The City Council on Tuesday signed off on giving the city’s treasurer greater freedom to invest in corporate bonds in an effort to preserve Glendale’s roughly $385-million portfolio until the market rebounds.

City Treasurer Ron Borucki had asked for the changes given that his office’s “meat and potatoes” option — federal bonds — is becoming more limited.

Glendale’s investment returns have been stifled by low interest rates and a still struggling economy, prompting the review of the city’s investment policy, according to a city report.

The hope is that increasing Glendale’s investment opportunities will help the city preserve its savings until the market rebounds.

“I think it makes sense,” said Mayor Frank Quintero, who has long called for the city to invest more in corporate bonds.

More than half of Glendale’s investment portfolio is tied up in federal agency bonds, such as those from Fannie Mae and Freddie Mac. But those two agencies, which focus on home mortgages, have been issuing fewer bonds as they realign their organizations, Borucki said.

“You’ve seen a tremendous falloff in availability,” he said, pointing out that where Fannie Mae and Freddie Mac once issued dozens of a day, they now put out three or four.

Referring to investments of more than a year in length, Borucki said Glendale needed to find more options.

Under the changes, the city can now hold more corporate bonds, up to 20% from 15%, and invest in those that take longer to mature. Glendale currently holds bonds in General Electric, Wells Fargo and AT&T, among others.

Corporate bonds make up the riskiest portion of the portfolio, but can also bring bigger returns.

In addition, the city can purchase its own debt and that of other local agencies, as well as those of California and the other states. A bright spot could be public utilities, as water projects are set to start around the state.

“We might just start by buying our own [bonds],” Borucki said.

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