SAN FRANCISCO – While some California cities are struggling from the lingering impact of the recession, Palo Alto, exemplifies the other side of the coin.
Moody’s Investors Service has affirmed its Aaa rating on an upcoming $20 million general obligation sale set for later this month by the city, located in the heart of Silicon Valley and the area’s ongoing technology boom.
“The city’s large and diverse tax base has not undergone any declines throughout the economic downturn and has increased in value over the past two fiscal years,” Moody’s said in the report Thursday.
In the most recent available reports, the city of 65,000 people 30 miles south of San Francisco had an unemployment rate of 3.8% in March compared to a rate of 9% in California in April, according to the U.S. Bureau of Labor.
Palo Alto had a median household income from 2007 to 2011 of $122,000 compared to the state median of $61,600 over the same time period, according to U.S. Census data.
The money raised from the bond sale will help fund the second and final phase of the expansion of the city’s main library and a community center that will be built around a courtyard featuring a preserved oak tree.
City voters overwhelmingly passed a $76 million bond measure in November 2008 to raise the money for the upgrades.
In June 2010, Palo Alto sold $58 million of GO bonds for the projects. The city council approved a tax levy of $17 per $100,000 of assessed valuation to pay debt service on the bonds.
Standard & Poor’s also rates those bonds AAA.
The new bonds will be funded by another tax levy of $7 per $100,000 of assessed valuation.
A city ordinance also requires that 1% of all construction costs be used for public art.