Isleton currently has $4.7 million in debt owed to multiple creditors, according to the letter sent to Sacramento County officials, down from $5.1 million in debt earlier this year.
Acting Finance Director Jessica Bigby told CBS Sacramento last month that the loan request will not fix all of the city's financial issues, but if approved, it could provide financial support in the short term, quickly.The loan request includes a plan to repay the county over 10 years with interest after an initial 6-month repayment deferment. The requested money would go towards repaying a $500,000 bridge loan from a private lender and the remaining money would go towards debts to the state Employment Development Department and Small Cities Organized Risk Effort. As part of the request, the city noted loan payments, if not made, would be deducted from city property tax revenues.
The staff report notes that the loan would provide immediate cash flow, but would not address the "larger structural issue that a city of Isleton's size is unlikely to generate sufficient tax revenue to sustainably fund city administration, debt service, and service delivery." The Mayor of Isleton, David Kent, told CBS Sacramento on Tuesday he hopes the county makes a decision to keep Isleton's history alive -- as the next option is, potentially, bankruptcy. "Is Isleton's valuation able to be supported by its tax base? And the answer is resoundingly, yes. So, you can start from there. Now, you're going to have a legacy of payment plans, you're going to have a legacy of obligations and interests, that all has to be managed. But that is absolutely not inconceivable," said Kent. Sacramento County budget hearings begin on Wednesday and are scheduled through the end of the week.
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