At this point the New York or New Orleans seems to have been replaced in infamy by a little city outside of Los Angeles called Bell. In the summer of 2010, Bell provided a shock to the nation of impropriety and evidence of corruption after a series of Pulitzer Prize winning articles by the Los Angeles Times. These articles, authored by Jeff Gottlieb, Ruben Vive among other staff reporters, uncovered highly compensated city officials and city council members, illegal taxation and questionable city operations. The story of Bell made headlines throughout national media, and left many feeling concerned about corruption and inappropriate activities in their own cities.
In the wake of the Bell story, the City of Montebello faced its own political storm as whispers of corruption spread by local media fueled resident’s heighted sense of concern. The concerns in Montebello were further stoked when it was reported that two bank accounts had been “discovered” that were “off the books” and evidence pointed to inappropriate payments to developers and other parties. “It’s another Bell,” could be heard among the murmur of the council chamber audiences.
Fast forward to the end of summer 2011 and things have changed dramatically. At the August 10, 2011 council meeting, a lengthy staff report combined with a near fifteen minute explanation by interim city manager Larry Kosmont of the Kosmont Companies (See Video), refuted all concerns of corruption and provided detailed evidence that mere clerical errors and process oversights created the “mystery bank account” situation. On a 4-0 vote (one council member was absent); the council authorized staff to close the two bank accounts in question and, in doing so, also closed the door on an unfortunate chapter in Montebello’s rich history.
There are important lessons to learn from this story. Running city governments – particularly in California where the rules are complex and the regional and state demands significant – require professional staff led by a professional manager with years of experience can make all the difference. Montebello experienced significant turnover in its city manager position over the last five years and the net result was that the management structure of the city suffered. Just as a private company would suffer if it changed out the CEO and senior managers once a year, so, too, did Montebello suffer.
Montebello is turning a corner and working through tough decisions but with an eye on the future. They have been greatly assisted by the years of management and experience that Larry Kosmont and David Biggs have brought to the City. City staffs’ work to research, document and answer questions about the bank accounts in questions demonstrates the positive role that effective and consistent city management can have in even the direst of situations.
There is also an economic cost to not having consistent city management in Montebello. As the City looks to achieve financing to weather a financial crunch brought about my fiscal management issues and a terrible economy, they have had to enter the market for a loan. With the management issues and reputation challenges the City faces – warranted or not – lenders are placing a premium on the loan it will make to the City, resulting in higher interest rates and larger interest payments. The general fund and taxpayers will suffer.
While the story of Bell is that an alleged corrupt city manager can do a lot of damage, the story of Montebello is that the mere lack of a consistent and effective city manager can lead to the appearance of corruption and damage to a city’s financial health. The take away for council members and residents: Find a good city manager and hang on to them.
Author Disclosure: My father-in-law spent 28 years as a city manager in California, several of my friends are city managers and I do consulting work for the California City Management Foundation.