In a striking departure from the usual crowing heard year after year at the annual Informe de Gobierno (state of municipaity report), a contrite Joaquín Huerta Barrios confessed he had little to brag about for his final year in office. Instead, his September 14 message on the highlighted his administration’s efforts to rescue the government from the brink of bankruptcy.
Acknowledging that the municipality’s finances remain precarious, he could only boast of a 50-percent reduction in the yearly deficit and the humble admission, “We will not leave behind a greater debt than what we received.”
In a speech delivered following a video review of the past 12 months of government activities, the mayor outlined various belt-tightening measures undertaken to cope with the financial crisis he inherited from his predecessors.
He noted that about half of Chapala’s annual spending budget goes towards covering expenditures for payroll, fuel for the government fleet, operation of the municipal clinic and the contract for disposal of the community’s solid wastes.
One initial line of attack was to slash salary expenses. Early on most city hall employees and top echelon officials agreed to a stop-gap measure involving temporary pay cuts unpaid furloughs. Since then the staff of 860 regular employees has been reduced to 789 through voluntarily resignations tied to severance packages that surpass the benefits dictated by law, representing more than 18 million pesos in budget savings.
Huerta’s administration has also chopped a three-million-peso monthly fuel bill by half and knocked 30 percent off the clinic’s expenses by substituting generic medications for brand name products.
After three full years of negotiations, the city is now on the verge of restructuring payment of its cumbersome debt burden. A major stumbling block was an outstanding bill of 56 million pesos owed to the National Water Commission for water extraction rights, dating back to 1998. The agency recently condoned the IOU, getting Chapala off the credit bureau list that had held up a favorable debt refinancing deal with Banobras.
Huerta expressed expectations that the incoming administration will continue exercising fiscal prudence to keep Chapala’s ship of state afloat.