DATE: August 26, 2026
TO: Public Works & Utilities, Finance Committee, Governing Body
FROM: John Dickinson, Airport Director
VIA: Kelly Bynon, Administrative Manager
ITEM AND ISSUE:
Request for Approval of a Budget Adjustment Resolution (BAR) in the Total Amount of
$800,000 to increase the Airport Fund using Lodgers Tax.
BACKGROUND AND SUMMARY:
The City of Santa Fe entered into a Minimum Revenue Guarantee (MRG) contract with
American Airlines for $1,800,000 in October 2025. The contract was awarded to American
Airlines under RFP #25161 for the purpose of operating a new commercial flight between
LAX and SAF. A portion of the total financial commitment of the contract was supported by
a Rural Air Service Assistance grant from New Mexico Department of Transportation
Aviation Division that totaled $1,000,000.
Under the terms of this contract, American Airlines was required to offer a daily flight to
and from LAX for the period of October 6, 2025 – October 4, 2026. The Airport was
responsible for payments to American Airlines in the event of a revenue shortfall which
would be invoiced by American Airlines to the Airport quarterly. The amount the Airport was
responsible to pay to American was not to exceed $1,800,000. The Airport received 3
invoices from American airlines on March 11 for $709,901, June 22 for $771,027, and
August 3 for $319,072. The first two invoices totaling $1,480,928 have been paid to
American Airlines using the $1,000,000 grant funding and $480,928 of Airport Funds.
However, we have recently been made aware that under FAA Grant Assurance #25, the
Airport strictly prohibited from using airport revenues to fund an MRG. Therefore, in order to
maintain our compliance with the FAA while still upholding the contract entered with
American, we are requesting to use Lodgers Tax to pay the amount of $800,000 to American

Airlines . This has been determined an appropriate use of Lodger’s Tax Revenues as it helps
to promote overnight visitor traffic to the Cit of Santa Fe.
ACTION:
Approval of a Budget Amendment Resolution (BAR) in the Total Amount of $800,000 to
increase the Airport Fund using Lodgers Tax.
COMMITTEE REVIEW:
Public Works & Utilities: 08/31/26
Finance Committee: 09/08/26
Governing Body: 09/09/26

DATE
JUSTIFICATION: (use additional page if needed)
--Attach supporting documentation/memo
Fund Balance
Fund(s) Affected Increase/(Decrease)
213 (800,000)
TOTAL: (800,000)
Kelly Bynon
Prepared By {print name} Date Budget Officer Date
City Council
Division Director Signature {optional} Date Approval Date Finance Director { ≤ $5,000} Date
Agenda Item #:
Department Director Signature Date City Manager { ≤ $60,000} Date
Log # {Finance use only } :
Journal # {Finance use only } :
{enter as positive #} {enter as negative #}
800,000
City of Santa Fe, New Mexico
BUDGET ADJUSTMENT REQUEST (BAR)
OBJECT PROJECT
7/31/2026
Airport Fund - Transfer from Lodgers Tax
{enter as positive #}REVENUES
CITY COUNCIL APPROVAL
City Council agenda items ONLY}
800,000$ -$
{enter as negative #}
(800,000)
DEPARTMENT / DIVISION NAME
INCREASE
{Use this form for Finance Committee/
650213
Transfer of funds from Lodgers Tax to Airport Fund to pay a minimum revenue guarantee contract to American Airlines
Airport
DECREASE
800,000
ORG
5456050
2130001
EXPENDITURES
750545
510400
ITEM DESCRIPTION
Airport - Grants & Services
Lodgers Tax - Transfer to Airport Fund
{Complete section below if BAR results
in a net change to ANY Fund}
5456050
Rev. 3/26