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Kemah facing $1 million shortfall due to tourism slowdown amid coronavirus pandemic

KEMAH – Kemah is a town that thrives on tourists, but the coronavirus crisis is keeping the crowds away from the Boardwalk and surrounding businesses. As a result, the city made budget cuts and cut several key positions, including police officers.

"We're down a significant, significant amount," said business owner Colton Trout, who owns Paradise Tropical Wines. "Mainly because we're in a tourist location. We should be packed. There should be people all around us. But right now, its COVID-19. Everybody is staying at home. But that's good, right?"

Next door, Saul Balderas, who owns Lil' Saul's Tacos, said keeping the doors open means finding new ways to reach customers.

"We're probably down about 60 percent," said Balderas. "The community has been great. That's the whole, sole reason why we're able to keep it going."

Mayor Terri Gale told KPRC 2 Investigates the city has a $4.5 million budget and is facing an estimated $1 million shortfall from sales and beverage tax. She said the city's depleted financial reserves is the reason for the cuts.

Gale said the council approved furloughing two police officers and leaving three positions in the police department unfilled. Jobs in public works, the communication office, the IT department, and the county clerk were eliminated.

Kemah transferred $100,000 earmarked for the capital improvement projects to the general fund, officials said.

Gale said she instructed the police department to research the feasibility of outsourcing its dispatch and jail. The city will also seek federal reimbursement for expenses incurred as a direct result of the pandemic.

Mayor Gale released a written statement regarding the budget cuts:

This drastic measure is due to our reduced sales and beverage tax revenues and due to the inadequacy of financial reserves maintained by the previous administration for emergency situations; reserve money was used on city projects instead, for expansion of and furniture for city hall and modification of the city parking lot. The budget cut decisions were made in a City Council meeting that occurred last night. There will be weekly budget workshops and/or Council meetings to continue to monitor our budget and cash positions for further actions that might be needed.