Fitch Ratings, San FranciscoKaren Ribble, +1-415-732-5611Scott Monroe, +1-415-732-5618Media Relations, New YorkCindy Stoller, +Copyright Business Wire 2009. Fitch’s code ofconduct, confidentiality, conflicts of interest, affiliate firewall, complianceand other relevant policies and procedures are also available from the ‘Code ofConduct’ section of this site. The city plans to utilize itsremaining authorization as future growth in AV allows it to maintain a stabletax rate. Fitch’s rating definitions and the terms of use of such ratings are available onthe agency’s public site, Published ratings, criteria andmethodologies are available from this site, at all times.

This issuance is the second of a $38 million totalauthorization approved by voters in November 2001. With growing AV and the new hotel, which opened recently, thecity is conservatively projecting its revenues to increase in fiscal 2010 by3.9% compared to estimated actual results for fiscal 2009. The city’s direct debt burden is low, reflecting its use of internal resourcesto finance a large portion of its capital plan. However, including overlappingentities, the city’s overall debt is above average at $6,488 per capita and 2.1%of market value. Revenues are diverse and enable thecity to take advantage of its wealth. In fiscal 2008, property taxes made up 33%of general fund resources, followed by sales taxes at 20%, and charges forservices at 12%.

For fiscal year ending 2008, the city’s general fund balance equaled$27.3 million, or 78% of ongoing spending, with similar levels achieved forseveral years. The unreserved portion also was high at 76% of ongoing spending.For fiscal 2009, the city projects roughly break-even results including atransfer out for infrastructure maintenance. Despite significanttransfers out of $5.5 million in fiscal 2007 for one-time uses and $14.3 millionin fiscal 2008 for OPEB and capital, the city still retained high fund balancelevels. Per capita money income is 226% and243% of the state and nation, respectively Financial operations have been consistently strong.

The city’s median home value iswell-above average, as are income levels. Unlike many other cities in California, Menlo Park’sassessed valuation (AV) is projected to increase a healthy 5.3% in fiscal 2010as a result of a new luxury hotel which opened in February as well as relativelysteady property values elsewhere in the city. This level is well below the San Francisco area’s 8.4%and California’s 10.6%. Softening in the economy hasresulted in an unemployment rate increasing to 5.8% in January 2009, up from alow 3.3% in January 2008. The city’s local employment opportunitiesand its proximity to the broad economic base of San Francisco and Silicon Valleyprovide residents with good job opportunities. City management isconservative and focused on retaining balanced operations and good pay as you gocapital spending, even as the city’s revenue growth slows. Menlo Park is advantageously located midway between San Francisco and San Jose,and adjacent to Stanford University.