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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
Ray Perryman, Ph.D: Unlocking Economic Potential Through ESDs
How can Emergency Services Districts (ESDs) revolutionize public safety and economic development in growing communities? Join us on Pflugerville on Fire as we explore this vital question with Dr. Ray Perryman, an acclaimed economist. Discover the groundbreaking findings from the Perryman Group's study, which reveals that ESDs, like Travis County ESD 2, offer a remarkably cost-effective solution for emergency services compared to municipal fire departments. Through detailed comparisons and insightful analysis, Dr. Perryman demonstrates how well-managed resources and financial flexibility have transformed Pflugerville's fire department into a model of efficiency and taxpayer benefit.
In this episode, we also dive into the significant role of public safety in the economic growth of rapidly expanding areas such as Pflugerville and Central Texas. Learn about the major developments, including the new Samsung factory and Tesla facility, and their profound impact on the local economy. Dr. Perryman emphasizes the importance of maintaining robust financial reserves and strategic resource allocation to ensure effective fire protection in areas with varying population densities. This conversation underscores the critical link between public safety infrastructure and sustainable economic development, providing valuable insights for legislators and community stakeholders. Tune in to understand how ESDs could be the key to unlocking both safety and prosperity in your community.
When we compared you to the cities who try to do it themselves in the general vicinity that are about the same size, we're talking, you know, almost half the cost, and we probably weren't even capturing all the cost in the other cities. So that tells us that it's been a well-managed thing. I know you had a chief that was somewhat legendary in the area for a number of years and you have great leadership now, but it shows a consistent pattern of good, strong management, managing resources well, making wise investments at the appropriate time, having the financial flexibility to allow you to do that. Really, a lot of things plays into this.
Chris Wolff:Welcome back to this week's episode of Pflugerville on Fire. On the show today we have Dr Ray Perryman. A proper introduction would take way too long to do so. Instead, I'm just going to say go ahead and Google Ray Perryman. Basically, he's got a Bachelor of Science in Mathematics from Baylor University, a PhD in Economics from Rice. He's got an honorary doctorate from the International Institute of Advanced Studies. He's a university professor of economics. He's authored books and over 400 academic papers. He's the president and CEO of the Perryman Group. He's been called a genius by the Wall Street Journal and the most quoted man in Texas by Texas Monthly.
Chris Wolff:Basically, this guy talks to presidents, governors, senators, state elected officials, but today he's talking to all of us about economics, of emergency services, districts and your Pflugerville Fire Department, right here on Pflugerville, on Fire. Enjoy the show, all right. So on the show. Dr Perryman, thank you so much for coming on. We appreciate it,
Ray Perryman, Ph.D. :my pleasure.
Chris Wolff:So you have some tremendous accolades, including the 2012 Texan of the Year is given by the Texas Legislative Conference, the Baylor Distinguished Service Medal, the Cesar E Chavez Legacy Award for Humanitarian Efforts, and that is literally just to name a few. We're trying to keep it a short podcast, but one that was my favorite is the state's premier barbecue connoisseur.
Ray Perryman, Ph.D. :Yeah, I was quite fortunate the Dallas Morning News hung that one on me a few years ago.
Chris Wolff:That's an impressive accomplishment, especially in the great state of Texas.
Ray Perryman, Ph.D. :Well you're right, you're right there in central Texas. You're in barbecue heaven, man, we are. I tell you what.
Chris Wolff:Oh, my goodness, I don't. I don't need it enough. I need to get out there more. All right, so, sir, I am wanting to bring you on the show specifically to talk about the study that you guys did on the ESD economic impacts on communities. Do you recall that study that you guys published?
Ray Perryman, Ph.D. :It's been a few years, but yes, I do recall that very vividly. It was a very interesting study. We were able to match pairs between ESDs and nearby cities with similar population and compare things in terms of cost and efficiency, and it was a very enlightening study. I learned a lot myself while we were doing it.
Chris Wolff:Well, that's great. That is the question on the tip of everyone's tongue over here in the city of Pflugerville. There's a question about the sales tax revenue, whether it should go to the fire department, whether they have too much money, are they overspending? And so let me ask in that ESD study that you guys did, was Travis County ESD 2 included in that?
Ray Perryman, Ph.D. :Yes, it was Absolutely. We tried to find as many as we could where we had to have a couple of things to make it work. We had to have the data for the ESD and they were quite agreeable all over the state to give it to us, and then we had to have data from nearby cities so we could make some comparisons of basically what the efficiency is, the cost, relative cost, that type of thing, and then what the benefit or cost to taxpayers would be of adopting an ESD, and we ended up with a sample that included about 2.8 million Texas residents, so we had a very good sample there to work with.
Chris Wolff:That's amazing. So what made you come to study ESDs and who funded that research and how did that come to be?
Ray Perryman, Ph.D. :Well, it was funded by a group called SAFE-D, and I don't recall exactly what the acronym is. I'm sure you know it.
Chris Wolff:I do yes,
Ray Perryman, Ph.D. :it's the group that the organization that most of the ESDs in Texas are members of. I think there's over 300 of these in Texas. It's a very useful aspect of our overall infrastructure that we have in the state, and this group asked me to get involved and take a look at these things and just make some comparisons for them so they could communicate with legislators and other constituencies about the efficiency of the work that they do Well and that study came out in the year 2020, I believe, and that is.
Chris Wolff:it's so great that they did that, because those are the same questions that I and a lot of our listeners have. So thank you so much for doing that work. So what? What did you? What were you able to glean? And, as specific about Travis County, ESD number two as possible, when you're comparing ESD, that's pretty simple to do, but when you try to break out, you know what is the cost of a municipal fire department. How does one go about doing that? Because it's a lot more layered than an ESD is. It really is.
Ray Perryman, Ph.D. :And it's challenging, to say the least. We basically are dependent upon the public filings and, of course, most cities do make their financial information available, but it's available in very different formats and very different degrees of specificity and that sort of thing. So we had to look for those that where we could find an ESD that had financial information, then nearby we would try to find cities of somewhat comparable size that did give us enough financial information that we could look at their cost as well. We did this in both 2020 and 2022. We did a couple of studies and, as you mentioned, travis ESD number two was a part of that analysis and what we found with respect to your particular situation is that it was much more efficient than the cities around it and we compared.
Ray Perryman, Ph.D. :It was much more efficient than the cities around it and we compared. We had a number in Travis County and Williamson County nearby, where you are, and ESD number two was among the most efficient of that group in terms of its cost per person that it served Now for the cities, even though it turned out to be considerably more efficient for ESD number two, we probably didn't do you justice, because when you look at a city, even those that break it out. There's some of that administrative considerably more efficient. For ESD number two, we probably didn't do you justice Because when you look at a city, when even those that break it out, there's some of that administrative cost that happens above the line, so to speak. You know the general operating payrolls, that type of thing that just happens somewhere else, that don't show up in the budget for the city, but yet in the ESD every dollar is accounted for.
Ray Perryman, Ph.D. :That's right, everything is captured, yeah it's all captured in one place, so we probably were even somewhat generous to the cities in this regard. But what we found was again on average around the state, the ESDs were about 18% more efficient than the nearby cities, but for yours in particular, it was more like about 80% or 90%. It was very, very efficient 80% or 90% more efficient.
Chris Wolff:That's amazing.
Ray Perryman, Ph.D. :It really is. It really is. It speaks to the use of the resources that you've been given and that sort of thing. And I think it also speaks to I mean, I started forecasting the Texas economy in 1980. Pflugerville had about 700 people in 1980. And today it has 65,000 or more. And that's just the city. That's just the city, and the ECD of course serves a larger area. But to see that growth and evolution and all that take place and be able to consistently provide the level of resources and staff up as you needed to and that type of thing you know, shifting literally from an old fashioned volunteer fire department, like my dad was in over in Lindale Texas many years ago, which was a town of about a thousand people at the time, up to what you've become, is really remarkable.
Chris Wolff:So, sir, was there anything specifically that you were able to identify, or how are you able to determine that ESD2, the Pflugerville Fire Department, was as efficient as they are?
Ray Perryman, Ph.D. :Well, you know, what we basically looked at was what's the cost per person to operate and provide the services that you provide?
Ray Perryman, Ph.D. :Was what's the cost per person to operate and provide the services that you provide, and a lot comes into that.
Ray Perryman, Ph.D. :The less density makes it more difficult to achieve that type of performance and the varying population makes it more difficult.
Ray Perryman, Ph.D. :The wide geographic area, in relative terms, makes it more difficult. Yet, with all of those things, when we compared you to the cities who try to do it themselves in the general vicinity that are about the same size, we're talking almost half the cost, and we probably weren't even capturing all the cost in the other cities. So that tells us that it's been a well-managed thing. I know you had a chief that was somewhat legendary in the area for a number of years and you have great leadership now, but it shows a consistent pattern of good, strong management, managing resources well, making wise investments at the appropriate time, having the financial flexibility to allow you to do that. It really a lot of things plays into this and, as I say, when we started looking at these things and looking at what was happening in other areas of comparable size, both right around you and in other parts of the state. The Travis ESD number two has done a remarkable job over an extended period of time.
Chris Wolff:Well, thank you, sir. One thing that I keep reminding people is right up the street in this central Texas, like north central Texas area, we've got a Samsung factory that's coming into Taylor, we've got the Tesla and a lot of other things, and I don't really see a lot of pause in the growth of Pflugerville or the surrounding community.
Ray Perryman, Ph.D. :Oh, I don't think so at all. You've also got the large data center developments taking place around the Hutto area. I mean, on the US 79 quarter there is a significant a lot of suppliers to Samsung are already announcing that they're planning to come in there. There's a lot of others looking at it. There's data centers that have already announced substantial investments in the region. And now I agree with you, pflugerville is likely to continue to see growth for quite some time because you're in one of the premier growth corridors anywhere in the country.
Chris Wolff:Yes, sir and Dr Perriman, you've done economic development all over the globe, and I know Texas is a hotspot for that, and a lot of that has to do with strong public safety sentiment in the state. What role does public safety play in economic development like what we're seeing here?
Ray Perryman, Ph.D. :Well, it's very important. I mean, there's a number of things that people look at and your workforce is important and a number of other things, incentives that cities and communities sometimes provide but there's sort of a bottom line that to even be on the list, you have to reach certain levels, and public safety is a huge part of that, obviously, and you're dealing with in these particular types of facilities. You're dealing with some very sophisticated equipment, some very sophisticated cooling systems and heating systems and a number of things that are quite challenging, and obviously having the security of knowing that you can get a rapid response is critical for this type of location.
Chris Wolff:Yes, sir, and the research I did on you. I know it's very difficult to correlate home insurance costs with the fire department's ISO rating, but we were able to do some on the side. Have you looked into that at all?
Ray Perryman, Ph.D. :We did and, as you say, it's very difficult. You don't find a definitive chart somewhere that says if A then B. But we looked at the ratings across areas that had it and areas that didn't have it and that sort of thing, and what we found was that it's about a 3% or so insurance benefit if you're in an area that has adequate fire safety protection versus one that doesn't. In terms of how the insurance companies rate, now, that's not exact. It might be two and a half, it might be three and a half, but there is a notable function there and it is something that the insurance companies pay attention to, because obviously, if you have solid protection, you're likely to have smaller losses in the unfortunate event that something does happen.
Chris Wolff:Yes, sir, our department that you stay runs very efficiently gets a lot of criticism because it has reserves of just millions of dollars in the bank and our fire chief said they're trying to get to 50 percent reserve rate and that's pretty standard to on the low side for ESDs. What are your thoughts on the benefits of emergency services and government agencies in general and their reserves?
Ray Perryman, Ph.D. :Well, obviously reserves are important because, again, you're in a very rapidly growing area. You've had to add a lot of equipment, you've had to add a lot of personnel over time and that's likely to continue. I mentioned the data centers that are coming in the area. There's already been a big one announced in Pflugerville. I mean there are.
Ray Perryman, Ph.D. :You know, this type of thing is happening in a significant way right now with the CHIPS Act and all the investment that's stimulated on the semiconductor side. I mean there's development all around you that is going to bring in more people. It's going to bring in more businesses that are sensitive to police and fire protection and other types of public safety, and those things are going to be important. And reserves basically give you the flexibility and the nimbleness that you need to respond to that type of thing. And when you look at a city, I mean I like to think I'm not that old. And if you look at a city that had 700 people when I built the first Texas model and has almost 70,000 now, some flexibility, some nimbleness, some ability to respond to rapid change is very important.
Chris Wolff:Absolutely no. I wish I'll put a picture of you, but you're looking good, You're looking really good you caught me on a day I had to wear a tie.
Chris Wolff:I was impressed. I told Dr Perryman it was an audio only, but he came looking sharp. I was like, oh no, no, we're not even on video, but you have another engagement after this. I do indeed, yes. Well, I just can't tell you how much I appreciate you coming on. I have a couple more questions for you if you've got the time. Sure, you bet. So one thing that's very interesting in your study of ESDs is what did you find as population density as it relates to the amount of resources required for a fire department?
Ray Perryman, Ph.D. :Well, obviously you have a situation that becomes somewhat difficult If you do have, as you do. You know again, you have a concentrated population. In Pflugerville, you also have this broader area that has not as much population density, and the issue with that is, if you have something happen at those places, you've got to be able to deploy to those areas in a timely manner, and sometimes lives are at stake in doing that, and so it does create additional challenges when you have less density or when you have variable density, because you have to allocate resources more in one place, less in others, but make sure you're covering those other areas. It's very difficult to do sometimes, and again, that's a real challenge, and the numbers I've looked at suggest that you guys have handled it remarkably well.
Chris Wolff:Well, thank you, sir. My last question for you and you're quite a distinguished fellow and I imagine that you hang out with CEOs and executives, c-suite members, quite a bit I'd love to get your thoughts on. You know, with all the tech growth and the development coming into the Pflugerville community, what do people like that that are making decisions and running these companies? How do you think they feel about public safety in their neighborhoods for their families and for their kids? Well, it's absolutely essential.
Ray Perryman, Ph.D. :The currency of economic development I mean again, what we talk about is important. Public safety is certainly important, but one of the reasons it is important is the currency of economic development is people. You need quality people, in this case, very highly skilled people. They want to live in places that have good schools and good health care and strong public safety, because they're looking at raising their families in these places, committing themselves to them, investing in these communities, and that's one of the things that they look at. And then, beyond that, obviously, for the families and the employees that these companies want their employees to be happy. They want their employees to want to live where they are in these areas and, as we said, a lot of people coming into Austin right now in that category. And also, I can't emphasize enough, these facilities are extraordinarily expensive. These folks will spend, you know, a couple of thousand dollars a square foot on the stuff they put in these facilities, and it's sensitive equipment and it's equipment that is power intensive and has the kinds of things where something could happen, and they want to make sure that they're thoroughly protected there.
Ray Perryman, Ph.D. :And so you have a system that's evolved over time. For a long time it's been nimble. It's responded when it needed to and done the things it needed to. If you tried to start from scratch and build something else like this in a reasonable amount of time, it would be very inefficient. You've shown yourselves to be an efficient operator. Be very inefficient. You've shown yourselves to be an efficient operator, and so I think you're a real asset for the area as it continues to take advantage of this remarkable growth corridor that's been this coalesced around what Austin has always had in terms or at least for the last 40 years, in terms of being a tech center, combined with the spreading out of that further out into the county and even the counties beyond. The recent emphasis by the United States on more chip plants, the rise of data centers and things like artificial intelligence, which all of this is driving tremendous investment in this area, and public safety is really one of those things. If you don't check that box, they're not coming. It's that simple.
Chris Wolff:Yes, sir. Well, thank you so much for coming on the show. Dr Perriman, it was quite an honor for me to get to talk to you and to get you to specifically address a study that you guys did involving this fire department. I feel very fortunate to have you on.
Ray Perryman, Ph.D. :Thank you, my pleasure.
Chris Wolff:Wow, hope you enjoyed that episode. It's a rare privilege and one of the things about being a host of a podcast is you get to just call people up and say, hey, would you like to be on my podcast? And a lot of times they say yes and uh, dr ray perryman, it was a. It was a privilege to have him on and we sure appreciate the time that he took out of his busy schedule to talk to us. Uh and what, what a neat guy. So tune in next week. If you thought this week was good, you're going to be shocked when you see our guest next week. So make sure you tune in to Pflugerville on Fire.
