A savings account that contributes millions of dollars to finance city services each year lost more than a quarter of its value in the past 12 months and likely will take years to recover.
The savings account is a trust fund set up about a decade ago with proceeds from the sale of the old city-owned Anchorage Telephone Utility. It has grown and shrunk over the years in rhythm with the general economy, from almost $130 million in 1999 to as little as $112 million in 2002.
The fund had swollen to $141 million by the end of 2007, and was still $131 million six months ago. But then the economy started its nosedive.
The fund is projected to end this year at $96.9 million after paying a $6.6 million "dividend" to the city general fund.
The trust fund – just like the Alaska Permanent Fund and most individual retirement accounts – has been savaged by the mortgage and credit crisis and the ensuing Wall Street meltdown. About half the fund was invested in domestic stocks and another 15 percent in international stocks, with some 35 percent in bonds, U.S. treasury and agency notes, and 5 percent in real estate.
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