Revealing an accumulated public debt in excess of 120 million pesos, Chapala Mayor Joaquin Huerta has acknowledged that the municipality’s financial status is not a pretty picture.
The depressing news came as Huerta made good on his pledge to issue a financial status report at his first city council meeting.
A breakdown of the numbers shows city hall in the red to the tune of 100,903,454 pesos. This includes 60 million owed to Banca Commercial Bansi for a loan contracted during the last administration, plus another 24,451,429 outstanding on a Banobras credit for public works projects, a calculated 13 million to pay off labor claims and other lawsuits gained against the government, assorted bills due to suppliers totaling 3,390,807 and 61,217 accrued on government matching fund programs.
Added to that is the 22,766,492-peso debt held by Simapa, the municipality’s decentralized water and sewage service agency. The biggest chunk of that figure involves nearly 12 million pesos for a long-term Banaobras credit to be paid off in 2017. Other heavy Simapa obligations include slightly more than three million owed on National Water Commission rights, a similar amount due to the State Water Commission for operation of sewage water treatment facilities, and more than a million and a half in outstanding Federal Electricity Commission (CFE) bills.
While Huerta promised to run a transparent government as he took the oath of office on September 30, he was called to task the very next day by former mayor and election-rival-turned-alderman Gerardo Degollado for not spelling out the debt issue at the initial council session. Ironically, Huerta’s report shows that the bulk of the debt built up during Degollado’s 2007-2009 government.
According to the comparative analysis of debt increments drawn up by incumbent city treasurer Jose Guadalupe Dueñas, the 2001-2003 administration led by Alejandro Aguirre left a debt of around 10.1 million pesos, which grew by 28 percent to just over 13 million under Arturo Gutierrez (2004-2006). In Degollado’s term the total skyrocketed to 99.86 million pesos – a jump of nearly 667 percent. In contrast, the debt rose by just under 24 percent during the 2010-2012 Jesus Cabrera administration.
Dueñas, a hold-over from the previous administration in the treasury office, explained that together with Cabrera he lined up the Bansi bank loan to help pay off some of the financial commitments generated by their predecessors, including a number of substantial legal claims. Among them were labor suits filed by Degollado and members of his cabinet who were unable to collect Christmas bonuses and half of their December salaries before leaving office.
Huerta says his two-fold approach to healing the financial wound will be to reduce spending and generate greater income.
“To cut corners we’ll take a hard look at the biggest expenditures and attack that angle first,” Huerta declared.
A key strategy will be keeping a tight check on payroll expenses. City hall employees will be held to a high standard of efficiency and public service in order to keep their jobs. The mayor also plans to restructure administrative areas related to urban planning, public works and social services to get the most bang for the buck.
Another focal point will be implementing programs to reduce the cost of public services, starting with the government’s 500,000-peso monthly bill for solid waste disposal.
Huerta stressed that public security is the one area that will not be subject to penny-pinching. “This is our top priority. A safe community generates happiness, well-being and prosperity.” He aims to build up the local police force, increasing the current staff of 130 to 160 officers, with all certified by the state-operated confidence control system.
On the other hand, to help fill the coffers, the government will crack down on local tax evasion, especially in regard to collections for delinquent and off-book accounts on property taxes and Simapa fees.
Huerta is also intent on attracting new private investors whose businesses can help drive up government income while creating jobs that benefit the community as a whole.
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