District gets good Aa2 bond rate
At a time when bad credit seems to be catching up with many Americans, that isn't the case for the Hudson School District.
The Board of Education heard a report that the district's credit rating is among the best in the state and, as a result, it will get an interest rate of 3.35 percent on the refunding of $5,185,000 general obligation bonds. That will mean a savings -- after costs -- of $223,042 over the life of the bonds. The board approved the refunding unanimously.
District Financial Services Director Tim Erickson told the board that the district received an Aa2 rating. According to the report from Moody's Investors Service, the rating reflects "the district's growing tax base within the metropolitan Minneapolis-St. Paul area, strong reserve levels and manageable debt levels with no additional borrowing planned in the near term."
The report went on to say that "resident wealth levels are well above those of the state, with per capita income and median family income at 133 percent and 144 percent of state norms, respectively."
The report said the district's financial operations remain strong "due to a demonstrated history of conservative budgeting, growing enrollment and healthy reserve levels. That reserve or general fund balance has been the subject of scrutiny by some district taxpayers who believe it is too high. District policy calls for the fund balance to be between 25-30 percent of operating expenditures in reserve.
According to the report, "the growing fund balance can be attributed in part to conservative budgeting, but also is the result of a deliberate effort to build up reserves in anticipation of future capital needs," namely River Crest Elementary and the new district administrative center. Moody's noted that the district has levied below the state' revenue cap in recent years which has meant "substantial revenue flexibility."
The district has an overall debt burden of 1.2 percent. The outstanding debt is $42.6 million.
For more information, contact the district Financial Service office at (715) 377-3704.