SOUTH PADRE ISLAND, Texas (KVEO) — As tourism took a hit in March and April, South Padre Island discussed budget cuts on Wednesday to keep from dipping into the $6 million dollars in reserve cash.
The city is looking at cuts to offset $2,074,000 in expenses.
“Plan for the worst, hope for the best and be proactive,” said City Council Member Kerry Schwartz as Chief Financial Officer Rodrigo Gimenez crunched the numbers at a Mid-Year Budget Review for Fiscal Year 2019-2020.
The Hotel Occupancy Tax and Convention and Visitors Bureau loss is the largest chunk in March and April with an estimated $1,270,000 in deficit and collected an estimated $179,000.
To get out of the red, SPI is expected to reduce funds for shoreline projects, a 3 to a 6-month hiring freeze in certain positions and reduce marketing budgets aimed at tourism.
College co-eds did not flock to the shorelines in March for Spring Break, and as COVID-19 began to make national headlines, Texas week was cut short as South Padre Island Mayor Patrick McNulty declared a local state of disaster. The declaration to limit community gathering of over 50 people escalated as the threat of the virus spread nationwide.
The good news, according to SPI’s CFO is since there was a low turnout for Spring Break, the money budgeted wasn’t spent. The unfortunate side is the revenue expected for the city through taxes isn’t there and businesses felt the immediate pinch.
“We don’t know where this is going to put us in June, July or August,” said Mayor McNulty.
The agenda item was to discuss the cuts with the action items to be voted upon at a later date.
To watch the full budget review click here.