Amador County – Amador County Supervisors last week approved a $152,000 loan to Ione last week to help pay back sales tax revenue the city erroneously was allocated by the state Board of Equalization.

According to the loan agreement, in September, Amador County received a letter from the state Board of Equalization saying “sales tax revenue owing to the county for the fourth quarter of 2008 and first quarter of 2009 was mistakenly paid to the city.”

Ione City Manager Jeff Butzlaff told Supervisors last week that this has been “kind of the catastrophic perfect storm for Ione,” including “when the state wants the return of money that they assured us was ours.” The “misallocation was considerably more than what we get for a year.” He said with the loan, “we will have some restored cash flow for the next five years.”

Butzlaff in a letter to Supervisors said the state Board of Equalization sought repayment of the full amount of the misallocation over two years, and the $19,000 quarterly payments would take up about 75 percent of Ione’s sales tax revenue. He said “in combination with all the other General Fund shortfalls this fiscal year, this could be organizationally devastating to the city.”

He requested a five-year county loan to repay the state Board of Equalization. Supervisors approved the loan, and the Ione City Council will consider it at its meeting today (Tuesday, Nov. 1).

Supervisors voiced support for Ione in its financial troubles, which include a $500,000 General Fund budget shortfall. The city is offering early retirement incentives, while considering drastic cuts in personnel and spending.

Supervisor Brian Oneto said: “I have no problem extending this to five years.” Supervisor Ted Novelli agreed, “especially with the closure of Preston.” Supervisor Richard Forster said we’re in as good or better shape than most counties, which makes the county able to help Ione.

Forster said Ione City Council meetings have been rough. He said “we will be coming to talk to you about the nexus study, so be nice to us.” The new nexus for a county jail was approved by Supervisors last week.

Supervisor Vice Chairman Louis Boitano said “we’re all in this together.”

The interest on the loan is 2 percent, and if a collection has to be sought in default, County Counsel Greg Gillott said the “post judgment” interest would be 10 percent.

Forster asked: If the city declared bankruptcy, would it relieve the city of paying it back? Gillott said he was not sure if it would excuse the debt.

Story by Jim Reece This email address is being protected from spambots. You need JavaScript enabled to view it.