Board Budget Work Session: April 7, 2026

001Good evening. In compliance with chapter 551 open meetings of the Texas Government Code, I call to order a work session of the Board of Trustees of the Austin Independent School District for Tuesday, April 7th, 2026 at 6:04 p.m. A quorum of the board is physically present at Austin ISD Central Office to conduct this meeting. This meeting is being broadcast on cable channel 22 through Spectrum, Astound Broadband, and on channel 99 through AT&T U-verse. Closed captioning in English is available on these platforms for individuals who are deaf or hard of hearing. Welcome and thank you for joining us. We've provided an opportunity for limited public comment this evening. This is an opportunity for the board to take part in listening to our community. While we wish we could respond to each topic raised, the Texas Open

002Meetings Act does not authorize a board to engage in deliberation or take action on comments or complaints from members of the public if the subject is not on the meeting agenda. For comments related to posted agenda items, we will engage in any deliberations or ask follow-up questions during the of the administration during the presentation of that item on the agenda. Tonight, we have two people left who left recorded messages and none who signed up to speak in person. We will now play the recorded messages for public comment, so please listen carefully. I control did not receive the file. Can come back to You got one or just all of it? There's only two. I think it's all supposed to be one file. We'll come back to Okay. I'd like to listen to them before I

003get we get too deep into the meeting. Do we want to take a quick recess while we get that done? So, I think our public comment is important context of what we're talking about when we have it. How do we feel about that? Okay. Okay. Well, let's get started and if it goes too long, we can recess. How about that? Okay. Um so, we will start the work session and take a pause when the file is available and I will turn it over to Vera. Thank you. Yes. Uh thank you, Trustees, uh President Boswell, um and community and staff. Uh so, today we are engaging in a 2-hour work session with our Trustees uh to discuss the '26-'27 fiscal year uh budget. And um one of the things that I think is important to uh

004to acknowledge is just the challenges that we just we have in public education uh in the state of Texas when it comes to funding our schools in a way that aligns with what we think is best for students. And as an organization, I think in partnership with our Trustees, we've done a lot of great work over the last couple years trying to protect those things that are aligned with who we are as an organization and as a community. But as you'll see in the presentation that's delivered by Ms. Katrina Montgomery, our Chief Financial Officer, we're at a point now where the pressures um have not subsided and the uh budget gap that must be addressed uh is significant and decisions have to be made and these decisions will ultimately impact um student outcomes and the

005ability to serve our students in the way that we believe is best. Um so, I am asking our Trustees to engage with us in this conversation uh so that we take these difficult steps but we take them together. We are committed to a transparent thoughtful process that engages with community and certainly also want to recognize that it feels as though it's one big thing after another and so want to just acknowledge the moment and do the difficult work. I know we're the right organization with the right board to tackle this. And it's unfortunate but we are not alone. Every school district around the state is going through something similar. And we will continue to have conversations with our trustees in this form as well as on the dais >> [clears throat] >> over the course

006of the next many weeks all the way through budget adoption in late June. And so with that I'll hand it over to Ms. Kachina Montgomery to kind of start us off and then we'll pause when appropriate to listen to public comment. Thank you Superintendent Segura, President Boswell and trustees. Thank you for being here today as well as our community. Our superintendent has talked about what we're going to look at and work on today. We're going to start off with our unassigned fund balance slide and so this is a slide that we've presented and I just wanted us we just wanted to be clear of like how did we get here? And so if you look to the fall to the far right two columns you can clearly see that for FY26-27 we said that we'd

007be below zero. And then you can see it in the red and so FY26-27 is the year that we're currently working on the budget which is why we're here today. So this next slide starts off with our board guardrails and expectations and I'm going to turn it over to President Boswell in a second but what I wanted to do is just kind of read the guardrails that we received in August of 2024 and then we're going to have an exercise where we can go over either updating our guardrails as what are changing our guardrails for the new fiscal year as well as having expectations. So just so we can level set. Our five guardrails were ensure cuts in any area are equity driven. Consider the long-term impact of cuts and reductions. Ensure the teachers' voice

008has been heard in the decision. Center literacy. Align to student outcomes and listen to the people impacted before cuts are final. So those were our guardrails that we received in 2024 so we're going to take [snorts] some time to update or revise our guardrails and then have the board give us clear expectations of how we will proceed for FY26-27. President Boswell. >> Yeah, thank you Ms. Montgomery. I appreciate that. So these were established yes in August of 2024. And as we were looking at some challenging budget issues then and I think our our values stay pretty stable and our needs and our situation evolves with time too. So Trustee Singh had had the good point the last time we during our last work session that we should really take a look at these guardrails and

009have a conversation about them. I want to acknowledge I don't think we'll get to complete answers tonight even when we talk about it. We're missing four colleagues who weren't able to make this was scheduled pretty quickly for good reason and we have people who weren't able to be here tonight. But I think we can get some good work done kind of toward those conversations to help um get what you need and and please let us know if what we're doing is getting you to what your need what you're needing as well what would be valuable. So Trustee Singh do you want to take over from here? Sure. >> Thank you. Thanks. So I think if we want to um hop on to this slide. Yes. So really as we as we look at the kinds

010of you know threats to our financial stability and the work that we have to do we're going to have to make some tough decisions as Superintendent kind of alluded to. And I thought it would be really helpful for us to be very clear about the guardrails if there are any things if there's anything that the trustees really felt like we needed to make sure were like hard-nosed in terms not in terms of specific cuts necessarily but in terms of approaches to this or things that were absolutely you know must-haves in terms of how we think about it think about our budget going forward. I think that's going to give us the discipline we need for when we get to the hard cuts. So because it's really it's really it kind of dawned on me you

011know when when y'all start bringing us horrible things to cut you know the instinct is going to be no. Don't cut [snorts] that. But if we decide sort of a priori things like okay we don't want to have to borrow excessive amounts of money. We we want to make sure that we stick to our our policy on restoring the fund balance by the end of the 2026-27 school year. You know whatever those things are that are just like hard guardrails let's come to an agreement on those and I think it's going to help give the administration clear guidance on what they need to do and I think it's also going to allow the board and the administration to be much more aligned as we move forward. So you can see up on the slide some

012ideas that were submitted by trustees over the last few weeks for us to to talk about. So I guess I guess the best thing to do would be let's talk about what's on this list. Are there things that really stand out to you? Are there things that are missing? We'd just love to hear a little bit more about have a conversation about what we want to see on this list. Just before we jump into kind of the specifics here I I wondered if if we could get just a small summary of of how we got here cuz you know in 2024 we were talking about a $19 deficit. Last year we were talking about I don't know somewhere around 40 and then I'm sure many people have seen in the headlines that we're that it

013says that we have a $180 deficit. So can you just like quickly summarize you know how how we got here and um and I guess whether or not we were anticipating each shortfall every year. Yes Trustee Quintana. Thank you very much for that question. So the $19 that you're speaking of it was for FY25-26 which is our current fiscal year. The board adopted a budget at a $19 deficit and now we're projecting that it'll be $49 so that's a $30 increase. Some of the things that happened is our property values decreased more. We had additional requests from departments that increased that number as well. I don't have the slide in the front of me but what I want to take you back to is if you look at when we originally adopted the budget the

014net change was approximately $130. And so the reason why we got we were able to get it down to $19 is because we have we had strategies. We had $45 which were two land sales and then we had $47 which were other strategies and our reductions. And so if you take the 130 less whatever that like 90 something that gets you pretty close to the $19. The $181 million that you're referencing for FY25-26 and this is going to be I mean for FY26-27 this is going to be in another slide but I want us to be really really clear that this is a draft preliminary budget right? So it's not only preliminary it's a draft. And so what that 181 million is the gross number and then we're going to still this year have to

015have strategies so that we can reduce that number down to a meaningful deficit and or contribute back to our fund balance. Okay so that's so that's not the end of the story the 100 No. It's it's not the end of the story Trustee Quintana but I think um the reality of it all and I think the first slide shows this if you could go back you know if you go back just a couple slides. So we have been um very thoughtful about cutting where we do we protect the classroom. We do our best to fend off the changes that impact budget right? Property values and enrollment. And this year as we moved into this year two things I think changed to a greater degree that put more pressure on our budget which you know creates

016a bigger gap. I would say the first big one was the enrollment impact due to changes in immigration. That was significant. I mean just to be really really clear we know which students are here and which ones aren't. We know what parts of our city our students kind of where we had to kind of um uh enrollment patterns that did not change and we know where they did. And so you know we had seen changes in years past tied to federal changes in in immigration. And it and we'd seen it and it rebounded. I think what's different this time is families are leaving and no students are no new families are coming. Right? And that's a big number. So one of the things that I to acknowledge is, you know, we great great projections, we

017look at downward trends in enrollment. But, that is one thing that I think we estimated that underestimated the impact of of that change, right? So, it ended up being a bigger number, which put downward pressure. And then the other thing is for years we've had property growth increases, and then for the last 3 years it's decreased. And so, both of those things year over year have just built up, and we knew that we would get to a point around 26, 27, 27, 28 where we'd have to make bigger and bigger changes if nothing happened. Um and and that's kind of where we are. It's not the end. It's going to adjust over the course of the next couple months. But, what I don't want to do is to leave this space and not have it

018be crystal clear that we're no longer at a point where we can protect all things, that the cuts are going to impact our ability to serve our students in the way that we see best. Um and so, that that's that's what I would say. I don't know if that was helpful. It was, thank you. Thank you. And public comments are ready, so let's listen to those two before we talk about um our values. Thank you. We're ready at with the control room when you are. Thank you. Hi, I'm here to discuss the uh budget for AISD for next year, uh specifically around the closure of schools, and specifically Maplewood. I am asking and urging the board to remove Maplewood from the closure list uh due to a lot of reasons. As you all know, it's

019a thriving neighborhood school that our community depends on. Serves over 400 children, and obviously you all know this from your rubric, that costs the district 21% less per student than the district average. Uh as you all also know, closing this school on average would probably save the district maybe $500,000 to $1 million. Uh that does not equate to what it can do to harm the neighborhood and rest of the parents. Thank you for listening. Please remove Maplewood from the closure list. Have a great day. Hello, my name is Daniel Morrison. I am a parent uh in AISD, and I'm calling to encourage the board to seek budget solutions that do not involve closing high-demand cost-efficient schools such as Maplewood Elementary, which costs 21% less per student than the district average, and just it doesn't make

020sense to close it. We've listed all the reasons why, and doing so would only exacerbate the district's budget issues by driving parents out of the district and towards private education. Thank you for this opportunity to provide commentary. Thank you for our callers, and that concludes our public comments. So, uh thank you. We'll get back to the conversation about the goals um and the guardrails and what we're Yeah, what our values are about this. Thank you. So, I think what might be helpful, I would just maybe take an opportunity, if that's okay with you, President Segarra for President Segarra President Boswell making the mistake you made, um to maybe just hear from each person and think about like what really resonates from them that's either on this list or something that really we should add to

021the list, and then when we meet with our larger group, we can have a you know, a more complete list to work off of. Uh Trustee Segarra, are you asking just for for while we record for trustees to offer guardrails and expectations? I do want to I do think of them separately because guardrails kind of inform the elements within the process, and then expectations are the non-negotiables when we get to the end. Um that we >> both, yeah. Okay. Is it a And can we see the guardrails slide again? That would be helpful. Or the the vocabulary There we go. Okay, I'm just going to note these so we can go back to the other slide. And who wants to start? I I'll um I guess for number one, ensure uh cuts in any areas

022are equity-driven. Um I think that um we should probably define equity, and you know, that was a term that we used a lot um in previous processes that people didn't feel was defined in in terms that they would agree with. Um and so, I think, you know, as a board, maybe not right now, but it it would warrant a a conversation around what equity means to this school district. Um and um and to the communities we serve. And do you want to have that conversation now? Like is that a conversation you want to have now or a conversation you want to have as we work forward through that? Um I don't know. I leave that to the will of the chair. Okay. Um let's go around and see what else we want to talk about

023cuz that might be a conversation we want to wait to have with everyone in the room, too. Like I think we can put our ideas into the hopper right now, and then have all the the deliberation and conversation probably when everyone else is with us, too. Does that make sense to Um okay. And do you have thoughts about the other slide, other things on the other slide? I guess I would just ask what conservative assumptions mean. Yeah, so um Remember, this is feedback from you all you all. >> [laughter] >> Uh so, I this is feedback we received from the trustees. The way I interpret it, just to is whenever we make assumptions on the budget, uh Ms. Katrina Montgomery has to determine what enrollment projection is going to be for 26, 27, and that

024ends up being the foundation for the budget. If we're overly conservative, then we might have to cut 200 million. If I'm if I am optimistic, maybe it's 120, right? And And these numbers they may seem like small percentages, but they move the budget a lot. Another uh element might be um property um decline, right? We work with uh the chief appraiser to get numbers, and those numbers shift. I mean, that's the honest truth. In April we get projections, and then by the time we actually get them in August, sometimes they change by 2 or 3%, and it has a meaningful impact on our system. Okay. So, that's what we're talking about. If we're >> Yeah, yeah. No, I remember this conversation now. Thank you for reminding me. Um I would also just love to plug

025um under the preserve student experience, um partnering with the city and other organizations who can help provide those experiences um to you know, kind of help alleviate that um stressor. Anyone else? I think um I I think I may have been one of the people advocating for conservative assumptions. I think that's really important. Um you know, in the past, like when I first became a trustee, we would we would make assumptions about not just the next school year, but for like the two or three you know, out, and I think we really can't make any positive assumptions, you know? I think it could actually get worse. And so, it's So, yes, enrollment declines. It's um property values, and I would like us to just assume the worst, you know, it it beyond next year that,

026you know, So, that the way that that impacts our budget for 26, 27 would be, okay, well, if we take large loans um for next year, it's actually going to just make it worse. It's not like there's a windfall that's coming that's going to save us, right? And so, that So, that's kind of how I think about the conservative assumptions. Um the bullet about naming the actual reductions and staying within um within fund balance targets, I think is really important. I you know, to the extent possible, I want us to avoid saying, "Okay, we're going to make $45 million in unnamed you know, cuts." Like that is the work that we should be doing right now, is planning what those cuts are and naming them. >> Yep. Um so that there were no surprises. And

027um yeah, and I just think again, the equity piece, really defining what we mean by that. And a lot of that I think is also about like the process that we use. Are all voices at the table and I think you can't really have equity equitable decisions without that piece of it. So. Yeah. Okay. Trustee Foster, anything? Okay. I have a couple of things. If we can go back to the prior slide, please, number three. I think um center literacy, I think we have to center more than that. I think uh literacy is certainly foundational and important, but we know that we're struggling with numeracy and math as well. Um and we know that, you know, state law, the TEKS, um what we owe our students also requires that we're also continuing to even if

028we're talking about just the bare basics of of what the state expects, we are expected to, you know, support science and social studies and some degree of arts and some degree of athletics. Um and so I think we need to center the things that do, you know, have those student outcomes including our our CTE outcomes. Uh but literacy alone is going to leave us hurting in other places that are not um optional. Right? So I think we need to to center that academic experience, the core academic experience um that we owe our students. That doesn't mean that we should pare things down to that core academic experience and that on the next I'll I'll have some thoughts about that on the next slide. Um I do think equity driven is fuzzy. Can we go back

029to three? Sorry, I'm not there yet. Thank you. Um I I do think that's an important conversation we should all have together. I think considering the long-term impact, you know, what what cuts could we make that would be really hard to undo if the landscape does change, if we do have enrollment start to increase, if we do get um more more sustainable fair funding for our schools from the legislature. Um if we get rid of all of our librarians, that will be very hard to get back. Um so, you know, what are the long-term impacts if we cut major programs, just eliminate things that it would be hard to reestablish. Um so, that's what I I mean when I see that bullet. Um you know, ensure that our teachers' voice has been heard. I really

030want the people closest to that work with our students to actually inform our decisions as well. What does it mean to you? What do these cuts mean? Not that that means anyone we're the ones who ultimately have to make the decision. Um but I want to hear from the people working with our students what this means to them and have them say if it's this or this, you know, kind of where do we fall? Um Where do we land on that? Um And I think listen to the people impacted before cuts are final, yes. Um but I'm not I there's a lot of room in that about how we do that, right? And I think early and often matters. Um so, yeah, I think there's some some refinement maybe that could happen. And then on

031the next slide um I do really agree with Trustee Singh about I am not comfortable adopting a budget again. There was a big bucket of you know, pending strategies that weren't very well defined. And to me we need to adopt a budget that names what we're going to do. Um you know, for ourselves and for our community. We need to name those things in our budget. Um our budget deserves that degree of detail. Um I don't want to get us into a situation where we're forced where we're likely to have to borrow a signifi- significant amount of money. I would like to you know, plan to borrow no money knowing that we can't predict everything. Um especially while we're working back toward that 20% fund balance, but I I would like to really minimize our

032risk for that because that's you know, spending money on interest on a loan is not keeping it in the best place. Um you know, I do feel like doing what we can to resist the state's push toward doing the bare minimum. Um you know, public schools need to be places where people can discover things, can try new things, can have those experiences on teams, UIL, you know, whether it's athletics or theater or choir or mariachi, you know, all the things that all the programs that we've built that are really meaningful to our students um and our current technical education and our dual language. We've worked really hard to create some really world-class programs that are a very valid part of our student experience that sometimes become a career for our students. Um that definitely are

033that um that connector for our students. That is a source of mental health and joy and community and and there are a lot of people who would love to see us, you know, the the pressure is to narrow that to only the things we have to do and I want to be really conscious of how we do that. Um and in addition, yes, looking to our community for ways to help with that. Um Yeah. So, I think we're on track, you know, on the right track with a lot of these and I do think the the leaning into being careful and conservative, not being overly optimistic um cuz we've seen that bite us a little bit before and I think we need to be very realistic and and I remain um very interested in getting

034continued updates about our enrollment projections cuz I have some concerns very specifically about enrollment projections that rely on the past four years of data when we have seen the loss of so many students this year, when we don't know how closures and uncertainty about boundary changes and further closures will impact our enrollment. We don't know how vouchers might impact our enrollment. Um I I have some I want to keep watching that number and having discussions about that number and how you've arrived there and and how it's being refined. Um cuz that specifically concerns me. And I I don't want to get into a position where we've hired so many people we have to do a riff during the school year. And I want to be really honest about what it would mean to overproject, um

035overstaff our teachers and get to a place where that was a conversation we have to very seriously have and I would I want to be sure we don't do that. Um thank you. Uh anything else before we move on? Okay. So, thank you. I think this is a good conversation and foundation for coming back and having this with the full board. Is this helpful? I know it's fuzzy. We haven't landed on anything specific, but I don't feel like the five of us can fairly land on anything specific for something this important. No, but y'all are a big representation of the full board. Five out of I mean, I I want to like it's helpful to hear more. Um I know I know we're not going to come to consensus and that's not the expectation, but

036I think expectations is something that I really want to spend some time on. Okay. Um and the reason being is that when we make hard decisions and we make recommendations that come to the board, like we will do the work and we're going to do it in a way that is only Austin the the only way we know how to do it, right? Um but it's going to be hard. And what I want to avoid is a scenario in which even after going through all the steps and engaging and bringing voice in and being very thoughtful, it's still painful and it keeps us from getting to a vote that ultimately moves us to where we need to be. And the reason I say this is because I want to get to a place. My expectation

037is to have a budget that we can fully fund out of stable funding sources. And the reality of it all is Title 1 fluctuates every year. Um our students that are identified as economically disadvantaged is is is is moving in the wrong direction. Um you know, partnerships with the city the city city has their own budget challenges. Uh so, those things are real and those things we can explore, but they're not going to um get us to where we need to be. And and and so I think when it comes to expectations, I want to bring forward expectations that I know that we can fully execute and the more that I rely on funding sources that are not owned by us, the I'm limited in the amount of con- confirm that. I guess maybe ensure

038that that is done all the way through. If that makes any sense. Maybe I'm using too many words to say something very simply, but that is something that we've struggled with because a lot of times we'll hear, you know, go partner, go partner, go partner. And yes, we do that. But those are million $2 million moves. Like when it comes to who we are, when 87% of our our budget is staff, the only way to get there is to have those types of difficult conversations. And so, I just want to be really clear that that's what we're talking about. Um >> I think I think probably one of the clear one of the most critical pieces you need to hear from us is what we how flexible are we with the fund balance? You presented

039to us something in December that showed your plan to get out of um to get back up to a 20% fund balance. So, I think it would be really important for the board to come to a consensus on how low we feel comfortable going. So, originally our policy was 20%. We reduced it to 15%. Um and in December you said you gave us the plan for bringing it back up to 20% and at that time it said um for the year 2026-2027 we would be at 17.1 percent fund balance. And so, I'll just say it from my opinion, speaking for myself, yeah, that we need to stick with that. So, that's what you're hearing from me is the 17.1% fund balance um is what I would expect to see in the budget you bring to

040us to approve in June. Uh I would also expect to see more conservative enrollment projections. I don't think. I think we're I've heard too much from people and looking at the actual numbers, I think we're being very optimistic. I think we need to lower those projections. Is that the kind of stuff you need? I I need to we got to be direct. I mean, I So, like another example is we have real estate, right? I mean, that that is something we've used in the past and and there are times when we progress real estate through the system and we get feedback, there is not consensus, and then we slow down and it doesn't execute. And and I it's all connected and and I I want to be really clear like if we're going to create

041a budget that ultimately relies on you know, a couple cash injections by way of real estate, we got to be committed to transacting, right? And mon monetizing monetizing or doing something that generates funds that help us. But those are also board decisions, right? And they're to me they're totally connected because they're and if we agree to a budget and that includes these things, those things have to continue. And right now, one of the things that we are struggling with the 2025-2026 fiscal year is that there was a real estate transaction that we thought was going to close. It did not close for a variety of reasons, but you can see how that one shift creates, you know, pressure. Um not to say that that wouldn't have or couldn't have happened in a different way, but

042I just want to be really clear it's all connected. So, when it comes back around and around, um we're all on the same page and and and get there, right? I mean, that's I think what we're trying to do. So, clear clear direct feedback is very helpful. >> [laughter] >> Yeah, I I appreciate um you know, us agreeing to a process and and then no surprises by the board when you when you try to execute that process. Um but I think that as a trustee um it's it's hard to kind of give this preliminary um goodwill or grace when I just I don't know what the process is going to look like. Um and that is really important to me, to the community that I serve. Um and so, it's it's hard to say like,

043yeah, absolutely monetize everything you can monetize and sell it and sell it and get us out of here, but that I mean, that feels like a lot to a lot of grace to give at this moment. Yeah, I'm not asking for this moment. I I I'm just stating that um whatever we agree to do, like I want to be able to do it. Um and so, I think as we move to the budgeting process and real estate, all of those things they're they're all going to be connected. You know, and I I just I want to be able to do the work. It's it's hard enough um and I think the board expects me to be able to deliver on things that we commit to. And um as hard as this is going to be,

044you know, I have to be able to do it. Um But yeah, no, I appreciate that comment, Trustee Cantu, and I I agree with you. And and Trustee Coffman. Um well, I would like to just note that I'll be wary of property sales and other one-time influxes of cash that don't address the structural deficit that over time will continue to create need and we can't continue to sell all of our assets without making the structural changes. So, um I will I've understood to this point where some of those transactions need to occur to get us on the right track again, but I will be asking a lot of questions around additional property sales, especially as um Trustee Cantu said in the neighborhoods where they most identify with that current property as a part of the

045important part of the community. And so, just wanted to make sure that um we are very diligent about those potential sales. Also, I would like to say um we can come to lots of agreements in this room, but a lot of the public feedback won't come until the cuts are known or the changes and the impact hits. And so, you know, not everybody watches the board meetings, not everybody reads all the news and everything, but they do find out that their school property is for sale and it it it can't be too late for the public to give input at that point. So, we just have to weigh the need to commit to things that can lead to actions that need to be taken, but without um reneging on our commitment to engage the public

046when making those decisions. Yeah, and I think Trustee Coffman, that's that is an incredibly important point uh that you brought up. In no in no role should real estate capital injections be the long-term solution, right? They're the system as a whole has to be funded with the available sources of revenue that we have. And right now, our budget AISD's budget is $850 million. We're spending a billion plus. Until we get to $850 million, we're not going to be truly a stable system. And and I think to your point, I do not want to be leading an organization that can't get to a place where we're able to afford what we are offering. As painful as it's going to be, that's that's what we have to get to. And real estate should only be leveraged in

047a way to soften in transition between fiscal years so that that cut that may be the one that goes too deep, um you know, maybe is delayed a year so that you can go through a process um and get to that final solution that is maybe a better solution for our full community. That's how I I view it and I So, yeah, that I'm right there with you. It's not the solution by any means, not the long-term solution. Some of the things I could um add to the conversation and and some of them by are are by way of um sort of co-signing, so to speak, so as to um sort of double down on the notion that these are important. Um one is I don't know, this isn't a guard rail, I don't know

048how you it's just part of the conversation. I am forevermore at this point in history interested in conservative projections guiding our decision-making. And the two areas that I can think of right now are enrollment and property values. And we've said that and it's been echoed, but I think that's of uh hugely important. Um I really liked uh thinking in terms of what cuts are flex and what cuts end up being almost akin to permanent reductions. It's just so hard to unring a certain bell. Um and I think that is something we haven't particularly talked to as part of this process, but um if we we might have something that is dear to our hearts, um but the reduction is something where it could be reinstituted. And there's something else that is important to us, not

049quite as dear to our hearts, but it's still super important, but the problem is when we cut it, it's gone. That might actually have you flip which thing gets cut. Does that follow? So, we're going to I I I desperately want to see this thing say stay, but the reality is if we take it away, we can put it back. This other thing's important. Uh and I would I would I would chop this first, except for the fact that once it's gone, it's gone. And so, that that that's a complicating factor and it's almost like you have to go case by case to determine which way you're going to go, but I wouldn't go hard on here's our clear priorities no matter what when the reality is the third one down, once it's gone, it's

050gone. So, the you follow? Um so, I'm I'm saying flex. I don't know if that's the right language for it, but what can what's what's a cut that can flex and what's a cut that is gone for good? And and we as a board should have an awareness of the implications of each cut, right? Um I appreciated your uh speaking to the reliance on stable sources for funding. I deeply doubt that we can fund the district only on stable sources. Some of our funding is going to be funding that is contingent on who's running the city and what the Department of Education is doing this year or that year. There is a percentage of dollars that's coming from the feds that we kind of have to rely upon if we're going to keep running. Um

051so the principle of reliance upon stable funds I am all for. With the understanding and unless I'm mistaken that that I I think what I'm what I think you're approaching the right way. If I can follow your your lead on it a little bit. >> Um I recognize that there are things that we offer and we can only offer them because we have available title one funds. What I'm wanting to communicate is that those dollars are going down and down and down every year very very quickly. And so if I don't acknowledge that and I don't account for it then I'm doing I think all of us a disservice. And so to the extent possible if we're funding a position that is mission critical using title one funds then the approach may be to transition

052them to 199 and then offset that position with a position that perhaps isn't as impactful to you know the you know educational environment or the the classroom itself, right? So that that is what I'm saying because in some cases I've had lots of conversations this year where I've gotten everybody in the room that was funded with title one, three, different funding sources and I was telling them a part of your position is paid for using these sources of funding and they're changing every year. Um and so that's what I what I mean. But I think generally speaking um if the core mission of the system should should be funded with 199. Heard. Okay, so critical there are there are cases where critical funding is coming from title one and we might or for instance title

053one and we might have the opportunity to do a swap. Potentially. >> To to put something on a harder line so that it is safer. Correct. But then you would have to take the funds that are title one and use them for something else and know that in 27 28 or 28 29 if it goes to zero that is going to go away. Yeah. Heard and heard. Um and these are important nuances and I think they're going to be incredibly difficult for the our publics to follow all of these nuances but I'm I'm hearing you loud and clear on that kind of maneuver. Um an another piece related to this is uh clear theories of action and adherence to those, you know, theories of action so that if what comes to us is we have

054this many you know, potentially surplus properties and according to you know your uh masters of finance or whatever, you know, the the our smart folks in the numbers game they would say health looks like you don't surrender but this much of your real estate that you can never get back and you should monetize this much of it or you know, whatever it comes out to be that if it's for instance real estate here is the theory of action about how to think about real estate and make that clear and apparent to us. I think on the board side of the ledger once there's been clarity as to the theory of action in an in an arena and it's been presented to us and it's been presented to the public and we've worked through it we

055agree to the budget well at that point then it's on us to follow through and to not say well don't do this thing that we all agreed is part of the budget to do. Um but what's most helpful I think to me and to probably the board and certainly the public is clarity in terms a clarity and transparency and like just walking us through it, giving us a 101 on how we're thinking about these various areas and the reality is it's not one theory of action. It's an entire ecosystem and you know, what's going on in our classrooms, how we're staffing, what's going on in transportation, what's going on with real estate, all of these things, what's going on in food services all of these things have theories of action sort of guiding them and

056the the greater the extent to which we can be educated and our public can be educated as to these theories of action it just raises our integrity, it raises our transparency and it can strengthen us in our ability to stay the course because it's what we understood when we agreed upon and it's what we agreed upon. I don't know if that's what you're asking for but I hope that's helpful. It is it is helpful. So trustee Foster one thing that you mentioned that I think is a a powerful way to look at this work and I I want to be really clear cuz in here in a couple moments we're going to go through kind of big bucket items. And I want to be really clear that each bucket has you know, in in some

057cases um you know, dozens and dozens of different uh ways to consider um a reduction. Right? And there's one thing that we use in our organization and it's called a supporting resource index, right? And it's it's what we use to um operationalize uh um in the work to lean into the uh equitable values that we have. And so what it does is that identifies these um students who have historically been underserved, communities have historically been underserved and we built up a data set. This has been now two and a half years or three years that we've used this and it's really helped us guide the work. So if there are hirings, if there are ways that we're approaching the work, we will prioritize the the work in these schools because these schools support our students

058who have been historically underserved, right? And and our system knows that we operate that way and that's the way that you can operationalize it. But the reason I say this is let's say there's a reduction of perhaps it's a ratio of one position and let's say that um you can eliminate the position across the entire system and then it's hard to get back. But if you were, you know, using this tool that we developed um again in partnership with previous departments as well as everybody uh which you could say is okay, well for band one and band two schools we're going to preserve the existing structure, band three schools and band four schools, which are schools that have historically not had the same percentage of students who are economically disadvantaged um you know, you might

059uh scale it back, right? Or whatever that allocation is might look might look differently. Maybe it's a hub model um but you would get an overall net reduction but it wouldn't look the same way camp from campus A to campus B. Now in the event that enrollment increased and then all of a sudden funds became available, it's very easy for us to expand something already in the system versus introducing something new that isn't. Right? So that's one way that I interpret what you're saying when it you mention something that goes away and it's gone forever versus something that gets scaled back and then gets reintroduced or maybe expanded, you know, in a future year. So just I want you to know the way that I hear that because of the way that um we talked

060about it earlier and one way that we could see that coming to fruition as part of these um >> Well well for me that that lives into two principles simultaneously and importantly. One, the equity driven the equity drive that you're going with an equity principle guiding your decision making and second, you are constructing the cut in such a way that we can recover. So for me that elegance is a weird word to use in this context but that approach is elegance in a solution and [snorts] that there's clarity following principles um and executing. So that's the type of thing that comes to us by way of cuts, I think I'm appreciative of that. I I think it also just reinforces how nuanced each one of these items has to be, right? To be that intentional.

061You can't just group these these things in in this way. It just it doesn't work that way. Not if you're going to approach it the way that we'd like to approach >> Well and I know we need to move on but let me be candid about one thing that that creeps into this conversation. Um we lean into transparency um trustee De Oroste tells us and talks about our capacity to communicate and part of the reality is as we lean into transparency and as we share it creates opportunities for folks to really like dig in and why this and why that and it can actually ironically create additional pressures on the board and the administration as people are digging in deep and it becomes really hard to explain that this is actually a really good solution.

062But what we're talking is like advanced calculus here and it's really hard to communicate why this is the right thing to do. As trustees, you know, what we can rest in or what I can rest in is I've thought it through, I've listened, I understand, I'm going this way even though some people are going to be mad at me. That's hard to take to scale. And to have everybody, you know, kind of rolling that way and able to roll that way. So, I'm hearing a challenge that I don't know how we address, which is that when we introduce this level of nuance, we're also going to introduce a level of and we're transparent about it. We're going to introduce a level of scrutiny, and it's going to be really hard to stick to our plan,

063even if it's a good plan. And I don't know what y'alls thoughts are on this, but it's it's something I see. Thank you. I appreciate that. Um, I have a couple of things to add before we move on. Um, I want to reiterate my concerns about enrollment and in line with Trustee Singh's comment, and we have an excellent city demographer. I hope we will consider using city data as well. I know we contract with a demographer. It's someone who doesn't live in our city, and it's someone who doesn't know our city with the nuance that our city people do. I think it's a both and. I would hope that that that might be a resource that we can lean into, just local knowledge, as well. Um, you know, and I have concerns that fewer families

064are coming into the country. We closed 11 schools, including our international high school, till 10 buildings, 11 schools, because people are not coming into the country, and people come into the country at all different ages. Um, and that's not happening right now. So, I just want to I do not want to be overly optimistic about that. Um, and and think that's a the more information we can get from the more sources, I think the better we will be. Um, including our principals and our parent sports specialists, you know, their campuses really well, too. So, and and you know, our teachers know a lot. I'm hearing a lot of anecdotal information. There's not a way to make that um hard data, but I think there is a way to listen to that and learn from that.

065Um, you know, including a principal who told me that she knows families at her campus who plan to go back to their parents' home countries at the end of the school year, that there will be more, um, according to what we're hearing. And you know, with children who are citizens, our students who will go move be moving to countries they've never been to. Um, and so I think just having a the most solid idea we can have of that will put us in a better spot. Um, I do see real estate as a tool, but one that we should use very strategically and sparingly. It's not a long-time solution, and it's one of the things that once it's gone, we don't get it back. Um, and there are a lot of good uses for that

066real estate. I'm very proud of the public facility work we're doing. Um, I'm heartbroken that we haven't been able to use it in places we had hoped to um, because of the budget issues. So, I I do think we just we need to be thoughtful. Um, really thoughtful about it, and I think um both with the real estate and the proposed cuts, um, we're a public institution, and public input is an essential part of our process, and and I think we have been very supportive as a board and and worked together um, with the administration to come up with really hard choices about big things that have really protected our values while we are making these hard hard choices. Um, and I I have all faith that we can continue to do that together through

067this very hard process. Um, and I think the sooner community voice is included, the fewer opportunities we have for surprises or places where we diverge. Um, that's just I think more of that sooner is better, and I really appreciate I know we're going to get to a point in this meeting where we start talking with a little more specificity about different options for getting to that 17% fund balance, yes, 17.1, to those things. And I think the sooner we can start discussing that with each other in our community, the better we're going to be able to come to something together that you can recommend and we can support. So, thank you for that. I'm very glad we're talking we're starting to talk about that. Um, I also want to be sure we're talking about technology

068expenses, um, and whether we really are committed to one-to-one and the software that goes with that, and the chargers that have to be replaced, and whether we really find educational value in all of the software that we're using. Um, companies promise a lot that I don't think um you know, I don't have the data for our district, but generally the data don't always back up the value that is promised. Um, you know, there are a lot of new studies coming out that that are saying that children learn better when they've got physical things in front of them. I still have struggled with the idea of math on a screen. Um, and you know, how that would work, and I know we do manipulatives and lots of other things, but I I want to be really

069sure we're being thoughtful. I would rather cut products over people when we can. We have a whole lot of products that we're paying for, that, you know, COVID really exploded that. And I want to be sure if we're using them, we're using them at the right grades for the right reasons. Um, and I know technology has really been sold to us in a budget crisis as a way to let teachers do small group and park kids on computers and to do things, and I I really want to be thoughtful um, about what we need and what maybe we could cut so we can protect some other things. Um, and the same with outside contracts. Uh, I know we've been working to reduce those outside contracts, and I want to continue doing that, um, for special

070education evaluations, for a lot of things. I know we we spend a lot in bringing people in-house when we can. Uh, continue doing that work. And I know last year it was very helpful to me, and I think to our our ad hoc community budget committee as well, when you brought that list of kind of expenses and and, you know, big buckets that what was being spent and had that list of places we might consider cuts. And and that was to me extremely helpful. So, I would love to see that again as well. And I will reiterate my my expectation that I won't be asked to approve a budget that's got a big amorphous um pending strategies without definition. Like I think they need to be line item. Thank you. Thank you very much. So,

071this next slide kind of um is a slide that we um Trustee Quintana had asked about, and so we wanted to be really really clear about the difference of the documents or the information or data or deficits that you have seen. Um, so in February we presented a fiscal forecast, and so that was just a projection of what our we thought our future revenues and expenses would be for FY26-27. And then today we're looking at a draft preliminary budget, and so we want to be clear about what that is. That is not the actual preliminary budget. We present that on April 23rd. We're presenting this today so that we can start engaging our community, engaging our board about the reductions that need to be made. So, this is a draft preliminary budget, which means will

072change, right? The the budget team and I were working every day to look at revenues and expenses, and we're meeting with T L L, and we're meeting with Ops, all of these departments. So, the draft preliminary budget numbers will change, but we want to be clear that that's what what you're seeing today, a draft. And then on April 23rd, you'll see the preliminary budget. Um, recommended budget is on May 21st, and then the adopted budget is on June 18th. So, this is our fifth financial impact scenarios, and so you're going to see we're going to have our revenue um off our revenue recapture operating expenditures and net change, and then you're going to see our FY26-27 preliminary numbers, and then you're going to see various scenarios. So, one of the things we wanted to do

073as a leadership team is when we talk about how are we going to the net change is the $181 million. And so, when you see this number, I also want to be really clear. When we did the fiscal forecast, we said that the fiscal forecast would say that we'd have a deficit if we kept it the way it was, it was a projection of $166 million. So, the difference between the fiscal forecast and the preliminary budget is that you have the $181 million, and we had vacancy savings of $16 million. And so, one of the things I want us to start doing is always having the same starting point. So, from now on, everything you're going to see, we're going to start off at the net change of the $181 million, and any reductions that

074we make, any additional revenue that we have, it's all going to be below the line, so that we're not constantly netting and moving things around. So, 181 is going to be our stable place, right? So, if the budget team and I and we work with Ops and we find reductions, you're going to see it below that line. Um, so that's the preliminary, and then scenario A, which we'll go through in detail today. And so, what this is saying, we have the net change of $181 million, which means our expenditures are more than our revenue. Um, we have vacancy savings of about $9 million, and that's for campuses only, because what you're going to see in one of the in scenario A is that we've suggested collapsing all department positions. And then you're going to have

075property monetizations. This is three properties for a total of $50 million. And then this is the bucket we're talking about the strategies of $131 million. Um, and we fully agree that we will come back with itemized list of what these reductions what these strategies are. But if you look at this, if you take the 181 and you take off the nine and the 50 million and the 131 million dollars, what you clearly see is that we're going to be contributing to our fund balance for a total of 9 million dollars. And so what happens is that would get our unassigned fund balance to 16.8%. So that's getting us closer to where we want. So what we've been talking about over the years is that we wanted to have a balanced budget. What we're saying now

076is we want to contribute back to our fund balance. Scenario B, again, you start in the middle at the net change of 181 million. We're projecting vacancy savings just for campuses will be 10 million dollars. And all this number is is remember that we know that we're never fully staffed. And so this is a 2% number based on campus positions. Property monetization of 50 million, but what you see here is strategies of 117 million dollars. So what that means is that the difference between scenario A and B, we wouldn't have to have as many reductions. But what that will give us is a negative net change or a deficit of a negative 4 million dollars. And that will get us just to 15%. Scenario C, we're going to start off at the net change again

077of 181 million dollars. Vacancy savings campus only for 10 million dollars. Property monetization stays consistent 50 million. And then we have strategies there of 131 million dollars. And so now you see this adjusted net change is 10 million dollars. What that does it still keeps us with a fund unassigned fund balance of about 16.8 million. I mean, sorry, 16.8%. And then finally you have scenario D. We start off net change of 181 million. You still have the same vacancy savings, the same property monetizations. But we do 1 million dollars more in strategies. That gets us to 11 million dollar adjusted net change, which will get us to the unassigned fund balance of 17%. Yes, ma'am. >> And I have one question about this, which in the preliminary I see vacancy savings of 16 million and

078then don't see that reflected. Is some of that put into the strategies? Where did that go in the scenario A, B, C, D? Yes, very good question. So the vacancy savings, the 16 million is a total of vacancy savings at departments as well as campuses. So what we're saying is in scenario A, B, C, and D, the departments reductions, the vacancy savings will now be collapsed positions. So it will be a part of the strategies. Right? We're not we're not suggesting to collapse campus positions. So that's why we're going to continuously track the vacancy savings. But we are suggesting to collapse the department the department vacant positions, which will be a line item of 23 million dollars in the strategies. Okay. Mhm. Um one of these things we want to be clear, none of these

079scenarios eliminate the need for borrowing. Short-term financing may still be required to meet our operational obligations and potential negative impacts on credit ratings. So we just want to be clear about that even though we this is definitely moving us in the right direction, there's still going to be time it's still going to be time for our cash flows our cash flows are going to still need time to catch up. Yeah, and I think to put it even a finer point on it, conceivably you could get a 20% and still have to borrow. Um it is truly a cash flow issue that that we have to navigate between October, November, and December. And so just for everybody who's following along perhaps community and and families and stuff, it's really the way that we receive tax collections,

080the timing that we get it versus the capital outlay over the course of the first half of the fiscal year. And that just puts pressure kind of on us from a cash position perspective. And it's always worse when there are elections. So there's an election coming up. And so even if we got to 20%, I'm just not necessarily convinced that we won't we wouldn't have to borrow anyway because of how delayed and sometimes how much longer it could take to receive those funds. Um so I just want to make that point. >> the the role of elections. So um so generally speaking a lot of individuals will delay paying their taxes until they understand what's going to happen in the elections, especially when it comes to statewide elections that are tied to legislation. >> from

081our our folk. Correct. >> taxes. It is predictably delayed. Because individuals are taking longer as a whole as a community to pay. Not not that the tax appraisers collecting them any taking longer. It's just people are paying taking longer to pay. Got it. Um I I do it still does raise a question for me that the reason why we you know, we maintain a fund balance for rainy days and we try to structure ourselves such that we absorb the hits of cash flow challenges. Um and I'm I'm understanding that sometimes it dips really low. What is either the policy adjustment or the fiscal practice adjustment so that you don't get there? And I'm not saying that we're there yet, but like is it that it should be 22%? Is it that there should be a

082policy that you can dip into the cash balance once a year? So so there are two different things, right? I think and Katrina can speak to this or sorry, Ms. Katrina Montgomery can speak to this better than than I can. But you want to have enough cash on hand, right? To pay for expenses in the event um that something unforeseen occurs. Right? That is independent than cash flow constraints in the system. Right? Like so if all cash ended, you know, could you make payroll for the next two months? Right? That's kind of how you think about reserves. Reserves are also used as a backup to float as revenue comes in. And so that it's used two different ways. I think our policy, the way that it's set, is based on the number of days that

083you have to support operations no matter when that occurs in the fiscal year. The secondary component of this do you have enough in the account to offset the puts and takes that occur in as you collect money and as you make expenditures. So I just want to be really clear. I don't believe the 20% fund balance was set based on the cash flow tension that's in our system. It was based on the number of operating days that you have available to you at any point in the fiscal year. So two slightly different things. Katrina, do you want to add anything to that? I mean that's it's just they're just one doesn't necessarily mean the other, but they don't both generally do this or helpful in that way. Mhm. Anything you want to add? No, I

084agree. I think to answer your maybe answer a little bit more is we just need to make sure that we're building up our fund balance. And so what we've done is we've you know, we've reduced it over years. And so the way that we want to be more stable is I would say in my personal life just having two months worth of reserves might not be enough. That might be what we hear, but if if if something drastic changes, what will really two months worth of reserves do? So we want to Yes, we want to get to 20%. But then we should also want to continuously build up that fund balance. Right? Like let's not make 20% 20% now is the current goal, but it shouldn't be the ceiling. Right. And not to further dilute

085maybe the conversation with complexity, but remember it's a percent of. So if your total operating expenditures go down, right? And you keep a percent as your fund balance, then conceivably your fund balance value goes down as well. Well, the puts and takes in cash don't necessarily move in that same way proportionally. So you could have a 20% fund balance, but the total value be less than a 16% fund balance when your total operating expenditures, you know, four years ago were something much greater. And so all of that kind of plays into it, Trustee Foster. Because we're talking about percents. Uh the the way cash works, especially when it comes to October, November, and December, it's just not always that tightly aligned. But I'm happy to in a future meeting kind of break it down cuz

086that number as a percent of that does fluctuate also. So as you can imagine, as our operating expenditures go down, assuming that number is stable, then the percent would go up. Yeah. Um part of what I'm hearing is our reality that 20% as a policy point is pointing to a minimum. It's not pointing to where we want to be. It's pointing to a minimum. Yeah, I think that's a I think that's one way to look at that. That is a that is a bottom threshold. And we lowered it because of the fiscal cuz of where we were and we want to get back up to that as a minimum and then grow. But even when we're there at 20%, we still have an October, November, December reality. And I mean, I guess, you know, the

087horse is like just being beaten, but any day you're talking about like going to the the payday loan shop to get a payday loan, like that is not a sign of health. And you know, miraculously because of y'all's work, we you know, maintained our fiscal ratings and all this other stuff. But we're talking about like what I'm hearing between the lines or maybe not even between the lines is get ready for another payday loan. Um that's not a good thing. That we are basically building into our model an expectation that we're going to drop a quarter mill in interest fees sometime next year to make ends meet. I mean, is that that that is what we're saying, isn't it? Yes. Okay. You want Yes. And this hard work will get us away from that. This

088is one giant step, and we talked about this today. This is one giant step in making writing the system for years to come. And that's why this work is so hard because this is what needs to happen. Um so, this is what we just talked about, so I won't really kind of belabor the belabor the point. Um last fiscal year, we um did a loan for $19 million just to kind of refresh our memory. We did everything to borrow the most the minimal amount so that we cuz I was always looking at what is the what is the approximate interest and fees that we were going to pay. So, that's your $250,000 that you just spoke of. I think trust uh Katrina just I know we're running I don't I want to want to go

089late, but I want to just be real clear. The term of the loan was what? Uh I mean, it was weeks. It's a Well, it was You got to remember. No, I I don't remember off the top of my head, but we negotiated the time down because we didn't want to have the loan loan for a long period of time. So, what you will what I will elaborate on is you see other schools that are doing it for months, and we did not do that. We were very intentional on making sure that we just I mean, we were we were moving it because we wanted to borrow the money for the least amount of time. So, I want to say Matthias off the top of my head, I believe we got it in November, and

090we paid it back in January. I think that's what's ringing in my head. >> That's right. And I I it's something like that. It's very close, but and I know we're going to move on, but I want to be really clear that most banks don't want to do a loan that short, right? Cuz they get they get the fees on the carrying the debt of a longer period of time. So, it's it's even hard for us to get a loan that short. Um so, continue on. I'm sorry. >> and that minimal cuz they really wanted us to do more. So, yes. And this is the side that um we we won't spend time here because um Trustee Singh talked to us through that. And so, um here this next slide, this is our fund balance

091restoration, and we just want to be clear about some of the positive work that we've done, right? We know in FY24-25, our community approved the VA DER, which was for an additional um net $41 million, and we definitely appreciate it. Um we passed that very successfully, and it was just because our um our community believed in the hard work we were doing. Hiring freezes, we've been doing those for the last few years. Definitely been doing a lot of spending controls, um monitoring our interest so that we can make sure we maximize that. Um in FY24 we 24-25, we still had some extra supply planting. Um we're we're looking at enrollment strategies, property monetization. So, we just wanted to spend some time and make sure that it's very clear that we're doing all the things, right?

092We're also looking at the average daily um I think it's ads it's ads the average daily school year maybe. Um we're also looking at resource campuses. So, we're doing all the things. We're not just saying, let's cut. We're trying to say, let's reduce, but let's also try and try to find out how there are other opportunities that we can bring revenue into the district. And thank you for sharing this, and thank you for mentioning um TEA is spending a lot of time talking to districts about all these other state funding opportunities um that are available, and I appreciate you mentioning additional day school year that we're applying for at some of our school schools that that will be applying and bringing more revenue in um and offering some additional instructional time where it's especially valuable,

093and and schools serve as a place for kids to be when families need to work. So, I think there's a lot of power in a lot of that. Um and these are in areas also where charter schools have extended school years and things. So, I think that um that we're pursuing that. Um we are now doing teacher incentive allotment TIA. That's another one that the state is saying, if you need more money, schools, there are all these things you can do. Um and I think we've looked for ones that really align with our values. The resource campus where we need it at the um turnaround schools is another opportunity that we think, you know, will bring more resources and really meet our values. So, thank you for doing that. And then I know there's some

094we haven't approved or haven't explored cuz we feel like it's not a good fit for our community like Bluebonnet. Um and that we have another HQIM high-quality instructional material in place of Bluebonnet, and that's um so, I really appreciate you calling that out. And I would love when we share this again to make sure that the additional day school year and the teacher incentive allotment and the resource campuses are all on it because we are tapping into a lot of um as the state funding system changes, they are doing a lot that you have to seek out and apply for rather than just putting it in the budget for all schools. And we're leaning into that in some ways that are helping our community and helping our schools. So, thank you. Yes. And I'll just

095add that VA DER should be on each category cuz that's that's every year. Right. Mhm. Yes. It's a great list. Thank you. And to remind people who are watching, if anyone's not doing something else on a Tuesday night, um the VA DER, thank you to our community for supporting that, gives us about $42 million a year in extra revenue every year from now, you know, until perpetuity really in theory. Um and it has allowed us to maximize the amount of state funding that we are allowed to have under regular state funding formulas. Mhm. So, thank you. Thank you. So, this next slide is um budget reality spending ex- exceeds available resources. Um and so, I won't read this slide, but what we're basically trying to um show with this funding worksheet is the um Oh,

096sorry. Hey, can you click on that funding worksheet? Thank you. So, what we're trying to show with this slide here is um illustrate the gap between our current spending plan and the funds available to the district. Thank you. Um Superintendent Segarra. Um and so, Josh has done Josh and Adriana and the team have done a a fabulous job at creating this document, um and I'm going to turn it over to our superintendent to kind of walk us through um your thoughts and how how we got here. >> Yeah, uh thank you, Katrina. I I really just wanted to share this with trustees because I I want to communicate what $180 million looks like. Um you know, and and and when we think about how we are going to do the work, it's important that we

097have tools that help us understand how each of these consideration is going to impact each line item. And so, uh what this is attempting to do is to show what our 26-27 budget allocations look like if nothing changes. And then what it does is it nets out a um campus uh our central off- non-campus related costs, does a reduction, and then distributes everything else proportional to that budget item in our overall budget. And so, it's really just meant to give everybody an an idea of the magnitude of the budget items. And then what you're going to see, trustees, as we go through the process um with community, with our principals, with staff, with you all is us make adjustments in this and see how it nets out to ultimately get to um a budget that

098we um can support and one that we hope our board would approve. Uh and so, I I I don't know that we often kind of see how things break down, but there are some things that are just not movable, you know, like utilities. You know, $22 million even if we um reduce staff and have fewer students, I mean, the reality of it all is we've become more efficient with bond pro- uh improvement projects, but the cost of energy has gone up year over year. Um so, this is just really meant to introduce it. There's not uh an exercise associated with it at this point, but I wanted to be really clear that if you take our budget, it how it currently ties to each of the big elements within our system, then look at uh

099what $180 million does as a reduction, uh distribute that proportional, but taking a higher percent when it comes to non-campus based reductions, you can kind of see what those impacts could be. Um again, this is going to shift. This is really just a way to introduce a tool that will be referenced later. Um so, you have a hard copy, you'll see this progress along as we kind of tweak and make adjustments um based on potential cost reductions. And again, there's going to be lots of them, and there's going to be iterations of a single item multiple ways. Uh so, as we go to the next set of slides cuz I think this is really where we want to just kind of share um let me have to exit this, I think. Josh, can you handle

100this part? >> I got it. Sorry, not a multitasker. And I wanted to share with people that the administration is working to get the budget presentation into board docs because I know that was a whole lot of small text and we'll be talking about more specific dollar things now. So, anyone who wants to look for it will be there. Oh, it's on there. Okay, excellent. Good. Thank you. Yeah. So, um for our trustees, the next set of slides, what they're meant to be are large larger buckets of items that we know have to be explored in ultimate in an effort to ultimately bridge uh and it and get to one of these scenarios that Katrina just mentioned, whether it's tomorrow A, B, C, or D. Um uh which includes about 117 to 130 million dollars

101in total reductions. And so, I'm going to go through them uh the way that the um tables are formatted is the the the larger group of reductions is in column one. Uh the district priorities uh that we've talked about that we presented are each columns and what we're trying to just show is, "Hey, if this reduction is taken in its current form as as the way it's described, these are the initiatives or the district priorities that will be impacted." Uh and on the far right-hand column, you'll see an estimated savings. Again, it's going to change based on the nuance of in the details within each one of them. And then at the far far right, outside of the column, we're communicating what districts have already done around us or what other urbans have already done.

102And what you're going to see are many of things that we're proposing are things that have already been done uh in other areas um and we're having to consider them now. So, first, uh 15% reduction to non uh non-staffing campuses. So, uh this is uh looking at non-staffing budgets tied to our campuses. Uh in the past, we have uh made adjustments to staffing whenever enrollment shifts downward, but we haven't always made the same reduction when it comes to non-staffing expenditures. This might be in the form of material. It could be contracts. Um they're going to be these other uh allocations that campuses have. And so, the thought here is, "If we're going to reduce because you have there's fewer staff or there's fewer students, the um non-staffing budget should also reduce." The next one, reduction

103of current year non-staffing balances. So, this would be departmental. So, this would be tied to non-campuses. This would be all the support departments. Uh 17.1 million dollars. Uh 15% next. I'm going to go through these pretty quick cuz we have uh 30 minutes left and I want to make sure I get through them all. Uh and then it's just introduction. We're going to come back and over and over again. Uh the next one, 15% reduction to non-staffing uh departmental uh um departments. Uh you can see the impact uh 9.2 million dollars. Across other districts, uh they're doing that as well. If we go to slide 14, we can move us to the next slide, whoever's controlling the slides. Uh elimination of fund funding tied to vacant positions. This is departments. So, what happens in in

104a school system like Austin ISD is there are vacancies. We know about them. We carry them in our budgets. And one of the things that Katrina and I are very keen on is getting to a place where our budget meets our reality. And in many cases, we have vacancies that we carry and we collapse them or we sweep the vacancy savings. What we're saying now is, "Let's collapse them all." Or let's collapse a significant portion of them. They have not been filled. They've existed for a period of time. Um now, there's going to be nuance to this. I don't want anybody to leave here thinking that every vacancy is going to be collapsed, but I what we want to communicate is that it's a large number. Uh it lives in our budget. Um and year

105over year, this kind of continues on. And so, it is an area that I believe I think we believe absolutely has to be addressed. Um so again, this would be elimination of funding tied to vacant positions. Again, departmental non-campus. Um total savings estimated 23.1 million dollars. And yes, other school districts have already done this. Uh um secondary campus uh um teacher allotments tied to seven of eight. Uh moving from six of eight to seven of eight. We've talked about it um before. It's something we've been able to fend off. I think that we're at a point now where we have to reintroduce it as a consideration. Uh you can see here, we certainly believe it's going to impact um various district priorities. Right now, we're estimating the total um savings of 16 million. But again,

106this is one of those that could be deployed or implemented um in a variety of ways to either recognize the needs of a s- of a of the schools and and the differentiated needs or by phasing. So, just I'm again, I'm trying to communicate the bigger buckets and then just know that there's more that'll work that'll come to get the details. Reduce travel and cell phone stipends. And to be clear on that, are you saying you will propose that to us or that is something we it is on the very long list of things Oh, I >> have to discuss as a community a board and an administration. So, I So, both. I think that it's what I what what I'm The reason it's on here cuz I think given the numbers that we're having

107to tackle, I don't know how we get to the end of it without actually truly having it be on the table. Um that's just the the reality of where we are. So, we have to go through that process with community. We'll have to go through that process with the board. Um I can't None of these things I I will say are for certain going to be or not going to be in the final budget. What I'm wanting to do is to communicate, "These are the bigger bins, the bigger line items that we have to consider if we're going to bridge that. Everything else is just it's just too small to ever materialize in something that'll get us where we want to be." Um Reduce travel and cell phone stipends. Uh this is something in Austin

108ISD that I think uh has has just progressed over a period of time. Um you know, we certainly want to make sure that staff are reimbursed for travel that's tied to work. Um but what's happened over time is allocations of stipends for travel have been tied to positions. And those positions don't always travel in the way that they used to, you know, years ago. Uh so, it's a 1.2 million dollar spend. Uh there'll be some offset that we're considering because we do want staff to be able to, you know, reimburse for travel. But the way that it's currently set up in our system, the way it's been for a very long time, we believe there's a savings there of 1.2 million dollars. And again, other school districts have done this. Um this one is is

109one that uh you know, I think is again, we're going to have talking about everything. Uh special education stipends, campus and departmental. Um you know, there we as a district have invested in stipends across the board. Um certainly we've made a lot of work, a lot of headway when it comes to special education. Um and and we have base salary, we have TIA, we have uh stipends on top of that. Uh so, this is acknowledging not a full reduction, but some proportional reduction. I think this is assuming 50%. Um but I I want to communicate I've heard this from trustees and I in years past and I certainly believe that, you know, when if you look at this table here, right, when it comes to total staffing, I mean, stipends, uh I forgot where it

110lives here. Uh but we're spending 39 million dollars on stipends as a whole. Right? Now, those stipends are are for they're for a reason, right? I mean, they're there to um support staff, um attract staff, to create a compensation model that um keeps us filled and enabled to do what we what we need to do to serve our students, but it is a large number. We've been asked about looking at this. And so, what we're doing is saying, "Okay, we're going to have to look at this." Um uh elementary campus staffing adjustments, central areas. Uh this is something that has come about a couple times now. Uh other districts have already gone through this process. Um you know, we we know that the district made some decisions, you know, in '22 and '21. Uh what

111we're saying here is we have to explore it. Um this is one of those things I don't know how you get to the end without having the conversation. Adjustments to nursing and student health services. Uh we don't have quite a number yet, but when we talk about those things that are legally required versus those things that we as a district believe in, um you know, providing these services to our students and to our campuses is something we believe in. Um the current model right now is is one one nursing allocation per campus. Uh we think that we have to explore this, especially given how some of our schools have changed in student population. Is there a different model we could explore? Um we don't have a a value amount on there, but it's something that

112we think absolutely has to be considered. Uh and again, I I think all of these as unsettling as these are, I'm merely wanting to introduce them so we talk about what they are. This work going to be done. But I I don't want to shy away from the fact that we have to explore them. Uh reduction of campus safety monitors, secondary campuses. Um this is not SROs. Uh this is not anything tied to HB3. But we do have security monitors and safety monitors that are um at our secondary campuses. Uh 2.9 million. Um we know that our campuses rely on them. We know that they're they serve a need. Our our students um are supported throughout the school day uh by these individuals. But um again, when it comes to legally required versus what how

113we've staffed it's one of those areas that, you know, may need to be explored. Conversion of librarian positions to support roles. Again, one of those really hard ones to even talk about. You know, again, what what is funded versus what what we do is very there's a gap there. And so, when you look at that, it's not a big number, but it is one that we felt in full transparency need to be discussed. Certainly a huge impact to the system. But, wanted to to be transparent about the fact that it's one of those things that isn't required, [clears throat] but but something that we do. Reduction of instructional initiative funding. This is going back to some of the contracts that we have and partnerships that we have. I think there's a real acknowledgement that these

114partnerships yield outcomes. And and they move the needle. You know, it's the question at this point given the number, where are they focused? Is it literacy? Is it another core function core area or is it something else? Is it an opportunity to reduce and if so, should we consider it? I think there's some value there, 600,000. Elimination of sign-on bonuses, 400,000. Something that was adopted some time ago whenever someone is relocating to Austin ISD, there's a little a bonus that's that's provided to I think assist with relocation. We're proposing looking at that and then potentially eliminating it. Potential staffing adjustments. Campuses. 2.5 million. And then potential staffing adjustments for departments, 40.9 million. Um you know, just continuing to look at where we can reduce based on um kind of the budget constraints that we have.

115This next one, we don't have a number for it. Adjustment reduction of academic programs. You know, the reality of it all is there are lots of programs that we have and those programs are the reason that we staff the way that we do. There's a real question around you know, if we maintain the current programs, the staffing has to be there. If there's an opportunity to reduce or to modify or to adjust, we need to make sure it's aligned with the academic vision and framework, but also with who we are. It's one of those tough things that we have to talk about, but we need to understand what those allocations look like. You know, are they uh are we able to support them moving forward and are they are the right complement of programs at

116these campuses? Especially when you think about some of the kind of tailored programming that we see at many of our schools. Technology reductions, one-to-one to program based support. This is one that Oscar and I have talked about. I think I just heard Trust President Boswell mention it. I think there's there's total agreement and I think a desire from the administration to move forward in a way that doesn't presume one-to-one, but kind of leans into a model that ties technology that's developmentally appropriate to the needs of the curriculum and the program, which means that it's going to be differentiated by campus type, by program, and it's going to look very different. So, it's it's not a one-to-one. We are going to be moving away from that. We recognize that. Oscar and I and teams have talked

117about it. It's a movement I think that's moving in the right direction. It's really hard at this moment to kind of quantify what that looks like. The other reality is many of those costs are tied to bond dollars. But, I I do think it's important because I I when we when you make com when we talk about these things, I agree with you. There isn't like it's not one-to-one is so easy to say. The other thing is is tailored support, right? Based on the needs of our schools. And that may look different. In some schools it may be labs. In some schools it may be you know, an allotment of devices to support a certain class. And and then at the same time we need to make sure for the summative assessments, right? STAR, we

118have an inventory of technology to implement, right? So, so we have to kind of change how we operate and we can do that and we're going to do that. But, I think it's important that we talk about it and again, it's part of the conversation. Something Trustee D'Agostino said a couple weeks back that I think is important to talk about is naming goals for revenue generation and targets. You know, the board quote-unquote released us to to go and and get creative when it came to naming rights, to revenue generation, and and I think we've done a good job. There's still there's there's lots of things we're able to do. You know, naming right opportunities, we we feel good about the direction we're headed. Philanthropic, certainly we we think there's opportunities there. I think the real

119reality of it all is good to have a target, but it's not going to solve the problem, right? I think it's just and so we got to create a target, pursue it, and be bold, but I don't want that to be the crutch that rely on to allow something not to be addressed downstream. So, this the there these numbers are are large numbers. They they they do move the budget. And over the course of the next many weeks, we'll have those conversations with community. We're going to be coming back to the board every 2 weeks. Unfortunately, um you know, the timing between board meeting and information session means there's probably going to be the meeting in between. But, I think it's important to share updates, where we are, where we're expecting to be so that

120we're getting feedback and can adjust in real time to get to where we need to be. So, I'll hand it back to to Katrina to kind of take us to the next couple slides and then Can I ask with regards to one of the flows of conversation tonight, but also just a bigger reality about what we're learning about impact of technology in the classroom, both positive and and negative. Is there a point of uh is there a an opportunity for a point of articulation between cost reductions and better work in terms of serving our students academically? Yeah, I mean I yes, I just think that we have to be very intentional about how we notate that because I think this is one that I think would actually improve our ability to serve our students. Then

121fortunately, many of the other things um are are going the wrong direction, right? And and I And so, yes, I think that's it's important. The measles chart is an attempt to kind of show broad strokes of of the overall impacts of cuts and potential adds, not adds, but investments. But, yeah, no, I think that's that's exactly right. >> And I do understand that we're you know, we're focused on budget considerations, but what we're mostly talking about is mitigation. Like, how do we reduce the negative impacts of this? And one of the things maybe doesn't rise to the level of guidelines or expectations, but you know, opportunities to actually get better through a budget cut is a pretty cool thing. And I I love it whenever that can be effective. Yeah, I mean, you know, there's

122something that Oscar and I, I mean, it was a year and a half ago we we did inventory and there was what, 500,000 dollars in in lost battery chargers or, you know, like these are big numbers, right? And and I think about, okay, well, how many staff how many teachers is that? You know, how many You know, and and and there was a desire back in the day to go to one-to-one and and I don't it is what it was. I think we need to have a meaningful conversation aligned with the academic vision and framework to move away from that and have just a tailored support of technology, but it has to be aligned, right? And and I think that's the way we should look at operations, finance, technology, and talent strategies. All in service

123to the classroom. But, yeah, no, I agree with you, Trustee Foster. And I think this is a real opportunity to just hit the nail on the head and just say this is what we're doing, is how we're going to do it. This coupled with the academic vision framework, I think puts us on the right page on the right on the right path. And I do really appreciate I'm sorry we have to call it a measles chart. I learned that that was what it was called recently from you, but I love the chart. I think it's really um valuable to talk about that academic impact and other impacts as we're talking about um potential cuts. And I really appreciate that we've we've included accountability, we've included enrollment, we've included lots of other elements to this. So,

124thank you for framing it that way cuz that is as Trustee Foster said, we're talking about how we serve our students ultimately in the classroom. And it's really hard to see the cuts get closer and closer to that student experience. So, thank you. So, the next slide talks about what other districts are doing. We've kind of gone over this, but they're doing some of the same things we're doing. We're I'm constantly in conversations with other CFOs to see if there are any ideas or things that they're doing that can help improve the suggestions that we bring forward. Staffing through attrition is some hiring freeze, compensation constraints, limited raises or stipend reductions. We're seeing a lot of stipends being impacted. Non-essential purchases and initiatives, which is slowing spending down. Select positions and departments, school closures and

125consolidations. So, what we're seeing here from talking to other school districts, they're doing some of the similar work that we're doing here at Austin ISD. Currently under review, I want to take a little time to talk about this slide because I want us to all be clear. Remember we talked about earlier we a preliminary budget. This is preliminary. We will continuously refine the preliminary budget assumptions and calculations so we can expect that those numbers that you've seen previously will continue to be updated. We are reviewing all preliminary budget items specifically to revenue and expenses. We met with our ad hoc committee on yesterday and had a really good conversation. We ended up going over some time. We have some really committed community members who understand where we are as a district and they're really committing

126their time to come in and we appreciate that to listen to help us have conversations and flush out ideas for next steps. Reviewing department budgets with each leader. I had my first meeting today with ops with Christine Steenport and then we're going to have meetings with special education scheduled. We're going to continue to explore other strategies. The list that our superintendent just went over ideas are not the only ones. We will continuously try to find additional strategies. Partnership space and lease audit. I had a team member do that. We see that there is some varying discrepancies on people utilizing our space and how can we get additional revenue there and monitor to make sure that everything is staying consistent. Review of the print shop. We've talked about there's some strong belief that the print shop

127can do additional to bring in additional money's but for the last two to the last few years at the end of the year we had to bail out the print shop because they had a deficit budget. Review budget costs and so right now we do our budget on average salaries and so continuously looking at is that the best way for us to budget our salaries. One of the reasons we look at this, we're looking at this line item in more specific specificity is because we want to be clear about the budget. Every year when we get to the end of the year, what we've said the deficit was be, we've done better than that. And so one of the large reasons of that is because of payroll and so what we don't want to do

128is have this budget, we make these hard decisions on a number and then at the end of the year we come in and we've done better. So, we have I'm really charging my team and myself to do a much better job at looking at our payroll budget. Review our benefits and options and plans, that's another way. And then Christine and I talked today about transportation ridership. One of the things she specifically discussed today is that we have some buses where there's limited riders and so her and her team are going to work on look at that and we're going to continue to review to see if we can find any additional reductions there. So, timeline to budget adoption April 1st reductions were identified, which just means we had come up with a list of how

129we can save these through some of the ways that we can do. These are some of the strategies. This is not specifically to what we will do. This is just a list of how we can have multiple strategies to reduce our $181 million projected budget deficit. April 23rd you will receive the preliminary budget. It should be much clear because as our superintendent spoke up, we're going to have a lot of meetings from here until then. Ali and her team are working on some real detail communications plans and so we're going to have a lot of feedback with from whether it's teaching learning and leading, whether it's ops, tech or our community. May 7th to do a list of notification of initial FY26 and 27 budget reductions. This Yeah, this is a one that Katrina and

130I talked about adding. I want to point our trustees to this. So, May 7th I want to make sure that if someone is impacted by decision that is to come and ultimately be approved in late June that there's an awareness that that's the direction that we're headed. And so um I'm really mindful of I get the vote hasn't taken place um on May 7th but there are going to be things that are known. And so to the extent possible and maybe this doesn't happen but to the extent possible if there is clarity and there's consensus as I understand it from the board then I would like to communicate to those impacted staff or to those impacted departments that this is to come so that we can begin to support them in whatever transition occurs. Um

131our budget process is goes vote doesn't say vote to the vote doesn't occur till the end of June, right? And so if we know something early, we know that's the direction we're going in some cases, I would appreciate the opportunity to be able to communicate early in that way. Again, it may not materialize, it may not be anything but I wanted our trustees to know at least I was thinking about that and wanting to potentially have that be a milestone for consideration. So, just I wanted to it's new. I just felt pretty strongly that we needed to have that milestone. So, sorry Katrina, I interrupted you. No, that's perfect. I I wanted us to elaborate on that. May 21st recommended budget will be presented to the board. June 18th will be the budget adoption and

132then the launch will be July of 2026. And so we always want to end with upcoming opportunities. I know like I spoke of early Ali has a communications plan roll out but these are some of the dates that we already have. Yesterday we had our ad hoc meeting. April 25th we have a virtual meeting on Saturday. Tuesday, April 28th we have an in-person meeting at Austin High School at 6:00 p.m. Monday, May 4th we will have another ad hoc meeting and then Saturday, May 9th from 11:00 to 12:00 we will have another virtual meeting. And then you see we've added here bi-weekly board work sessions and we're also part of the strategies or the communications plan that Ali and her team are creating, we're going to start meeting with our senior leadership specifically just to

133discuss budget weekly. So, that is the end of our presentation today. We appreciate you coming out on a Tuesday afternoon and we're here to answer any additional questions. Yeah, and just to reinforce so we are going to be asking our trustees to engage with us on a recurring basis um between the board meeting information meeting every couple weeks. I know Tuesday's kind of tough. We'll try to find the right balance. It may just be Thursday, Thursday, Thursday and you know, the trustees that can come we'd love to have you all cuz it really is going to help guide our work. So that'll be consistent all the way through the June. Thank you and I know that you've planned for the trustees who can't be here a meeting with staff on Wednesday. Not a quorum of

134the board but a meeting so they can hear what we've heard, correct? It's tomorrow at 4:00. >> 4:00. Tomorrow at 4:00. So, I'm glad that they will have a chance to hear everything we've heard in person before we're together on Thursday. First of all, can I make a quick Yeah, comment. So, you did a great job as always. Thank you. You did say something at the beginning when you mentioned that you know, when we approved our budget last June it was for it would show a $19 million deficit and now it's $49 million but I do want to make clear as always it is not because of anything irresponsible that this district has done. We have actually made nearly double the cuts that that we had approved in our budget. The bulk of that difference

135is because of one sale, one property sale which we expect to you know, to make progress on all of that but could you clarify as well that as we've discussed in previous board meetings that we expect to see that 30 that $30 difference shrink by the time we end this fiscal year. Whoever. Yes, we do. We do expect we're still working very hard to make sure that we can reduce the additional $30 by the end of June. And yes, I do also want to make really make sure that we clarify. I know our superintendent talked about this that one of the land sales that we had in the $45 million that we talked about was for $26 million and that land sale did not materialize this fiscal year and so that is another reason why

136we have to be very, very careful when we're budgeting because what that does is our property values decreased this year and then we didn't have the land sale. So, that's just that much more ground that we have to make up in the current year. Thank you. Any comments before we wrap? I know we'll have an opportunity as a whole board to talk in more detail about the specific things that are on the table being considered. I know we'll have a chance to come together. Um and I know our community will have a chance to weigh in and help us um think about this and I know you're presenting this out in the community. So, thank you. It's um helpful to have some detail, a menu, a list. So, thank you. I know a lot of

137work has been done and and really appreciate you bringing this to everybody. Um Anything else before we wrap up? Okay, do I have a motion motion to adjourn? So moved. All right, the meeting is adjourned. Having a motion from Secretary Foster, the meeting is adjourned at 7:57 p.m. Thank you.