Austin ISD is projecting a larger budget shortfall for this fiscal year after the sale of a former school property has been delayed.
Additionally, the district is looking to further cut costs next fiscal year by staffing campuses to more closely reflect enrollment, which has continued to decline each school year. AISD has adopted deficit budgets since fiscal year 2017-28, excluding FY 2022-23, Chief Financial Officer Katrina Montgomery said at a Feb. 12 board meeting.
“This is an opportunity for us to budget better,” Montgomery said. “We want to … make sure that we’re not continuously passing deficit budgets.”
What’s happening
AISD is aiming to reduce a projected $137.41 million budget shortfall to $63.26 million in FY 2025-26 through $26.41 million in cost-saving strategies, including a $16.9 million property sale, according to district documents.
In late January, the AISD board of trustees approved the sale of the former Brooke Elementary campus, which closed in 2020, to Trammell Crow Corporation and High Street. The development is slated to serve as a multifamily apartment complex with market-rate and affordable units above ground-floor retail, an AISD spokesperson told Community Impact.
AISD was initially projected to reduce a $112.25 million shortfall to $19.75 million in its FY 2025-26 budget adopted in June. The district’s planned cost savings were cut by $26 million due to the sale of a district property being delayed from this fiscal year to FY 2026-27, Montgomery said at the Feb. 12 board meeting.
In case you missed it
Community pushback and pending litigation has slowed AISD’s plans to sell the former Rosedale School campus in North Central Austin to OHT Partners. The developer has proposed building a 435-unit, market-rate apartment complex spanning six stories with a parking garage.
In late October, the district filed a lawsuit against many Rosedale residents asking the Travis County District Court to interpret a deed restriction on the property and issue a declaratory action. The deed restriction, which originated in 1938, states that “no lot of this subdivision shall ever be used for any other purpose than that of a residence.”
Some community members have argued that the deed restriction limited developers to building one house on a singular lot in the neighborhood and would not apply to a large apartment complex development. At a Feb. 11 community meeting, Rosedale residents shared concerns about the neighborhood’s streets being able to handle increased traffic from the development.
The proposed apartment complex is anticipated to increase the number of daily vehicle trips in the area from nearly 500 to almost 2,000. City of Austin officials have recommended the developer reduce the amount of daily vehicle trips to 1,580, according to city documents.
“This site isn’t on an arterial or transit corridor. It’s on residential streets, and it’s unprecedented,” Rosedale resident Chris Allen told Community Impact in October.
OHT Partners representatives said the developer would be required to pay street impact fees that would go toward transportation improvements in the area.
Rosedale neighborhood residents who were named as defendants in a lawsuit from Austin ISD raised their hands at a Feb. 11 community meeting. (Chloe Young/Community Impact)What’s next
A rezoning proposal for the property is set to appear before the city’s Zoning and Platting Commission on Feb. 17, according to the meeting agenda. Many residents have requested that the Zoning and Platting Commission delay making a rezoning recommendation for the Rosedale School site, Allen said.
At the Feb. 11 community meeting, Austin City Council Member Mike Siegel said he would like city council to wait on making zoning changes until the AISD lawsuit is heard.
“It would be a waste of city resources to involve all our peers in negotiating all the fine points if the court is going to go ahead and say the restrictive covenant prevents the project altogether,” Siegel said.
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What else?
For FY 2026-27, the district is aiming to save money by changing its staffing approach to better reflect actual enrollment, Montgomery said. In past school years, some campuses have been overstaffed, she said.
“We need to understand what our enrollment is and once we understand what our enrollment is, that is how we should decide what staffing will look like,” Montgomery said.
The district will base its staffing on a projected enrollment of 69,550 students next fiscal year, Montgomery said. The remainder of the district’s budget will be based on a decreased enrollment projection of nearly 66,800 students.
The lower enrollment figure is anticipated to cushion AISD’s budget as the state prepares to implement an education savings accounts program that will allocate some families money to pay for private school tuition next school year, Montgomery said. Additionally, AISD will close 10 campuses this summer to eliminate thousands of vacant student seats.
AISD’s enrollment has declined by more than 10,000 students since the 2018-19 school year, according to district data. Superintendent Matias Segura said the district’s enrollment has also been affected by changes to federal immigration policies.
Stay tuned
District officials will update the board of trustees on plans to repurpose or sell closing school facilities during the board’s closed executive session in two weeks, Segura said.