Council says yes to $40M

CITY HALL — City Treasurer Ron Borucki got an additional $40 million Tuesday to invest in a state fund that he said should provide a greater return than markets on Wall Street.

Administered by California Treasurer Bill Lockyer and protected from raids by a cash-hungry state Legislature, the Local Agency Investment Fund was worth an estimated $24.3 billion as of February with yields that were 1.4% higher than shorter-term money-market funds, where cities typically invest.

Moving the money from those markets into the state investment pool could yield an additional $46,000 in interest per month for the city, Borucki said.

“That’s huge in a compressed marketplace,” he told the council Tuesday.

Glendale is already invested in the fund to the tune of $80 million through the city and its Redevelopment Agency. Due to state financing rules, the only way for the city to invest an additional $40 million was to revive the long-dormant Financing Authority, a legal entity staffed by the City Council that was set up in 1999 to fund the new police station.

Acting in its dual finance capacity Tuesday, the council unanimously approved the appropriation, but only after getting assurances that the money would be safe from legislative budget raids in Sacramento or nefarious scheming.

“I don’t want to find out that there’s a Bernie Madoff at the top who’s taking local municipalities for a ride,” Councilman Ara Najarian said.

Borucki assured the council that the money was fortified by federal and state laws, and that he was “very comfortable that the money we put in there, we will get back.”