending

Council members asked follow-up questions about where federal grants are reflected (capital budget) and about individual line items including commercial development and contractual flows. Sechniak and Steven said they will provide additional breakdowns and follow-up documents to council staff. The airport will return for additional budget workshops as the council continues its review process.