Photo: John Morrow of Roseville delivers his IOU to the Sacramento treasurer's office.

John Morrow doesn’t blame the state government for paying him with an IOU that was one year late.

Morrow, of Roseville, took the state’s delays in stride as he submitted his IOU for $1,200 to the Sacramento treasurer’s office Friday morning.

“I understand the situation,” he said. “It’s tough out there nowadays."

Morrow was one of several individuals and representatives of businesses who did business Friday morning at the city treasurer’s office. The office is buying $10 million in IOUs that were distributed to individuals, businesses and non-profit organizations by the state government. By Friday morning, the city had taken in $3.1 million in IOUs.

The treasurer’s office pays the face value of the IOU after taking out a $2 transaction fee. The city will be in a good position because the IOUs have a 3.75 percent annual interest rate, according to City Treasurer Russ Fehr.

Morrow, who owns land in the community of Foresthill, received his IOU as a reimbursement from the state. State workers sprayed his property as fire-protection measure, and he picked up the bill. The state paid him back with an IOU a year after the expense, he said.

While the program is intended for city residents, Morrow was able to work with the city treasurer’s office. Fehr said the office will accept the IOUs from residents outside of Sacramento if there is a connection with the city of Sacramento.

The program will continue to operate until it reaches the $10 million threshold, said Sacramento Treasury Analyst Christopher Tjie.

The state, which is still issuing IOUs, doesn’t have a real date for when it will stop sending out the IOUs, noted John Colville, a senior investment officer for the treasurer’s office. IOUs are scheduled to be redeemed by the state Oct. 2.

The city’s program began July 23, and hasn’t had “a single operational error since we started,” Colville said.

Kathleen Haley is a staff reporter for The Sacramento Press.