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Council hears debt and sewer cash-flow warning as staff pursues county loan talks to avoid bankruptcy
Summary
Staff reported an additional ~$800,000 in certificate debt and said the city is pursuing talks with Sacramento County about bridge/refinance loans to keep the city from needing to file bankruptcy; sewer fund shows a projected negative balance next month and staff plans further budget and collection steps.
City staff told the council the list of outstanding obligations presented earlier had been incomplete and included an additional roughly $800,000 in certificates of participation that are not currently in default but are being auto-drafted from city accounts. Staff explained those payments pull from sewer accounts and that they are exploring options with Sacramento County to refinance or provide bridge loan assistance to avoid bankruptcy.
Finance staff said the sewer fund hits a negative position in the near term unless stopgap measures are put in place and noted a $99,000 bond reserve refill is due; staff is preparing a budget and cash-flow plan for March, and discussed selling surplus equipment and pursuing county assistance. During public comment and council discussion, residents urged a focus on fixing the sewer plant and improving collections; staff said it is pursuing county billing for sewer and is working on past-due accounts and potential lien enforcement.
Staff characterized the county talks as a key stopgap while other long-term fixes and budget controls are implemented. The council and staff emphasized the need to tighten spending and pursue revenue/collection improvements while negotiating with potential lenders and county officials.
