1. Oklahoma Association of School Business Officials April 26, 2018

2. A Mission Older Than the State
The Organic Act passed by the US Congress in 1890 assured that when there was a state of Oklahoma, lands would be assigned to support education.
The Enabling Act, which brought Oklahoma into the Union of States, assigned lands into trust to support education.

3. The CLO is Anchored in the Founding Documents of the State of Oklahoma
Oklahoma Enabling Act
Oklahoma Constitution

4. Restraints and Guides
Enabling Act of 1906 by which Oklahoma became a State
Constitutional provisions which restrict the use of the money
The Oklahoma Constitution states that, “the principal (or corpus) shall be deemed a trust fund held by the state and shall ever remain inviolate.”
The Oklahoma Supreme Court has called the Trusts “sacred”.
State Statutes

5. What is the CLO’s Constitutional Role ?
To manage assets for the benefit of our public education beneficiaries noted in the Oklahoma Enabling Act (Section 7) and the Oklahoma Constitution (Article 11, Section 1 and Section 2)

6. Who Are the Commissioners of the Agency?
Governor
Lt. Governor
Auditor and Inspector
State Superintendent
Secretary of Agriculture

7. “ Managing Assets to Support Education”

8. CLO Holdings
Much of the 3.2 million acres assigned for public education at statehood were sold early in the 20th century and the income placed in permanent trusts
From among the original lands, these assets are under the management of the Commissioners of the Land Office
750,000 surface acres
1,200,000 mineral acres

9. Real Estate and Minerals Inventory
Import Map of holdings

10. No land was assigned in Indian Territory (essentially the east half of Oklahoma). Funds in lieu of land in Indian Territory were placed in trust ($5 Million).

11. Lands Assigned for Common Education
Sections 16 and 36 of each Township were placed in trust for the benefit of Common Education.

12. Lands Assigned for Higher Education
Two categories of assignments were made to benefit specified institutions of Higher Education:
Section 13 of each Township was set aside to benefit the Educational Institutions. A Permanent Trust is set to benefit the institutions that participate in the Section 13 funds.
Quantity Grants were made, identifying specific land to be managed for the benefit of specific higher education institutions. (In Lieu of /New College Funds)

13. Thirteen Colleges and Universities receive distributions from CLO
University of Oklahoma
Oklahoma State University
Northern Oklahoma College
Langston University
Southeastern Oklahoma State University
University of Central Oklahoma

14. Thirteen Colleges and Universities receive distributions from CLO (Con’t)
East Central University
Northeastern State University
Northwestern Oklahoma State University
Southwestern Oklahoma State University
Cameron University
Oklahoma Panhandle State University
University of Science and Arts of Oklahoma

15. How are moneys Apportioned ?
Special grants of land were designated to Higher Education beneficiaries by the Oklahoma Enabling Act (Section 12)…
University of Oklahoma
Oklahoma A&M (OSU)
Northern Oklahoma College
Langston University
Normal Schools

16. What are our Responsibilities ?
To manage assets and permanent trusts for the benefit of current and future beneficiaries
To create income consistent with a sound investment policy, while protecting and growing the corpus of the trust funds
To manage and lease mineral holdings for beneficiaries
To manage, maintain, improve and lease surface acreage for beneficiaries
To manage an investment portfolio, consistent with CLO investment policies

17. Trusts Managed CLO manages the funds in 9 State Trusts:
The assets in the largest trust fund are managed for common schools
The assets in six trusts are managed for the benefit of higher education institutions.
The assets in two small trusts are managed for the benefit of public buildings throughout the state.
Proportionally…approximately 70% of the annual distributions are made to Oklahoma’s common schools, and 30% to higher education.

18. What Assets are Distributed Annually?
Income from agriculture and commercial leases
Income from interest earnings from bonds
Dividend income from investments in equities
Since 2010, the Lease Bonuses from mineral lease auctions

19. Income from agricultural leases

20. Income from commercial leases

21. Interest earnings from bonds Dividend income from equities

22. Lease Bonuses from mineral lease auctions

23. How are CLO Distributions Made to Public Schools?
Each public school district receives monthly distribution based upon their average daily attendance.
The Department of Education certifies the number of students, and CLO determines the payment due each based upon the funding available for distribution.
The CLO advises the State Treasurer, and available funds are distributed monthly.

24. Since Statehood Nearly $3
Since Statehood Nearly $3.2 billion has been Distributed…How Do Schools, Colleges and Universities Use the Funds Generated by the CLO?
Instruction
Equipment
Repairs
Buildings
Research

25. FY 2017 Distributions to Beneficiaries
Highest annual distributions in agency history to K-12 beneficiaries: $103,403,605
Distributions to higher education: $34,042,873
2nd highest total annual distribution for all beneficiaries in state history: $137,473,478

26. 5 Year Distribution History
Common Schools
Higher Education
Total
FY 2013
$ 93,000,000
$35,753,406
$128,753,406
FY 2014
$ 93,626,718
$32,756,046
$126,382,764
FY 2015
$ 97,500,001
$31,464,149
$128,964,150
FY 2016
$102,171,947
$32,156,709
$134,328,656
FY 2017
$103,403,605
$34,042,873
$137,446,478

27. Fiscal Years
The average K-12 school district received 234% more than 10 years ago
Higher education institutions received 207% more than 10 years ago

28. The Recent Years
It took ninety five years for CLO’s permanent trust funds to reach the $1 billion threshold
It took only fifteen additional years for the permanent funds to pass the $2.4 billion mark
The CLO Permanent Trust funds have grown by $800 million (50% in the last 6 years)

29. CLO Innovations and Firsts
First state agency to offer secure, electronic mineral lease bonus auctions with secure with video and audio streaming
First state agency to acquire supplemental private insurance to protect state assets from disasters associated with burning red cedars

30. CLO Innovations and Firsts
Triangulation of data among CLO, the Oklahoma Corporation Commission and Oklahoma Tax Commission to assure compliance
Created five year rolling average to assure stability of distributions for beneficiaries
First commercial office acquisitions since statehood

31. Strategies to Increase Distributions
Grow the Trust funds
Land exchanges to maximize the value of commercial parcels
Distribution of easement income
Diversification of Portfolio to include more reliance on growth stocks, MLP’s, and commercial real estate
Pursuit of Late Payment Interest

32. Preserving the Assets for the Future
Stewardship, Restoration and Protection of the Trust Assets
Soil Conservation
Noxious Infestations
Develop water resources on the land
Records Management

33. Preservation of Assets
Improved Stewardship… including soil and water conservation, and water resource development

34. Preservation of Assets
More Conservation Improvements on CLO Land than at any time since the 1980’s
More acres of Red Cedar removal than any time in CLO history

35. Goals for the Fallin Years
Continue to grow the professionalism, standards and efficiency of the Agency
Distribute $1 billion to beneficiaries in the 8 year time frame
Increase the value of the invested trust fund from $1.6 billion in 2011 to $2.7 billion by 2019
Use the commercial lands of the CLO to generate at least 3,000 jobs in Oklahoma and $10 million increase in annual distributions to beneficiaries

36. Every child in Oklahoma has a GROWING trust fund that helps to support his or her education