Sacramento County staff rejects loan request to save Isleton from bankruptcy

In an urgent attempt to avert bankruptcy, the City of Isleton, located in California, submitted a loan request of $800,000 to Sacramento County. This request came after years of financial struggles, with the city reporting $4.7 million in debt owed to various creditors. Initially, the city faced $5.1 million in debt earlier in the year. Acting Finance Director Jessica Bigby explained that while the loan would not be a complete solution to their financial issues, it could provide immediate cash flow and support. Isleton's financial troubles have led to mismanagement, including a lack of independent audits since the 2020-2021 fiscal year, and delays in adopting timely budgets. With the county staff's report detailing reasons against approving the loan, such as Isleton's inadequate tax revenue to sustain its administration costs and additional debts of approximately $600,000 owed to the county for unpaid services, officials remain skeptical. The loan would require repayment within ten years at interest, with an initial six-month deferment. In light of these constraints, county staff emphasized that while immediate cash is essential, it wouldn't address the larger problems, leaving Isleton in a precarious financial position. Isleton's Mayor David Kent expresses hope that the county will support their request, citing that Isleton's economic health could potentially be revitalized. He pointed out that managing previous obligations and establishing a financial legacy would be crucial for the city's future. This financial discourse takes place amid budget hearings initiated by the Sacramento County Board of Supervisors, which started on Wednesday and are scheduled to continue through the week.