By Ted AYALA
The economic malaise gripping the nation is further corroding the coffers of Glendale. On Tuesday, City Council was presented with hard news: an $11 million drop in the value of its investment portfolio.
“It’s not getting any easier out there,” said Ron Barucki, city treasurer, during his quarterly investment review. “Consistent with the last 13 quarters the percentages are down.”
The rate of return on the city’s investment portfolio during the first nine months of the fiscal year was 1.11%. Shortfalls in property taxes as well as the end of redevelopment monies caused the $11 million gap in the portfolio.
Barucki also noted that financial problems in the global arena were becoming of local concern.
“Europe once again is front-and-center,” Barucki said. “Investors are becoming more concerned than normal about events [in Europe] and it isn’t all about Greece. Standard & Poor’s cut Spain’s credit rating to three levels above junk and that puts Spain at the same level as Italy. Spain has reentered its second recession since 2009 and joins the United Kingdom as well as six other [European Union] nations in recession.”
The treasurer also added that the recent ascension to the French presidency by François Hollande and Greece’s inability to form a cabinet, which will lead to early elections, have been further shaking investors.
“Europe is a mess financially,” he said. “As Europe is our largest export customer this means that the U.S. economy will either grow with it – or it won’t grow and America will tip-toe around another recession itself.
“What we have truly is the making of a global marketplace where actions in Europe will be felt here in Glendale.”