School beats economy; Standard & Poor's upgrades district's bond rating
In the midst of an economic crisis in Oklahoma, Mustang Public Schools can celebrate a crowning financial achievement. Standard & Poor's, a nationally recognized statistical credit rating organization, upgraded the district's bond rating from AA- negative to "AA- rating with a stable outlook."
Mustang Public Schools presents a financial plan annually to Standard & Poor's. With the state's financial crisis looming on the horizon, Mustang Schools implemented an efficiency plan two years ago to reduce expenditures and build the fund balance, or carryover. Carryover is the money a district has at the end of the school year after all the bills are paid. It operates much like a personal savings account. The carryover, or fund balance, protects a district when the unforeseen happens and it functions as cash flow at the beginning of the fiscal year in July, allowing the district to begin operation for the upcoming school year well before state aid and other funding sources arrive.
Dr. Sean McDaniel, superintendent, praised the budget team that created the efficiency plan and the district leadership, faculty and staff who helped make it successful.
"Despite the dismal financial climate and landscape in our state, Standard & Poor's sees that Mustang Public Schools is planning well, budgeting well and executing their plans well," he said. "Throughout all of this, we have not lost programs and we continue to support our kids."
McDaniel said the business side of running a district is not nearly as visible as the delivery of education to students but is vital to the overall health of a school system. He's thrilled with the rating upgrade.
"I think this is as good as it gets on the business side of things. On the kid side we have all sorts of things to celebrate. But from a business standpoint, this conveys to our patrons - the ones who are spending their dollars in bond elections - that their tax dollars are in good hands."
Chief Financial Officer Nancy McKay said the improved rating reflects the commitment to creating a strong, conservative financial position in the district.
"We had the challenge of not only weathering the cuts from the state, but also growing the fund balance," she said. "What S&P saw in our efficiency plan is that we will align our expenses and we will grow $1 million a year in our fund balance until we have reached the 8 to 10 percent goal adopted by the school board. While many other large districts saw their Standard & Poor's rating decline, ours was increased."
The notification from S&P said they view the district's market risk as low.
"The outlook on all ratings is stable to reflect our assessment of the district's ability to rebuild reserves and cut expenditures despite cuts in state aid and rapid enrollment growth," the letter said.