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Pflugerville on Fire
Our first episode drops August 31! This podcast mini-series will inform you about the initiative to defund the Pflugerville Fire Department. Listen on all major podcasting platforms. Subscribe to get the latest episodes. We have some great guests lined up!
Pflugerville on Fire
Jessica Frazier on Funding, Growth and Reserves
Unlock the secrets behind the surging expenses of the Travis County ESD2, better known as the Pflugerville Fire Department, with our finance director, Jessica Frazier. This episode promises to demystify the financial complexities, revealing why ceasing ambulance services and reallocation of resources have led to significant operational changes. Jessica, with her wealth of experience from the city of Austin, provides an expert analysis on agreements with ESD 17 and Travis County that generate additional revenue but also necessitate a doubling of our fire stations from four to eight.
Get ready for an enlightening discussion about budgeting, financial management, and the strategic importance of maintaining healthy reserves. Jessica and I tackle common misconceptions about budget padding and break down the financial implications of Proposition A, which could force station closures if passed. We'll highlight why the majority of our budget goes toward salaries and benefits, making it tough to cut costs without affecting services. Transparency and ethical financial management are key themes throughout this episode. Join us for a deep dive into the fiscal strategies that keep our fire department thriving.
I just hope that folks are able to focus on the facts and get educated about what the real impacts are, even though they might not fit someone else's narrative. There will be serious consequences if we lose our sales tax revenue.
Speaker 1:Welcome back to Pflugerville on Fire. I'm your host, Chris Wolfe. We've got a special episode for you this week. By popular demand, we have brought on the finance director for Travis County ESD2, the Pflugerville Fire Department, Jessica Frazier. Jessica had joined the department back in 2017. She got her undergrad in finance from what was then Southwest Texas, then went on to get a master's degree in business administration from what was then Texas State. She went to work for the city of Austin for 10 years and then joined us at the Pflugerville Fire Department, where she now runs and manages a very tumultuous and transformative period for the fire department. So she is in a unique position to answer a lot of these questions, and we worked very hard to make sure that the episode stayed as broad as possible and that we were able to limit it to a manageable 20 minutes. So I know you're going to enjoy this podcast and if you've got questions, please leave us comments and we'd be happy to go back and answer them as best we can. So stay tuned for Jessica Frazier.
Speaker 1:Jessica Frazier welcome to Pflugerville on Fire podcast. Thank you, yes, so you're a Pflugerville ETJ resident, I am. But you're speaking in your official capacity right now. No, oh, okay, you're speaking as a civilian.
Speaker 2:Well, that's a good clarification. So, I am. You know. This is we're not in business hours. We're not using district resources, but I am a resident of the district.
Speaker 1:And the foremost expert of the finances of Travis County, esdt.
Speaker 2:I won't argue with you I hope you don't.
Speaker 1:Well, we are going to try to keep this to be a short episode, and just in our prepping for this episode, we decided we have to use broad brushstrokes or we just get mired down and this turns into quite a long episode. So let's kick it off right with what people want to know about. Why have our expenses gone up so much in the last four years, jessica?
Speaker 2:Well, we have continued to expand.
Speaker 1:We quit ambulance service. Now we're expenses. We're just spending money like crazy.
Speaker 2:We should be saving money. Well, there were some savings out of that, but there was also shift in focus to make sure that we were fulfilling the fire mission, which is our primary mission, which is our responsibility. And so, in the past four years, what has happened or what has changed is, like you said we quit, we quit, we stopped. Providing we quit, we stopped providing we're done with this. We applied for the job with the city. They just didn't hire us.
Speaker 1:Which was unfortunate and we wanted to Like that was what you know we wanted to do.
Speaker 2:But we have agreements with ESD 17, which is in the Flugerville or the Austin ETJ, the southern area of our borders, and then an agreement with Travis County for the Flugerville ETJ areas to provide ambulance services in those areas.
Speaker 1:And no agreement in the city of Flugerville. No.
Speaker 2:We still provide what is referred to as first response EMS to our entire district, which means that if there's a medical call or any kind of call, there's a fire truck that comes and that fire truck has EMTs. Every firefighter is an EMT and some of them are advanced, which is the paramedic, so they are able to start providing advanced level medical interventions. Or you're a paramedic, so you can tell me.
Speaker 1:Oh, yeah, yeah, absolutely.
Speaker 2:And so that life-saving help arrives on a fire truck. We're still providing that service and it's important. If I had an emergency, I want to make sure I don't care how they get there, on what truck somebody come that has experience or the expertise and the equipment, the right tools, yeah, and the training all right so why?
Speaker 1:why is that so? What's up with the expenses then?
Speaker 2:so part of the the two agreements that we have? I'll answer your question. Part of the two agreements that we have with the two entities gives us an additional. It started in FY22, we got an additional $1.7 million and then it increases slightly each year with cost of living adjustments from the county and ESD-17. So that helped us to balance and be able to afford to provide ambulance service On the expense side, it's a permanent revenue source.
Speaker 2:I mean, I guess the county part isn't Well, both of them have chosen to contract with us to provide ambulance service, so as long as those contracts are in place, then they'll hopefully pay us for it Right On the expense side. When we were able to reduce the amount of ambulance services we were providing district-wide, we were able to shift focus back on to the fire mission and making sure that we had the resources available there, which included new fire stations and additional staffing to staff those fire stations to respond to calls.
Speaker 1:Right, when you were on with the district in 2017, we had four fire stations. Yes, how many do we have now? We have eight, all right.
Speaker 2:So in the last four years we've opened four additional fire stations and placed them in high growth areas or high concentration areas of the district where there are an increase in call volume and or we see the growth happening in those areas. And so, in addition to those stations, like I said, we have to have staffing and that's our biggest expense. We provide a service and salaries and benefits outside of building the stations and buying the fire trucks.
Speaker 1:That is the largest expense in our budget and we get listeners from all over the world. According to our podcast account, a lot of those might be VPN users, but if you don't live in Pflugerville, it's growing over here it is. It's growing quick.
Speaker 2:Yep.
Speaker 1:All right, so a lot of expenses. So we doubled the number of stations and what else.
Speaker 2:Employee positions. We've almost tripled. And when we look at budgeting for those employee positions, we look at I know you guys are padding the budget for those positions.
Speaker 2:The way we do it is we look at what positions we'll need and when we'll need them. So we are only allowed to hire the number of positions that our board has authorized us to hire, and so we have to look forward and say, okay, what positions are we going to need? What do we have coming on? We have these stations coming on. Each engine company needs 15 people. Each ambulance we need eight or nine, I think is the number now because there are three shifts. Each shift on an engine there's four people, and then those people have to take vacation and go to training and those sorts of things.
Speaker 2:So we have to add one or two here and there to help make sure we have staff, and so we look at when we're doing the forecast and we're doing the budget and we're going to add those positions. Firefighter hiring is not as quick and simple as, let's say, an accountant hiring. With an accountant, we go, we find someone with the right qualifications, we interview them, we have a couple interviews, we give them an offer letter within. You know, depending on how fast we want to move, within 30 days we can have a new accountant. If we find one With firefighters, there is a whole process that takes six months.
Speaker 1:Like how long does it take from start to finish?
Speaker 2:There's testing that has to happen. There's multiple opportunities. There's a physical test Like what else, like. There's all these things that happen.
Speaker 2:And so when we're looking at adding firefighter positions specifically, we look to see when is the next hiring process going to start? How many people do you think we can get? And then we have vacancies like how many people do we think we can fill those vacancies? So on and so forth. And so if we're looking at a budget let's say we were working on a budget today we say, okay, we'd like to hire firefighters. Well, our next process doesn't start till January and those positions won't be hired.
Speaker 1:And just to be clear. I mean, that's our January's start, but this process started three months ago.
Speaker 2:Right, we've already done interviews and Well, because we thought we were going to start the hiring sooner. So let's say we were starting from scratch.
Speaker 1:All right, let's go theoretical. It's January.
Speaker 2:January we start the testing process.
Speaker 1:Yeah.
Speaker 2:And we think we'll be done by June and ready to hire people by July. So when we're forecasting those positions in the budget, we include the salary for July, august and September only.
Speaker 1:You don't include those budget, those salaries in January.
Speaker 2:If they're vacant, no, and then we don't budget for all of them if we don't think that we can have a class or enough people that will fill them. So some of those vacant positions get a zero budget associated with them.
Speaker 1:So why are people saying that we're padding the budget with positions that we don't have?
Speaker 2:I'm not sure, maybe just misunderstanding or applying somebody else's methodology to our budget. We also have a cadet academy that has 50 positions associated with it. But we do the same thing with that. If we're not going to have an academy or if it's not going to start whenever it's going to start, however long we think it's going to be filled, we only budget, let's say, for half the year if it's a six-month academy and we think it's going to start in January again, if it's a six month academy and we think it's going to start in January again. But then we also build in some attrition because we start with a 50 person class but not all 50 people always make it through. So again, we don't budget for that whole amount, we reduce it.
Speaker 2:Now, does it happen that we think we're going to have 50 and we are going to be able to fill 50 and then we only get 40, or same thing, with just vacancies? We think we'll be able to fill 30 of them, but we only found 20 people that were qualified or made it through the process. That happens. And so we do have personnel savings On the administrative side. People leave, people retire and we don't foresee that. You know it happens, but the turnover in admin is not that high and there's not that many of us in admin.
Speaker 1:Right, probably not as big of a deal as it is with the firefighters.
Speaker 2:Right. So there are personnel savings that happen, but we do our best to make it as accurate as possible based on the facts we have at the time. We don't just budget for the positions to then have personnel savings to use for other things.
Speaker 1:We don't do that Well another big topic that you can help us out with is people like to talk about the reserves and how there's $57 million in reserves. Can you break this down, coming straight from you what's happening with our reserves? What do we got?
Speaker 2:So that $57 million that has been used is our net position or net asset. So if you go onto the district's website, flugervillefireorg, there is a financial transparency page and towards the bottom of the page you can pull up our audit from fiscal year 2023. And if you turn to page nine of that audit, you'll see that $57 million at the bottom of the page. On the top of the page it's labeled statement of net position and governmental fund balance sheet, and so I know everybody's thrilled to talk about accounting and what a balance sheet is.
Speaker 2:Balance sheets are your assets and your liabilities. So assets is basically anything of value, which includes our cash reserves, but it also includes our buildings and our fire trucks and anything that we have that is of value. And then net assets or net position tells you net is meaning means that something was done, there was a calculation done to that number, and so it subtracts our liabilities from that, and so what you're seeing, the net position, is kind of the health of the district or what our net like how much more assets do we have than liabilities? It does not equal cash. It is not a reserve. When we talk about our reserves, what we're talking about is the amount of funds we had from the previous year, plus our revenue, minus our expenses and what that's going to be left over at the end of the year. So our fund balance.
Speaker 1:Whatever revenue didn't get spent from the last year gets pushed into the next year's budget, and then you can lower taxes or whatever you can do from there. Correct?
Speaker 2:And the amount of reserves that we have and how much we should have is the other big conversation piece.
Speaker 1:Let's start with what we do have.
Speaker 2:So the projected amount of reserves for this year in our operating budget is around $32 million I believe I don't have the number right in front of me, but that's just on the operating side. We will have additional funds left over on our capital budget side because we took out a large loan for a capital project that will continue through next year. So we've got still some loan money left that's about to be spent over the next couple of months. So our actual ending balance is going to be higher than that.
Speaker 1:But from an operational perspective, what we call our reserve balance that's what we're talking about and that's another thing to point out is people are going to look at that and be like oh hey, no, there's extra money that you know for the loan, for the capital expenses. But that's exactly what that is. That isn't tax money. That was hoarded, right.
Speaker 2:No, and we, you know you kind of pointed out that if we have reserves above what our reserve requirements are, which our board has just adopted a six-month reserve requirement if there are funds above that, then when we are forecasting and working on next year's budget, we absolutely consider that as a component to spend down to reduce how much our property tax rate would need to be raised by. When you look at the property tax rate that was adopted by the board for next year, it's higher because of this threat of potentially losing sales tax revenue. So the board's being proactive to try to increase those reserves to give us more time in case the sales tax revenue gets taken away from us in the election. We have a little bit more funding to cushion us, to give us more time to make whatever moves we have to make to address that funding shortfall.
Speaker 1:So the tax rate that has been adopted by the board is a direct result of the effort to reduce the sales tax revenue. Yes, all right, so we are. Let's say, let's go part two of our reserves. We talked about kind of what, what we have, what number did we settle on?
Speaker 1:and you're off the clock so you don't have to. Actually, it was 32 million bucks, I think. So think so, all right, somewhere in there. Yeah, jessica's not getting paid right now, so she doesn't have to know it off the top of her head. Why do we need? Why do we need reserves? Why go to a six month reserve instead of keeping it at three months?
Speaker 2:So reserves are a risk management tool. So it's a way for it's a short-term solution for an immediate problem, and there have been a number of examples of immediate problems that require us to have reserves, the main one is any kind of financial instability.
Speaker 2:So in the last couple of years we've seen record levels of inflation, the costs of everything have increased, and so those reserves allow us to kind of ebb and flow with something that's beyond what we have budgeted. There are also we've, you know, just gone through COVID, you know, winter storm Uri all of those situations require us to spend more money than normal to be able to respond to these extraordinary situations, and so it allows us to be able to buy face masks and gloves or whatever we needed for COVID, and just focus on the mission and making sure that we're there to help people. Same thing with Winter Storm Yuri Call everybody in, everybody in overtime.
Speaker 2:When I looked at some of the timesheets and the things, I'm amazed that some of you guys are still standing, because the amount of hours that y'all worked it was just insane. But you answered every single call. There was a thousand calls in a week and normally you have a thousand calls over the course of a month, and so just that incredible ability to respond and have those resources available. That's part of the other reason why having reserves is important, because we don't have to stop and think how are we going to pay for this. We do it. We do what we have to do and we know we have reserves there if we need them or when we need them. There are other huge things that can happen If a tornado rips through the middle of Pflugerville, which has happened back in the day I was first in on that call yeah.
Speaker 2:If something happens, where that happens, we have to respond to it and there's costs associated with that. But then if you think about the loss of property, if it got really bad and a bunch of homes got destroyed, then that would impact our property tax revenue the next year. So, again, having those reserves will help us to continue on, because the calls are not going to stop because there's an emergency or we, or if we ran out of money, it's still our responsibility and nobody's. It's our responsibility to make sure that we're stable. We're a standalone entity and nobody's coming to help us. It's up to us, and so that's where the last we have that flag in the flag in the boardroom.
Speaker 1:It's actually up in the inspections office now.
Speaker 2:Is it?
Speaker 1:Yes, it says 30 seconds out. No one else is coming. And we talk about all the time with our recruits. You know, people dial 911 and then we can't turn around and dial 912. It's just up to us.
Speaker 2:And it's. You know, I'm in finance and so I'm not the one that's going out there. I'll be calling 9-1-1 and expect y'all to be there. But when I saw, I told you, like when I first saw, that it's just, it's kind of terrifying. It's like we have such a heavy responsibility on our shoulders. This is the other reason why we this is the other reason why we want to make sure that we are there when we need to be there, and that's the reserves.
Speaker 1:Help to make sure that we can do that. Yeah, I mean you think about how many different crises there's been just since you joined the department, and I don't think we've dropped the ball on any of them.
Speaker 2:I don't think so either. I we've been there, we figured it out. I don't think so either.
Speaker 1:I we've been there, we figured it out, unlike some other people, and I and this this shows not to disparage anybody, but I personally sat on a cardiac arrest waiting for um other officials to get there that didn't have four wheel drives or snow chains and just couldn't get to us. Yeah, and we didn't have that problem, okay, okay. So why would we need to then close stations? If Prop A is passed and people vote yes on it, which everyone has the right to vote, however they think, as long as you understand that that's taken away sales tax revenue, why is it such a big impact?
Speaker 2:So part of the conversation has been because we have these reserves, we can afford to just continue. But I started out by saying reserves are a temporary solution to what would be a permanent problem. We can't hope, cross our fingers and think, okay, someone's going to. We just got through talking about the fact that who's going to help us, right? So temporarily we can use those reserves to fund but once they're gone, they're gone and the costs for those stations, if our sales tax gets taken away, how does that reduce our expenses? So we have to find a way to reduce our expenses Got to cut service.
Speaker 2:The bit we talked about earlier. I think it's at 70% of our budget. Our operating budget is salaries and benefits. So even if we only paid for people and their benefits, it's not going to be enough to reduce the budget enough to be able to fund our operations as they stand now. We are going to have to reduce our operations as they stand now and again, if we don't have staffing to fill stations, then we have to redeploy that and close stations. We have less people to fill them. We have to have less stations. We could stop every other capital project and everything else and the cost of those projects are debt funded, so we still have to pay that debt. Or even if we sold, like those two things would basically net each other out and we'd still be left with okay, we have to pay all these people and we have to pay for all of this operational, you know, to have our operations. What else? What else is there?
Speaker 2:What else can we do?
Speaker 1:Yeah, wow, okay. So, we promised our listeners broad brushstrokes. We talked about the expenses our FTEs reserves and why we might have to close stations. I know you're sitting here as a citizen of the ETJ and someone that has heard a lot of noise. I don't know any messages for people out there that haven't made their decision on which way to go, or I would just say that, yes, I'm a resident.
Speaker 2:This would impact me, just like I'm a taxpayer, just like everybody else. I think that my focus is on facts and things that you can go to our audit. You can look at these things. I can explain to you our methodology. You can go and look on our financial transparencies page to look at our financial policies, which govern or drive how we forecast, how we budget.
Speaker 2:But as a just a professional, I take a lot of pride in my moral compass and my focus on ethics, and a lot of what I do in my industry has to do with being honest and being transparent and not trying to confuse people, and so that's what I've tried to focus on is these are the numbers.
Speaker 2:I can explain to you the intent behind them, and others might have a difference of opinion of how our finances should be run, and that's okay. But ultimately, our board and our fire chief and myself and everybody else on you know that works for the ESD2, we're the ones that have to live and breathe and live with these decisions and so far, I think we've done a really great job. We have an amazing fire department. Think we've done a really great job. We have an amazing fire department and a lot of that is built on this financial stability that we have. That started with Chief Ron Mullenberg and we've carried forward those tenants and we've been very successful and I think we are a great asset to the community. And so, personally, it troubles me to think that that might have to be torn down, for lack of a better word. So I just hope that folks are able to focus on the facts and get educated about what the real impacts are, even though they might not fit someone else's narrative. There will be serious consequences if we lose our sales tax revenue.
Speaker 1:Well, Jessica, you took your private time out to talk to our listeners and we sure appreciate you and listeners. Thank you so much for getting educated right, Finding facts and making an informed decision. And whatever decision you make, you know, if you listen to the Pflugerville on fire podcast, you got a pretty good idea of what's going on.
Speaker 2:So we thank you very much for coming on the show. Sure Thanks for having me.
Speaker 1:Thanks for tuning into this week's episode of Pflugerville on fire. I really appreciated the opportunity to get to talk to Jessica and for her spending her time as the finance director to come over here and speak to us, and not just on behalf of the department but as a citizen. She really covered a lot of the things that people wanted to talk about. You know why did the expenses go up? Are you know, a lot of accusations of staffing people in the budget that weren't there and a lot of questions about the reserves. So I feel pretty good about being able to bring that information to the listeners and hopefully you got some stuff out of it. Tune in next week. We're still emphasizing the finance homework assignment for listeners out there. Google Ray Perryman and, spoiler alert, that's who we're going to have on the show next week. So make sure you're tuning in and we'll see you on the next episode of Pflugerville on Fire.
