The Guadalajara Reporter

Mayor advances in slashing payroll while other troubles brew

Chapala Mayor Joaquin Huerta appears to be making headway in trimming fat off the city’s spending budget and efforts to protect future administrations from the kind of financial pickle he inherited in taking office just over 10 months ago. But it appears likely he will be sweating out multiple troubles until his term ends two years hence. 

A key cost-cutting strategy has been aimed at reducing the municipality’s bloated payroll by enticing a significant number of employees to give up their jobs. In reviewing government history, the mayor’s financial and human resources officers discovered that the staff had exploded from 420 permanent employees in 2001 to 860 positions listed a year ago.

For example, a decade ago the Public Works department operated with a regular crew of 10 workers, hiring additional men on a temporary basis as needed. According to economic promotion chief Roberto Gutierrez, by the time Huerta administration took charge there were more than 100 permanent employees assigned to that area.

Gutierrez points an accusatory finger at former mayor Gerardo Degollado (2007-2009) for adding hundreds of names to the roll of base job-holders during his final months in office. He qualified the move as “an act of bad faith” prompted by Degollado’s rancor over losing city hall to an opposition party and his own electoral bid for a federal congressional seat. 

But Gutierrez likewise disdains Jesus Cabrera (2010-2012) for not taking steps to trim the payroll while he sat in the mayor’s chair.  Huerta, on the other hand, has taken the bull by the horns.

As a stop-gap measure aimed at stretching financial resources and protecting as many job positions as feasible, the incumbent has convinced most city hall employees and top echelon officials to accept temporary salary cuts or furloughs without pay. Garbage men are working their regular schedules with a deduction of two day’s pay every other week. Department heads are sacrificing one week’s worth of their monthly salaries, with no time off.  Some city councilors have adopted the same scheme. All police officers are exempt. 

Furthermore, in attempt to drastically cut salary expenditures for the long term the Huerta team has enticed some workers into resigning voluntarily their posts in exchange for severance packages that surpass the benefits dictated by law. 

The deals include a cash settlement equivalent to three-months salary,  all pending vacation pay and time-off,  and the standard year-end Aguinaldo bonus equal to 25 days in earnings, plus an extra “gratification” bonus, a three-to-five month extension on benefits for free medical service at the municipal clinic and a letter of recommendation.

While falling short of Huerta’s initial goal of eliminating 100 jobs, the tactic is starting to show results. To date 59 employees — including four department chiefs — have taken the bite, with 33 leaving public works and the rest bowing out from other areas. The mayor said he expects that additional resignations will be negotiated in due course.

An essential element in crafting the employee rollback plan is making resignation more attractive than outright dismissal. The purpose is to avoid saddling future administrations with the kind of onerous labor lawsuits that have become a major headache for Huerta.

 Costly nightmares

In recent months Jalisco’s Arbitration and Wage Scale Tribunal has filed more than 30 requests to suspend sitting mayors from their duties for failure to comply with its sentences to pay off municipal employees fired from their jobs. Among those cases, 14 pertain to the Chapala government. Ten of the unpaid court-ordered settlements stem from suits filed in the wake of Degollado’s exit. 

So far legislators have voted to refrain from executing seven suspension orders against Huerta, based on legal arguments that the city is too broke to meet its obligations. The remaining procedures are still under review.  Political observers suggest that congress won’t dare to punish Chapala’s commander-in-chief to avoid setting a precedent that could have tremendous impact on scores of other financially strapped municipalities.

Chapala is already in the hole for an estimated 10 to 12 million pesos for unpaid labor suits. And the amount keeps on snowballing as the weeks and months roll by since plaintiffs are entitled to collect on lost wages until they receive full payment.

But Chapala’s nightmare doesn’t end there.  The city is already facing liens and forced sale of property assets