Isleton resident Jean Yokotobi is not disillusioned with the financial challenges her city, by far the smallest in Sacramento county, is facing.
Yokotobi, 80, has lived in the town of about 800 people for more than two decades. She lives in and owns a building on the town’s main drag. Under her apartment she rents out the commercial space to The McBoodery, the town’s only sandwich shop.
A college boyfriend introduced Yokotobi to Isleton in the 1960s when she was a student at San Francisco State. Though the relationship fizzled out, her romance with Isleton didn’t.
“I really loved Isleton from the first time I saw it, and it was one of those beautiful spring days,” Yokotobi said. “There were lots of boats in the water and there were pear orchards all over. Everything was green.”
Isleton, California in 2024.Alysha Beck/UC Davis
In its prime, the tiny Delta community was home to around 1,500 Japanese and Chinese immigrants who came to work at asparagus canneries in the early 1900s.
Since then, the city has struggled. There is no major industry in Isleton anymore. A 2023 study by the Rural Community Assistance Corporation found the average resident was making around $60,000 a year.
Yokotobi admits the town’s heyday has been over for as long as she can remember. Over the years, she’s also witnessed questionable decisions being made at city hall.
“Isleton has always been mismanaged,” Yokotobi said. “They never did have money.”
According to a Sacramento Grand Jury report from June 2025, decades of financial mismanagement have coalesced into a situation that could harm residents. Past grand jury reports have also probed the city’s financial problems.
Things hit a boiling point in August, when Interim City Manager Jon Kennedy wrote a letter to the Sacramento County Board of Supervisors explaining the situation and asking for $800,000 to help deal with the city’s most pressing debts.
“This council and the new management in place are fervently committed to ensuring fiscal stability for the current residents and the generations of residents to come,” Kennedy wrote. “We believe in the viability of our city and hope you will invest in that future with us.”
Isleton, Sacramento's smallest municipality, sits along Highway 160 and is home to about 800 residents. It's main drag consists of a few restaurants, a tap room and a laundromat among other local businesses.Courtesy of the City of Isleton
County supervisors denied the loan on the basis of Isleton’s sordid financial history, unsure the little city would ever pay them back.
Since then, Kennedy told CapRadio that Iselton has been exploring different options with the county as a way to deal with its financial crisis – which is currently at $4.6 million in debt.
According to their adopted 2025-2026 budget, Isleton’s operating revenue for the entire year is approximately $1.6 million.
Discussions have mainly been around filing for bankruptcy or even terminating its status as a city. Iselton was incorporated in 1923.
An inability to pay those debts could mean the property owners of Isleton will be responsible for what the city can’t pay. According to Kennedy, that could amount to around $400 to $500 extra in property taxes for each of the next 20 years.
Bankruptcy
At an October 22 special meeting, Isleton city staff laid out the financial situation to the city council. The meeting was attended by around 10 residents, the city’s single full-time public works employee, and a few firefighters who are now volunteers after every position except one was laid off earlier this year.
One option presented to attendees was Chapter 9 Bankruptcy, which would allow Isleton to remain a municipality and restructure the debts under federal court protection.
Interim Finance Director Jessica Bigby, who lives in Redding, was called in to help from outside the community with firm Prentice Long.
She told CapRadio this option doesn’t necessarily make sense because the city is both too broke to file for bankruptcy and doesn’t have enough records to provide. Bigby was contracted to help rebuild the city’s records.
“To go into bankruptcy, you really need to kind of have all of your ducks in a row, and Isleton did not,” she said. “We're still struggling to get to the point where we would even be able to kind of enter bankruptcy court and have all the available data.”
The city’s October staff report indicates that Isleton would need to provide a summary of major debts, a more complete financial picture and a plan forward.
Bigby said they’re getting there.
“When we first came on it was all just triage, everything was on fire,” she said. “I think right now we have a really good understanding of the amount, which when we came on we did not.”
Disincorporation
Another option on the table is disincorporation, meaning the century-old community would lose its status as a city and give control to Sacramento County. Isleton city staff said at the meeting that this option would need to come to a vote of the residents, and may put residents on the hook for the debt.
Kennedy, the city’s interim manager, told CapRadio this would be an unlikely option, because property owners would likely not support taxing themselves.
“You go bankrupt or dissolve [[disincorporate]], those debts don’t go away. The residents own those debts.” he said. “That’s not a fair thing to do.”
Disincorporation is also a rarity in city government. Sacramento County Supervisor Pat Hume, who represents Isleton on the county board, said there’s no blueprint for how that would look.
“No city in California has disincorporated since the early 1970s,” Hume said. “So there's literally no one alive right now that has ever been involved in the disincorporation of a city.”
The last city to disincorporate in California was Cabazon in Riverside County in 1972.
Downtown Isleton outside of McBoodery's Sandwich Shop on October 2, 2025, the city's only dedicated sandwich shop in a building owned by Jean Yokotobi.Riley Palmer/CapRadio
At the October community meeting, Bigby told attendees Isleton is also not in the financial position to end its city status.. She clarified that disincorporation isn’t typically used to help a city get out of financial trouble.
“Even if we wanted to do that, we would have to figure out the debt first,” Bigby said. “... We have to fix our own problems.”
Current path forward
After options were laid out, the Isleton City Council ultimately directed the staff to begin looking at city-owned properties to sell off, as a way to help pay back what has been borrowed and help with daily operations.
The council agreed to look at properties such as the town’s boat dock, its community center and the old police station.
“It would break my heart to sell the dock, but if it’s going to save the city …” Vice Mayor Cara Pellegrini said.
City staff told CapRadio after the meeting that outside of selling city assets, they are focused on rebuilding financial records and getting them ready for audit. This would allow the city to qualify for grants and outside funding that would go towards failing infrastructure, such as the sewer system.
Longtime Isleton resident Yokotobi said she stopped going to council meetings like the one in October years ago, finding it sad to watch. Regardless of the outcome, she wants what she believes the citizens are owed.
“Isleton, it's really a city I love. I’ve loved it since 1965. Still, I have a passion for it,” she added. “But my whole thing is I would like to have some services versus none.”
Follow us for more stories like this
CapRadio provides a trusted source of news because of you. As a nonprofit organization, donations from people like you sustain the journalism that allows us to discover stories that are important to our audience. If you believe in what we do and support our mission, please donate today.
Donate Today
