Isleton declared financial ruin with $4 million in debt. Where is it now?
The city of Isleton, once on the verge of filing for bankruptcy, is slowly recovering from financial ruin, government officials reported during a Tuesday evening City Council meeting.
In January, Isleton found itself in $4 million in debt, resulting in the layoff of city staff and its entire paid fire department. Since then, the city has paid $15,000 to the Small Cities Organized Risk Effort monthly to adhere to its 90-Day Notice of Intent to Terminate board membership, according to the city’s staff report. Because Isleton was operating beyond its capabilities with “excessive staffing and expenses depleting reserves and accumulating significant debt,” the city has been forced to make drastic reductions, a fiscal stabilization report stated. Isleton did not maintain previous fiscal and operational records of these expenses, the report added.
Isleton is the smallest city in Sacramento County with fewer than 1,000 residents located near the San Joaquin River Delta.
Last year, Isleton took out a 10-month forbearance loan to repay its debt, the fiscal report added. The city has requested a refinancing package to pay off its outstanding balance to the Small Cities Organized Risk Effort, which has been hired to assist Isleton with its debt.
Isleton has paid a total of $141,894.75 to U.S. Bank, according to a fiscal report released in March. Paying off this debt will remove the risk of the city going into default for its bonds.
Jessica Bigby, a certified public accountant hired to assist Isleton, wrote in March that the city is still stabilizing its debts. She anticipated, however, that operations will shift to “debt repayment and financial record rebuilding.”
“Regardless of the stage, the city must operate as leanly and efficiently as possible, prioritize sound fiscal decisions, and work to restore trust and consistency with its partners and community members,” Bigby wrote.
The city now has a “lean, partially furloughed staff,” the report stated and a volunteer fire department. Isleton is also transitioning its sewer billing to Sacramento County because those capabilities are not within the city’s current model, the fiscal report stated.
Isleton residents remain anxious about the city’s debts.
On Tuesday night, resident Joan Burke expressed concerns about the city’s handling of its finances and alleged Isleton was “missing accurate descriptions of jobs” for administrative positions, such as a city clerk.
“Quite quickly in the next few weeks, I would like town hall meetings. Like just a couple of them, where we as a community talk about what’s in here so that we’re on the same page related to the city manager position,” Burke said.
In response to Burke’s comment, the City Manager Jon Kennedy told the resident the comment was not related to an agenda topic.
Proposed meeting change
During Tuesday’s meeting, council members discussed reducing scheduled meetings from twice a month to monthly. While most of the council was in favor, a majority of residents in public comment opposed the idea.
Lori Kent, an Isleton resident, said the meetings are for the public. With City Hall closed and “little access” to the city’s elected officials, she said she was concerned about limiting meetings, especially with Isleton’s financial problems.
“This is when the staff comes before the public and accounts for what they’re doing with our elected officials, with us all observing and participating,” Kent said. “Some of the participation is very contentious, and I don’t like a lot of it and it’s painful, but it’s an important part of American government.”
Kennedy defended the council’s idea.
“These meetings are not the public’s meetings,” said Kennedy. “The meeting is not the mayor’s meeting. The meeting is for us to take action on the business related to running this governmental agency.”
Kennedy said if residents are unable to reach council members, they’re “just not trying.” He added that he didn’t understand the concern about “limiting exposure” to himself and city officials by canceling meetings.
“We’re conflating topics. You don’t have a limited ability to contact any one of these council members ... you can still email us,” Kennedy said. “You can contact us. I have been contacted every single day since January 15.”
“This isn’t the only place that you can have discussions and the public doesn’t set agenda items,” he added.
This story was originally published April 9, 2025 at 1:06 PM.
