News Release News Release The City of Palo Alto
Communications Department
650-329-2607
250 Hamilton Ave
Palo Alto, CA 94301

6/4/2013

FOR IMMEDIATE RELEASE
PRESS RELEASE 06/03/2013
Subject :

Triple A Bond Rating Awarded by S&P and Moody's for Palo Alto Second Series (2013A) Library and Community Center Capital Improv
Contact : Lalo Perez, Director of Administrative Services    650-329-2675
Palo Alto, CA – The City of Palo Alto announced that both Standard and Poor's (S&P) and Moody's awarded their highest credit ratings, Triple A, to the second series General Obligation Bonds for planned improvements to the Main Library. This second series of Measure N Bonds is slated for sale in June 2013 in an amount not to exceed $20.7 million. The Triple A rating on the first series of Measure N bonds for $55.3 million for work on the Mitchell Park and Downtown libraries and Mitchell Park community center was re-affirmed by the rating agencies. The City voters authorized a maximum issuance amount of $76 million.

S&P cited the following factors in conferring the Triple A rating:

  • Diverse and mature economic base
  • High wealth and income levels and very high home values
  • Continued, very strong financial operations and policies; and
  • Manageable overall debt levels 
"We are extremely pleased that both S&P and Moody's have reaffirmed the highest credit worthiness of our capital improvement bonds, which is a reflection of stable fiscal management and city economic values," said City Manager James Keene. "This means we can obtain construction funds for our Main Library renovations at a lower cost to the community." The Downtown library renovation is completed, Mitchell Park library and community center is under construction, and the Main library renovation is slated to begin next month.  

Additional factors considered by S&P in their analysis included the Stanford Shopping Center that anchors a vibrant retail environment; strong median household effective buying income; a relatively low unemployment rate in the City; strong General Fund reserves, and actions taken by the City to balance anticipated budget gaps caused by declining revenues during the dramatic economic downturn.   

Moody’s analysis echoes that of S&P. It cites “the city’s large and diverse tax base that has not undergone any declines throughout the economic downturn…; a strong resident socioeconomic profile…; a healthy balance sheet characterized by sound reserves…and a strong ending cash position; moderate general obligation debt and lease-obligation burden…; and a relatively small OPEB contribution as a percentage of general fund operating expenditures.”

The above ratings are critical in achieving the lowest possible interest costs for property owners.  There are less than 200 AAA bond rated cities across the country, and relatively few in California. In addition to Palo Alto, other cities include Beverly Hills, Manhattan Beach, Menlo Park, Newport Beach, Mountain View, Santa Monica, Saratoga and Sunnyvale.   

These ratings can be reviewed in more detail here: S&P AAA Rating Review and Moody's Rating Review of Library GO Bonds.



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