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The Ohio Auditor of State has developed Financial Health Indicators as a tool to gather financial information, percentages, and ratios Hudson’s annual financial statements to measure financial stability. The report indicates there are three cautionary outlooks and one critical outlook. These outlooks are a result of a strategic investment in Hudson’s future, as well as investments to address aging infrastructure needs.
Hudson has been, and continues to be, financially stable and in excellent financial health. We continue to maintain an AAA credit rating, the highest rating available. Traditionally, we have always maintained a carryover fund balance of more than 40%, higher than many communities in Ohio.
The State’s report scores were anticipated because we are strategically investing some of our carryover balance in major initiatives that will generate a return on investment for our citizens, such as high-speed fiber broadband and Downtown Phase II.
In addition, we have increased our investment in major capital and infrastructure improvements, primarily roads and stormwater. After these major investments, the City’s current carryover balance is 35.6%, an appropriately conservative carryover balance.
The State report also noted our debt compared to total revenue due. The negative rating was due in part to our accelerated repayment of debt for road improvements and the repayment of voted bond levies.
With the recent elimination of the estate tax, reduction in local government funding, and low interest earnings, the City lost more than $2,000,000 or 10% of our General Fund annual revenue. Despite these significant cuts in funding, the City has been able to maintain excellent credit and keep a healthy carryover fund balance through prudent fiscal management and strong cost control measures.