AISD projects fund‑balance shortfall, outlines school consolidation roadmap and proposed cuts

The Austin Independent School District superintendent told the Board of Trustees on May 22 that the district is forecasting a deterioration in its fund balance and outlined a proposed FY2025‑26 budget and a consolidation roadmap intended to restore fiscal stability.

Superintendent Segarra said the district now projects ending fiscal 2024‑25 with a 16.4% fund balance, below the board’s 20% policy level. “We are projecting to end the 2024‑25 fiscal year… with a 16.4% fund balance, which is less than board policy,” Segarra said during the superintendent’s report.

The administration presented a recommended FY2025‑26 general‑fund budget that, before one‑time land‑sale assumptions and other strategies, would show an adjusted net change in fund balance of roughly a $112 million drawdown. Administration proposals to close the gap include $4 million in identified strategies, two potential land sales totaling about $45 million, $20 million in additional identified strategies, and a $24 million “force reduction” that would spread required savings across divisions. If those actions are successful, the administration projects a $19 million net draw for FY2025‑26 and a year‑end fund balance of about 15%.

Katrina Montgomery, interim chief financial officer, presented a multi‑year cash‑flow graphic showing why the district needs a larger buffer to cover early‑year expenditures before tax receipts arrive. She showed how typical cash outflows in July–September are later offset by property‑tax collections in November–January and said running toward a 15% fund balance is aimed at avoiding short‑term borrowing for payroll and accounts payable.

Montgomery and Segarra described additional measures already in place or proposed, including hiring freezes, stricter pre‑approval for purchase orders and P‑cards, review of contracts and supplementary programs, administrative restructuring at central office, reductions in non‑staffing technology spending, and targeted special‑education contract reductions. The administration said it has identified roughly $44 million of additional reductions to achieve the 15% target; restoring to the board’s 20% policy would require substantially deeper cuts (estimates shown by administration indicated an additional roughly $83 million in reductions to get back to 20%).

Segarra also described the district’s planned school consolidation timeline and process: the administration is developing a data‑driven rubric and a roadmap that would yield a list of candidate schools, followed by contextual review of programming, transportation, staffing impacts and transition plans. The district expects to seek a board decision in November so families and staff have time to adjust for changes in the following school year.

Trustees pressed for additional communications detail and evidence showing whether school consolidations yield net savings after accounting for transportation and other costs. Trustee Kaufman asked for an evidentiary framework and historical analysis of past Austin school closures to demonstrate short‑ and long‑term savings; Montgomery and Segarra said staff will prepare materials, including videos and documentation, to explain the district’s assumptions and the fiscal analysis.

The administration also said it is keeping the superintendent’s proposed recommended budget conservative: its FY2025‑26 assumptions include October enrollment snapshots (72,303 students), a 93% average‑daily‑attendance assumption and a 2% projected decline in assessed property values. The district said it is building the recommended budget assuming no additional state funding; it acknowledged the Legislature’s pending bills could alter revenue projections and will update the budget if the Legislature provides new funds.

Board members asked for more granular backup for proposed reductions and for campus‑level budget comparisons; trustees also asked for more detailed documentation showing how vacancies, special‑education staffing decisions and contract reductions will preserve legally required services.

No formal budget adoption vote occurred at the May 22 meeting; the administration scheduled a proposed‑budget presentation on June 12 and final adoption on June 26.