Cash-strapped Montebello receives loan

For months, officials in Montebello have worried that they might run out of cash by the fall, or be forced to make drastic cuts to stay in business.

But on Thursday, officials in the beleaguered city announced that it had gotten a $2.5-million loan as it seeks to get back on firm financial footing.

The loan must be paid back by June, said interim City Manager Larry Kosmont.

Kosmont said the city is borrowing at an interest rate of 4.85% -- higher than he would have liked, but a rate that reflects investors’ worries about a city that has been the subject of a drumbeat of negative headlines about its financial stewardship.

The city has also been the subject of seven separate audits over the last year, including several from the state controller’s office that found the city mishandled millions of dollars.

Kosmont, who said he plans to step down from his temporary post in December, said the loan is  good news, in that it will help the city as it seeks to hire a permanent city manager.

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-- Jessica Garrison

Photo: A view of the city of Montebello. Credit: Irfan Khan / Los Angeles Times