The city of Montebello is continuing to take steps toward securing its financial stability and Interim City Manager Larry Kosmont is stressing the importance of a $3.9 million private loan as a way to right the city’s fiscal ship. According to Kosmont, without that loan, the cash-strapped municipality will be forced to implement some major cuts in the fall and payroll costs will simply be unaffordable. In light of the loan’s importance, the council voted to approve the course of action. We relayed back in June that Kosmont had unveiled a plan entitled “Montebello's Road to Financial Recovery," and the loan was named as a solution. The Whittier Daily News reports:
“Montebello will have to pay $350,000 in interest and fees for borrowing the money for nine months, Kosmont said. The loan will have to be fully repaid by June, Kosmont said. The city will begin soliciting lenders on Sept. 7, Kosmont said. He said he hopes to secure a loan by Sept. 15. Kosmont said he expects Montebello to pay about 5 percent interest since the city isn't financially stable enough to secure a public loan at 2percent.”
We’ve relayed previously that the Los Angeles County District Attorney’s Office has also been investigating the city over” off the books" city bank accounts and the State Controller’s office is conducting a "Bell-type" audit to investigate financial irregularities. In addition, the FBI and federal prosecutors are investigation the city over allegations of misuse of funds and fraud involving federal housing money.