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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

Sacramento County Grand Jury • 2024-2025

On the Brink of Bankruptcy: Isleton’s Failure to Govern

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Findings and Recommendations 9 findings

F1 Page 77
The Grand Jury finds the Isleton City Council repeatedly failed to timely adopt final budgets denying the City the necessary tool to track and assess its financial position. (R1)
Related Recommendations (1)
R1
Page 78
The Grand Jury recommends the City Council annually adopt a final budget, including a separate accounting for restricted funds, no later than June 30 for the coming fiscal year, beginning with Fiscal Year 2026-2027. (F1)
F2 Page 77
The Grand Jury finds the Isleton City Council violated state law and the City’s own municipal code by not ensuring the completion of an annual independent audit in a timely manner, which created an obstacle to securing grants and resulted in the loss of revenues for the city. (R2)
Related Recommendations (1)
R2
Page 78
The Grand Jury recommends the City Council ensure an independent annual audit of City operations and accounting occurs no later than 6 months following the end of the fiscal year, and that the City work with a licensed CPA with experience in municipal accounting, to conduct missing audits by March 30, 2026. (F2)
F3 Page 77
The Grand Jury finds the lack of oversight of the City Manager resulted in delayed discovery of the violation of state laws relating to misusing and comingling restricted funds. (R3) 78 | P a g e 2024-2025 Grand Jury Investigation Report On the Brink of Bankruptcy: Isleton’s Failure to Govern
Related Recommendations (1)
R3
Page 78
The Grand Jury recommends the City Council require the City Treasurer to ensure restricted funds are segregated (rather than co-mingled) and create and implement a plan with the City auditor to account for restricted funds, with progress reports every quarter, beginning no later than December 31, 2025. (F3)
F4 Page 78
The Grand Jury finds members of the City Council did not adequately monitor the City’s finances, thereby contributing to a state of serious indebtedness. (R4)
Related Recommendations (1)
R4
Page 78
The Grand Jury recommends the City Council continue to closely monitor the City’s financial position and assess whether bankruptcy or disincorporation is in the best 79 | P a g e 2024-2025 Grand Jury Investigation Report On the Brink of Bankruptcy: Isleton’s Failure to Govern interest of the residents of Isleton, and report out on their conclusion in a public meeting by December 31, 2025. (F4)
F5 Page 78
The Grand Jury finds the City Council failed to provide appropriate oversight of the City’s cannabis program to ensure collection of revenues and timely review of compliance with conditional use permits, thereby resulting in a loss of revenue to the City. (R5)
Related Recommendations (1)
R5
Page 79
The Grand Jury recommends the City Council enforce its ordinances related to cannabis enterprises, beginning no later than December 31, 2025. (F5)
F6 Page 78
The Grand Jury finds the City Council failed to provide appropriate oversight of the City Manager to ensure the City Manager carried out his duty to keep the Council continuously apprised of the financial state of the City, which resulted in the City Council making uninformed financial and operational decisions (R6)
Related Recommendations (1)
R6
Page 79
The Grand Jury recommends the City Council require the City Manager and Finance Director to keep Council continuously apprised of the financial state of the City by providing account balances, expenditures, debts, investments, and reports that compare budget to actual results, on a monthly basis, beginning no later than December 31, 2025. (F6)
F7 Page 78
The Grand Jury finds members of the City Council lack experience and training in city governance thereby denying the residents of Isleton of effective representation. (R7)
Related Recommendations (1)
R7
Page 79
The Grand Jury recommends each City Council member undergo comprehensive training on their duties and responsibilities as council members, and publicly provide verification of their completion of this training and understanding of their roles, by no later than December 31, 2025. (F7)
F8 Page 78
The Grand Jury finds the City Council did not follow its own Code of Conduct which created a public distrust in city officials and added stress to City staff members resulting in several leaving their positions. (R8)
Related Recommendations (1)
R8
Page 79
The Grand Jury recommends the City Manager, City Attorney, and City Council determine an appropriate course of action, including sanctions, for violations of the Code of Conduct and announce those actions at a public meeting, beginning no later than December 31, 2025. (F8).
F9 Page 78
The Grand Jury finds that City staff failed to maintain complete and accurate records of City finances and other City operations which hampered the City’s ability to complete audits, enforce ordinances, and make sound financial decisions. (R9)
Related Recommendations (1)
R9
Page 79
The Grand Jury recommends the Council direct the City Manager to ensure complete and proper recordkeeping for all city operations by December 31, 2025. (F9)