Montebello has hired Los Angeles economic development consultant Larry Kosmont and his firm to manage the financially troubled city.

The Montebello City Council late Wednesday voted 4-1 to hire Kosmont’s consulting company on a six-month, $150,000 contract. Kosmont will concentrate on a financial workout plan for the city, while another consultant at his company, David Biggs, will run the operations of the city.

Both Biggs and Kosmont are former city managers; they replace former interim city manager Peter Cosentini, who announced his resignation last month amid deepening financial turmoil for the San Gabriel Valley city.

In making his resignation announcement, Cosentini said the city faces possible insolvency by the end of this year.

Last week, Moody’s Investor Service downgraded Montebello’s bonds to junk status after revelations that the city’s general fund faces an immediate $1.2 million budget deficit and owes $17 million to the redevelopment agency.

Last month, state Controller John Chiang announced his office would conduct an audit of Montebello’s books after city officials had announced they had found two secret bank accounts containing hundreds of thousands of dollars in city money. Los Angeles County District Attorney Steve Cooley has launched an investigation into how the money ended up in the accounts.

Also last month, the federal Department of Housing and Urban Development asked the city to return $1.3 million in grant money the agency alleges was improperly spent.

Kosmont, 59, is best known in business circles as the creator of the annual Cost of Doing Business Survey, which compares the cost of city taxes, utilities and other local business costs in more than 400 cities in all 50 states. Since 1986, he has run the Kosmont Companies, providing economic development consulting services to corporate and municipal clients.

In the early 1980s, Kosmont served as city manager in Bell Gardens and Burbank. He also served two terms as president of the City Managers Association of Southeast Los Angeles County. Kosmont had previously served in economic development management positions in Santa Monica and Seal Beach.

Biggs recently served four months as city manager in Tustin in Orange County until this past March, when the City Council there terminated his contract without explanation. Prior to that, he was city manager of Morgan Hill in Northern California and assistant city manager in Redondo Beach.