Katy ISD’s board of trustees met on March 23 for a work study meeting, examining the impact of slowing enrollment on district finances and staffing needs. Several public speakers addressed the growing costs of health care as well as recent staffing cuts and the potential effects on students.

Director of Risk Management Lance Nauman presented a semi-annual update on the district’s health plan. The district does not participate in the state’s TRS health plan but is self-insured and its plan is administered through Aetna. There are only about four health plans that fit the district’s needs, Nauman said – not an unlimited number of options from which to choose. The district’s plan “basically broke even” until 2019, but has had a deficit since 2020, growing from about $2.2 million then to a deficit of over $22 million in 2026, primarily driven by high pharmacy costs and specialty meds, he said. About 61 percent of staff members participate in the district’s health plan, he said, with the level remaining relatively stagnant, falling from about 68 percent.

Premiums have increased to keep up with “medical inflation,” with the district contributing $385 per employee per month to the plan costs. The district’s premiums are still less than premiums would be if KISD were part of the TRS system, which is possibly looking at double-digit premium increases next year, Nauman said. The district has been working to reduce health plan costs, initiating a comprehensive pharmacy review and improvements to benefit enrollment procedures. The district has added a virtual health program which is free to employees and their dependents and has rolled out a new pharmacy plan with HEB.

Board secretary Dawn Champagne said that teacher raises were not keeping up with increases in health care premiums; she asked for a comparison of plans with those in comparable districts such as Conroe and CyFair, and for one of the district’s HR staff to be repurposed as an “insurance advocate.” Board vice president Rebecca Fox asked for an updated comparison of the district’s plan to the TRS plan.

“We hear you that this is expensive,” Fox said. “For the last three years we have been biting at every tiny piece of something we can do to drive costs down and will continue to do that.”

Chief Financial Officer Chris Smith gave an update on the 2026-2027 budget with an update on the staffing plan, which drives 89 percent of the budget. Smith reminded that board that enrollment is 1800 students below the level the district budgeted for and that the district was budgeting for 295 fewer students for the next school year with projections expected to remain at that level for the following year. “We’re staffing up to that,” Smith said. He also said that the district is “putting more money into school safety than we ever have” although state funding has not increased enough to cover those costs. Special education continues to grow, with the district now at about 20 percent of students with special needs.

The drop in enrollment doesn’t just reduce the total received from the state through the per-student allotment; the district is also “getting dinged” in the fast-growth allotment by about $8 million as well, Smith said. As a result, the projected budget for the 2026-2027 school hear will fall to $1,114,565,696 – down more than $14.1 million from the official 2025-2026 budget of $1,128,720,787. “This is a paradigm shift for Katy ISD,” Smith said.

Additional expenses for the next school year will include opening an additional grade at the new Freeman High school, which will have its first group of twelfth graders.

“We are making a staffing correction,” Smith said. Normally, the district adds 200 to 300 teachers each year “but we didn’t need to do that this year,” Smith said. About 60 to 70 percent of the district’s employees are teachers, he said. “We are putting our bodies in teachers and not in other staff,” Smith said, noting that KISD is “running tighter” than neighboring districts in administrative staffing.

Chief Human Resources Officer Brian Schuss said that there would be a net reduction in positions this year, and that the district determined it was “unnecessary” to hold a job fair this year. The “enrollment balancing” process has been lengthened and will not be completed until mid-May. All current staff members will have a position in the 2026-2027 school year, Schuss said.

The board has already been made aware of staffing changes in some of the district’s programs such as the emergent bilingual program and the Opportunity Awareness Center, Schuss said. In addition, at the high school level the student-to-teacher ratio will be increased to 24:1 and 25:1, an increase of 0.5. The net reductions result in the elimination of 106 positions, and reductions will be realized through vacancies, attrition and excess, he said.

Smith said that the district has gone to zero-based budgeting and has made reductions of two percent in the maintenance department, reductions in utility expenses and the installation of GPS devices in vehicles to help keep expenses down. Software expenses continued to be reviewed, he said. Every department has been reduced, Smith said. These reductions are often offset by payroll increases due to raises for staff, he said.

The board also discussed a resolution supporting the free exercise of religion in KISD schools in response to SB 11. Two versions of the resolution were scheduled to be presented at the March 30 regular board meeting.

The board again reviewed the process for approval of library books and pulled two titles for additional review, one of which was about serial killer Ted Bundy; the other involved "explicit gender identity.”

The meeting ended with requests for additional data on health plan comparisons, fine arts rotations, and recent staff reassignments.

The next meeting of the board was scheduled for March 30, after the Katy Times went to press this week.

Future meeting of the board:

· Work study: April 13

· Regular board meeting: April 20