The city’s investment portfolio sank to $372 million, which is $20 million less compared to last year, according to a report Manoukian gave to the City Council Tuesday night.
Interest earnings totaled just $3.2 million for the fiscal year ending June 30 — a $1.1-million drop compared to the previous fiscal year, according to a city report.
On top of that, the treasury took even more of a nose-dive last year as Glendale officials had to hand over tens of millions of dollars once earmarked for economic development to the state as Sacramento lawmakers ended a statewide program that permitted cities to reap extra property taxes in designated redevelopment areas.
The incrementally higher property taxes, which increase as development improves blighted regions, now gets divvied out to other agencies, including Glendale Community College and the Glendale Unified School District.
Manoukian, a former councilman, was elected to the City Treasurer post in May, and Tuesday marked his first report to his former colleagues on the dais.
A notable change in the city’s portfolio as of this past June was the increase of corporate notes, which are bonds issued by corporations.
Corporate notes made up about 20% of the city’s portfolio, a jump from 15% the prior year.
It’s long been city policy to keep investment in corporate notes low because officials have preferred safer governmental-type investments, such as treasury bills.
“It’s a very conservative portfolio. It always has been,” said City Manager Scott Ochoa.
But Manoukian encouraged the council to raise a 20% cap on corporate notes to 25% or 30%, a change welcomed by Councilman Frank Quintero, who has long called for more corporate investment.
“We should change that policy and have more of our money in corporate paper,” Quintero said. “We’re just not doing ourselves a favor.”
Glendale invests in corporate notes from such companies as General Electric Capital Corp, J.P. Morgan Chase and IBM Corporations, according to city records.
Manoukian said he would return to the council with a proposal to tweak the investment policy.