Austin ISD reports $74.1 million unaudited deficit for FY2425; lays out three-year plan to restore fund balance
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Summary
CFO Katrina Montgomery told trustees the district's FY2425 unaudited result shows a $74.1 million deficit and outlined a FY2528 plan combining spending controls, hiring freezes, property monetization and enrollment strategies aimed at restoring a 20% fund balance by FY2728.
Austin ISD's chief financial officer on Thursday told trustees the district closed FY2425 with an unaudited deficit of $74.1 million and presented a multi-year strategy to rebuild fund balance to 20% by fiscal 202728.
Katrina Montgomery said the district started FY2425 with an $78.2 million deficit projection that had briefly been modeled to grow to $110 million; the unaudited result reduced that gap to $74.1 million. Montgomery and staff attributed the fiscal stress to a set of factors, including a district-reported enrollment decline of roughly 3,000 students since budget adoption and property-value changes that reduced revenue.
“While we were projected to land at $110 million, our unaudited number is $74.1 million,” Katrina Montgomery, chief financial officer, said, noting a net improvement amid additional expenses.
For FY2526 the district's adopted budget assumed a target fund-balance band; staff reported the second-six-week updates reflect enrollment and property-value changes and that the district is pursuing multiple strategies to close remaining gaps. Montgomery described action steps that include central-office restructuring already implemented, an external hiring freeze for January, earlier implementation of spending controls, tiered release of non-staffing funds to campuses, a stipend review, pursuit of additional grants, and monetization of district property (one property expected this fiscal year, one to three properties targeted in future years).
Trustees questioned the assumptions and asked for risk scenarios. Trustee Singh requested sensitivity modeling for potential enrollment declines and effects on bond ratings and other fiscal risks; Trustee De Uruger asked for clearer processes and community engagement around property monetization. Montgomery agreed to provide additional risk slides and conservative dollar estimates for pending strategies that currently appear as placeholders in the three-year plan.
The presentation also highlighted average-daily-attendance (ADA) dynamics: Montgomery said ADA fell less than enrollment, noting campus-level work to improve attendance and the fiscal importance of ADA. Trustees asked for written updates on identified strategies and their realized savings, and for a post-implementation report showing savings, staffing impacts and enrollment effects.
Public testimony earlier in the meeting raised related concerns: a recorded caller asked why the district is seeking an additional $1,015,000,000 in bond-consultant costs while treating building-condition data as still incomplete; trustees pressed staff for transparency around such proposals during the budget process.
Next steps: Montgomery and staff will provide trustees with more granular risk modeling, conservative dollar assignments for pending strategies, and periodic written updates on strategy realization and metrics.
