San Luis RC left with no money to pay bills, employees: treasurer

SAN LUIS RIO COLORADO, Son. — Taking office as mayor last month, Leonardo Guillen discovered the city had no money in its budget to pay its employees' wages or providers of goods and services to municipal government, according to the city treasurer.

To allow municipal employees to be paid their two weeks' wages, Mexico's federal government recently advanced the city about $6 million in revenue sharing funds — the equivalent of about 467,000 U.S. dollars.

But the city is still left with the question of how to make payroll in the coming weeks, and how it will pay an estimated 12 million pesos — about $934,824 U.S. — owed vendors for goods and services now through the end of the year.

Apart from the “lack of liquidity,” Guillen's administration has found a number of other “irregularities” in the city finances, said Adriana Lozano, the new city treasurer in Guillen's administration.

For example, the city has been paying out benefits to employees who are not covered in the city's collective bargaining contract with the workers union. As a result, she said, payroll costs in recent months have accounted for 90 percent of the city's spending.

Another question left unanswered is what happened to the city's finances. Lozano said she expects the mayor and council to decide in the coming days whether to seek an audit.

The deficit has prompted Guillen's administration to make a call to property owners and motorists to come forward to pay delinquent property tax bills and traffic fines.

Lozano said the city is owed 152 million pesos — about $11.8 million — in overdue property tax payments, many of which have been delinquent for years and even decades.

Those owing taxes, she said, are not only San Luis Rio Colorado residents but people who kept their property in Mexican border city after moving to neighboring Yuma County or elsewhere in the United States.

Mexican cities have a legal mechanism for seizing property for delinquent taxes, although Lozano declined to say if that option is under consideration.

The city is owed another 68 million pesos — more than $5 million — in traffic fines going back years or decades, she added.

Guillen, previously a federal congressman, won the city's mayoral race in July as a candidate of Mexico's conservative National Action Party. He succeeded the administration of rival Institutional Revolutionary Party, known by its Spanish acronym PRI.

Having taken the oath of office on Sept. 16, he found a city hall “without liquidity to cover short-term debts or to pay city employees,” Lozano said.

Bajo El Sol left messages late last week and this week seeking comment from PRI officials and from Guillen's predecessors, Manuel Baldenebro and Joel Aguirre, who served briefly as interim mayor this year when Baldenebro stepped down to run for congress. As of Wednesday, none had responded.

Lozano said she planned to propose to the mayor and council that it try to collect at least some of the outstanding tax revenue by offering property owners a program of discounts on their delinquent taxes as an incentive to make their payments. The incentives, she said, would apply to the so-called “emigres,” property owners who have since moved to the Yuma area.

Lozano said in the coming days, she will present an updated report on city finances to the council and to state lawmakers.

“It will be up to them (state officials) whether to follow up on these irregularities.”