The Delta hamlet of Isleton with an outsized debt is nearing the sale of $1 million in bonds to pay creditors.
Tonight two council members are expected to ask that the city look at alternatives to bonds.
That would delay, once again, payment of about $950,000 in operating debts amassed mainly in the mid-2000s, said City Manager Bruce Pope.
Since alternatives to a bond sale are not viable, Pope wrote in a report to the council, that would leave bankruptcy as the next option.
Pope was hired in early 2007 to pull the city out of its financial morass and, in January, received the council's 4-1 approval to pursue the bond sale.
He warned that if the city backs away now, Isleton could be held in legal contempt. A law firm already has won a $325,000 judgment against the city for past legal services.
"Creditors are basically reaching the end of their patience," Pope wrote in a report to the council.
"They expect to be paid now. The city needs to pay off all of the outstanding debt or face numerous lawsuits from the creditors."
Councilman Jim Corsaut, the lone member to oppose the bond sale idea in January, wants a public workshop on the matter.
"I'm just trying to come up with other options other than bankruptcy," Corsaut said, adding that he believes bankruptcy is on the horizon if the sale of bonds falls through.
"We've been promised those bonds for along time," he said. "Before that, it was a loan that was going to be taken out. That never materialized."
Another member, Vice Mayor Michael Gomez, is listed on tonight's council agenda as seeking discussion and possible action "on what options we have as a city regarding financing/debt."
Gomez could not be reached for comment.
Mayor Gene Resler on Tuesday said this is not the time to change course.
"There are no other options," Resler said.
Pope's report says the bond sale agreement will be signed Sept. 17 and the city will receive the funds on Sept. 24.
Call The Bee's Loretta Kalb, (916) 321-1073.
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