By Chris Eversole
Mustang Public Schools are staying financially strong while adding 75 new staff members and implementing pay raises the Legislature approved in the springs – changes that increased the annual budget to $73.1 million, up from $60.8 million.
The stability took years of preparation, said Chief Financial Officer Nancy McKay.
That preparation included:
Accumulating a robust fund balance in anticipation of the extra cost of opening two new schools this year;
Investing the district’s cash wisely;
Implementing cost savings, such as increasing the energy efficiency of buildings and reducing programs that were no longer a priority;
Developing the Bronco Club after-school program and other new revenue streams.
“We’ve been really good stewards of our dollars, and we’re always focused on getting the biggest bang for our bucks,” she said.
Keeping up with the financial demands of a growing school district is an ongoing job.
“We’ve grown by approximately 500 students each of the past two years, which is like adding the population of a new elementary school each year,” she said.
“We get additional state aid for our increased enrollment, but it doesn’t cover all of our costs.”
McKay began helping the school district strengthen its financial position when she served as a consultant to the district five years ago, after retiring from 35 years of managing finances for Jenks Public Schools.
The consulting job turned into joining Mustang Schools. “I flunked retirement,” McKay said.
The current fiscal year brought two challenges.
First, the Legislature only funded the pay raises, not the full retirement contribution that goes with them.
This resulted in an unfunded mandate that cost the district over $900,000 this year.
The Mustang district fully funds employee retirement, based on an agreement years ago with the Mustang Education Association, meaning it pays 16.5 percent of the amount of each employee’s pay to the state retirement system.
“By law, the district is only required to pay 9.5 percent and the employee is responsible for 7 percent, but Mustang Public Schools fund the entire contribution,” McKay said. “It’s a good recruitment tool and a way to let our employees know how much we appreciate them.”
The second challenge this school year was the valuation and property taxes from OGE Energy Corp. to support Mustang Schools for the year declined.
That’s because most of the land under the OGE turbines is in the Yukon school district now as a result of a major renovation over the past three years.
The new turbines, which opened last year, replaced an outdated generating system that paid most of their property taxes to Mustang schools. With the change, Mustang’s net assessed value from the OGE plant dropped $10.2 million, to $19.1 million.
Because of the OGE loss, the district’s increase in property tax revenue – which is based on increased property valuation – grew by only 2 percent this year.
“We usually see an increase of 6 to 8 percent because of all the home construction that’s occurring,” McKay said.
The Mustang fund balance at the end of the past fiscal year in June was $13.2 million, which was 20 percent of its budget.
“We need a hefty fund balance for several reasons – one being our major revenue sources do not come in until later in the school year,” McKay said.
“A solid fund balance provides the cashflow needed to pay salaries, buy supplies, pay utilities and buy food for our child nutrition program while waiting on this revenue.”
In addition, the fund balance acts as a safety net if the district experiences revenue shortfalls from state and local sources.
“We keep every penny invested until needed,” McKay said. “Investing our funds generates additional money for the district.”
In the past fiscal year, investment earnings were more than $300,000.
The cost-savings were important.
“I hate it when people say, ‘This is the way we’ve always done it,’” McKay said.
“We have to be forward-thinkers, always searching to identify processes and procedures that create better ways to do things that cost less.”
As for the new revenue streams, the Bronco Club is a win-win, McKay said. “We’re able to use our buildings after-hours to provide a curriculum-based after school child care program. It is a wonderful service to our students and the community,” she said.
The growth of Mustang Schools over the past 10 years has been explosive. “We went from a 2A school to a 6A powerhouse overnight, and the growth keeps coming. There are 37 housing developments in progress in the school district.”