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Austin ISD approves $19M short-term loan after CFO warns district may lack payroll cash on Nov. 30
Summary
CFO Katrina Montgomery told trustees AISD projects a $79M FY24-25 deficit and warned November tax-collection timing could leave the district unable to meet Nov. 30 payroll; the board unanimously approved a $19M tax and revenue anticipation note (4.67% interest) to bridge cash flow.
Austin ISD trustees unanimously approved a $19 million tax and revenue anticipation note after the district’s chief financial officer warned of an imminent cash shortfall that could prevent the district from making payroll on Nov. 30.
CFO Katrina Montgomery told the board that unaudited FY24–25 statements project a $79 million deficit. For FY25–26, Montgomery said the operating budget is roughly $992 million and estimated recapture at about $715 million. She explained the short-term cash stress stems from timing: changes tied to statewide homestead-exemption rules and related election timing delayed property-tax collections, producing a narrow window in late November/early December when cash is thin. Montgomery said the $19M note is the “minimal amount” needed to ensure payroll and other obligations until tax collections resume; advisers suggested borrowing more but the district sought the smallest feasible amount given interest and fees. She stated the note’s interest rate is 4.67% with a repayment target of Jan. 13, 2026.
Trustees asked whether the shortfall reflected overspending. Administration and board leaders emphasized this is a cash-flow timing issue, not an immediate sign of uncontrolled spending: Montgomery said the district was under its burn-rate forecast by about $35 million at the quarter point because of expense reductions, but the timing of revenue remains the principal risk. Superintendent Segura and trustees noted the district had previously adopted a deficit budget in earlier years and that recent legislative and election-driven shifts in property-tax timing exacerbated the cash gap.
After discussion, Secretary Gonzales moved and the board seconded a motion to issue the tax and revenue anticipation note; the motion passed unanimously. Trustees also asked the administration to consider whether the district’s fund-balance target should be revised to reduce future vulnerability to short cash windows.
Next steps: administration will finalize closing on the note and continue to post regular budget updates and the campus-by-campus financial sensitivity analyses discussed earlier in the meeting.
