Treasurer:

CITY HALL — Glendale’s $440-million investment portfolio continues to ride out the storm on Wall Street with top-rated holdings in mostly federally backed institutions, according to the city’s first-quarter report.

While the portfolio ended the period between July and Sept. 30 down by $29 million, $22 million was attributed to the city’s first-ever lump-sum payment to the state Public Employees Retirement System.

Paying the annual assessment up front rather than monthly was expected to save the city roughly $840,000, city officials said.

City Treasurer Ron Borucki attributed the rest of the $29-million fall to the ebbs and flows of managing hundreds of millions of dollars on the open market, and said it did not necessarily mean a “loss” for what is an otherwise “safe, sound and liquid” portfolio.

Borucki is scheduled to deliver the quarterly report to the City Council tonight, his first major address since announcing his reelection campaign two weeks ago.

After nearly 10 years in the seat, Borucki had planned to retire when his term expired next year. But then the first fiscal quarter happened.

Over the summer, entire banking institutions failed, while major investment firms were swallowed up, pushing the federal government to intervene in unprecedented ways.

This series of events prompted Borucki to announce his reelection bid two weeks ago, saying he was uncomfortable with turning the portfolio over to an inexperienced challenger during such a volatile time.

Now, with a $700-billion federal bailout package beginning to take hold, things are somewhat calmer, but Borucki said continued vigilance was needed.

“It’s a long way from normalcy, but there’s movement,” he said. “As long as we continue on this pace, investor confidence will follow.”

The investment portfolio is fairly autonomous from the city’s general fund, which is in a much weaker position, city officials said.

After cutting $9.9 million from the city budget in June, the general fund is facing another round of reductions next year.

A slowing economy has constricted revenue streams — such as car sales and permit fees — while demand for public services has held strong, forcing the city to evaluate the impact of various “reduction scenarios,” Finance Director Bob Elliot said.

While exact sales tax figures and budget gap projections haven’t been finalized, Elliot said City Hall would certainly have to engage in some level of belt tightening.

“I don’t think that’s a surprise to anybody,” he said.

Only this time around, budget study sessions on how to reduce spending will likely occur sometime in February, which would put already politically tense debates in the thick of a three-incumbent City Council election season.

It would also be at about the same time that the Community Development Block Grant Advisory Committee evaluates nonprofit social service providers and their applications for a smaller pot of federal funds.

 JASON WELLS covers City Hall. He may be reached at (818) 637-3235 or by e-mail at jason.wells@latimes.com.