September 27, 2024 • 24 mins
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.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 2 (00:07):
I just hope that folks are able to focus on the
facts and get educated aboutwhat the real impacts are, even
though they might not fitsomeone else's narrative.
There will be seriousconsequences if we lose our
sales tax revenue.
Speaker 1 (00:25):
Welcome back to Pflugerville on Fire.
I'm your host, Chris Wolfe.
We've got a special episode foryou this week.
By popular demand, we havebrought on the finance director
for Travis County ESD2, thePflugerville Fire Department,
Jessica Frazier.
Jessica had joined thedepartment back in 2017.
She got her undergrad infinance from what was then
(00:48):
Southwest Texas, then went on toget a master's degree in
business administration fromwhat was then Texas State.
She went to work for the cityof Austin for 10 years and then
joined us at the PflugervilleFire Department, where she now
runs and manages a verytumultuous and transformative
(01:10):
period for the fire department.
So she is in a unique positionto answer a lot of these
questions, and we worked veryhard to make sure that the
episode stayed as broad aspossible and that we were able
to limit it to a manageable 20minutes.
So I know you're going to enjoythis podcast and if you've got
(01:31):
questions, please leave uscomments and we'd be happy to go
back and answer them as best wecan.
So stay tuned for JessicaFrazier.
Jessica Frazier welcome toPflugerville on Fire podcast.
Thank you, yes, so you're aPflugerville ETJ resident, I am.
But you're speaking in yourofficial capacity right now.
(01:52):
No, oh, okay, you're speakingas a civilian.
Speaker 2 (01:56):
Well, that's a good clarification.
So, I am.
You know.
This is we're not in businesshours.
We're not using districtresources, but I am a resident
of the district.
Speaker 1 (02:07):
And the foremost expert of the finances of Travis
County, esdt.
Speaker 2 (02:11):
I won't argue with you I hope you don't.
Speaker 1 (02:14):
Well, we are going to try to keep this to be a short
episode, and just in ourprepping for this episode, we
decided we have to use broadbrushstrokes or we just get
mired down and this turns intoquite a long episode.
So let's kick it off right withwhat people want to know about.
Why have our expenses gone upso much in the last four years,
(02:36):
jessica?
Speaker 2 (02:37):
Well, we have continued to expand.
Speaker 1 (02:41):
We quit ambulance service.
Now we're expenses.
We're just spending money likecrazy.
Speaker 2 (02:45):
We should be saving money.
Well, there were some savingsout of that, but there was also
shift in focus to make sure thatwe were fulfilling the fire
mission, which is our primarymission, which is our
responsibility.
And so, in the past four years,what has happened or what has
changed is, like you said wequit, we quit, we stopped.
Providing we quit, we stoppedproviding we're done with this.
(03:08):
We applied for the job with thecity.
They just didn't hire us.
Speaker 1 (03:11):
Which was unfortunate and we wanted to Like that was
what you know we wanted to do.
Speaker 2 (03:25):
But we have agreements with ESD 17, which is
in the Flugerville or theAustin ETJ, the southern area of
our borders, and then anagreement with Travis County for
the Flugerville ETJ areas toprovide ambulance services in
those areas.
Speaker 1 (03:32):
And no agreement in the city of Flugerville.
No.
Speaker 2 (03:36):
We still provide what is referred to as first
response EMS to our entiredistrict, which means that if
there's a medical call or anykind of call, there's a fire
truck that comes and that firetruck has EMTs.
Every firefighter is an EMT andsome of them are advanced,
which is the paramedic, so theyare able to start providing
(03:56):
advanced level medicalinterventions.
Or you're a paramedic, so youcan tell me.
Speaker 1 (04:00):
Oh, yeah, yeah, absolutely.
Speaker 2 (04:02):
And so that life-saving help arrives on a
fire truck.
We're still providing thatservice and it's important.
If I had an emergency, I wantto make sure I don't care how
they get there, on what trucksomebody come that has
experience or the expertise andthe equipment, the right tools,
yeah, and the training all rightso why?
Speaker 1 (04:20):
why is that so?
What's up with the expensesthen?
Speaker 2 (04:23):
so part of the the two agreements that we have?
I'll answer your question.
Part of the two agreements thatwe have with the two entities
gives us an additional.
It started in FY22, we got anadditional $1.7 million and then
it increases slightly each yearwith cost of living adjustments
from the county and ESD-17.
So that helped us to balanceand be able to afford to provide
(04:44):
ambulance service On theexpense side, it's a permanent
revenue source.
I mean, I guess the county partisn't Well, both of them have
chosen to contract with us toprovide ambulance service, so as
long as those contracts are inplace, then they'll hopefully
pay us for it Right On theexpense side.
When we were able to reduce theamount of ambulance services we
(05:06):
were providing district-wide,we were able to shift focus back
on to the fire mission andmaking sure that we had the
resources available there, whichincluded new fire stations and
additional staffing to staffthose fire stations to respond
to calls.
Speaker 1 (05:21):
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 (05:28):
So in the last four years we've opened four
additional fire stations andplaced them in high growth areas
or high concentration areas ofthe district where there are an
increase in call volume and orwe see the growth happening in
those areas.
And so, in addition to thosestations, like I said, we have
to have staffing and that's ourbiggest expense.
(05:49):
We provide a service andsalaries and benefits outside of
building the stations andbuying the fire trucks.
Speaker 1 (05:54):
That is the largest expense in our budget and we get
listeners from all over theworld.
According to our podcastaccount, a lot of those might be
VPN users, but if you don'tlive in Pflugerville, it's
growing over here it is.
It's growing quick.
Speaker 2 (06:09):
Yep.
Speaker 1 (06:09):
All right, so a lot of expenses.
So we doubled the number ofstations and what else.
Speaker 2 (06:16):
Employee positions.
We've almost tripled.
And when we look at budgetingfor those employee positions, we
look at I know you guys arepadding the budget for those
positions.
The way we do it is we look atwhat positions we'll need and
when we'll need them.
So we are only allowed to hirethe number of positions that our
board has authorized us to hire, and so we have to look forward
(06:38):
and say, okay, what positionsare we going to need?
What do we have coming on?
We have these stations comingon.
Each engine company needs 15people.
Each ambulance we need eight ornine, I think is the number now
because there are three shifts.
Each shift on an engine there'sfour people, and then those
people have to take vacation andgo to training and those sorts
(06:59):
of things.
So we have to add one or twohere and there to help make sure
we have staff, and so we lookat when we're doing the forecast
and we're doing the budget andwe're going to add those
positions.
Firefighter hiring is not asquick and simple as, let's say,
an accountant hiring.
With an accountant, we go, wefind someone with the right
qualifications, we interviewthem, we have a couple
(07:19):
interviews, we give them anoffer letter within.
You know, depending on how fastwe want to move, within 30 days
we can have a new accountant.
If we find one Withfirefighters, there is a whole
process that takes six months.
Speaker 1 (07:30):
Like how long does it take from start to finish?
Speaker 2 (07:33):
There's testing that has to happen.
There's multiple opportunities.
There's a physical test Likewhat else, like.
There's all these things thathappen.
And so when we're looking atadding firefighter positions
specifically, we look to seewhen is the next hiring process
going to start?
How many people do you think wecan get?
And then we have vacancies likehow many people do we think we
can fill those vacancies?
(07:54):
So on and so forth.
And so if we're looking at abudget let's say we were working
on a budget today we say, okay,we'd like to hire firefighters.
Well, our next process doesn'tstart till January and those
positions won't be hired.
Speaker 1 (08:06):
And just to be clear.
I mean, that's our January'sstart, but this process started
three months ago.
Speaker 2 (08:13):
Right, we've already done interviews and Well,
because we thought we were goingto start the hiring sooner.
So let's say we were startingfrom scratch.
Speaker 1 (08:19):
All right, let's go theoretical.
It's January.
Speaker 2 (08:22):
January we start the testing process.
Speaker 1 (08:24):
Yeah.
Speaker 2 (08:25):
And we think we'll be done by June and ready to hire
people by July.
So when we're forecasting thosepositions in the budget, we
include the salary for July,august and September only.
Speaker 1 (08:35):
You don't include those budget, those salaries in
January.
Speaker 2 (08:39):
If they're vacant, no , and then we don't budget for
all of them if we don't thinkthat we can have a class or
enough people that will fillthem.
So some of those vacantpositions get a zero budget
associated with them.
Speaker 1 (08:53):
So why are people saying that we're padding the
budget with positions that wedon't have?
Speaker 2 (08:59):
I'm not sure, maybe just misunderstanding or
applying somebody else'smethodology to our budget.
We also have a cadet academythat has 50 positions associated
with it.
But we do the same thing withthat.
If we're not going to have anacademy or if it's not going to
start whenever it's going tostart, however long we think
it's going to be filled, we onlybudget, let's say, for half the
(09:19):
year if it's a six-monthacademy and we think it's going
to start in January again, ifit's a six month academy and we
think it's going to start inJanuary again.
But then we also build in someattrition because we start with
a 50 person class but not all 50people always make it through.
So again, we don't budget forthat whole amount, we reduce it.
Now, does it happen that wethink we're going to have 50 and
(09:40):
we are going to be able to fill50 and then we only get 40, or
same thing, with just vacancies?
We think we'll be able to fill30 of them, but we only found 20
people that were qualified ormade it through the process.
That happens.
And so we do have personnelsavings On the administrative
side.
People leave, people retire andwe don't foresee that.
You know it happens, but theturnover in admin is not that
(10:02):
high and there's not that manyof us in admin.
Speaker 1 (10:04):
Right, probably not as big of a deal as it is with
the firefighters.
Speaker 2 (10:07):
Right.
So there are personnel savingsthat happen, but we do our best
to make it as accurate aspossible based on the facts we
have at the time.
We don't just budget for thepositions to then have personnel
savings to use for other things.
Speaker 1 (10:21):
We don't do that Well another big topic that you can
help us out with is people liketo talk about the reserves and
how there's $57 million inreserves.
Can you break this down, comingstraight from you what's
happening with our reserves?
What do we got?
Speaker 2 (10:39):
So that $57 million that has been used is our net
position or net asset.
So if you go onto thedistrict's website,
flugervillefireorg, there is afinancial transparency page and
towards the bottom of the pageyou can pull up our audit from
fiscal year 2023.
And if you turn to page nine ofthat audit, you'll see that $57
(11:00):
million at the bottom of thepage.
On the top of the page it'slabeled statement of net
position and governmental fundbalance sheet, and so I know
everybody's thrilled to talkabout accounting and what a
balance sheet is.
Balance sheets are your assetsand your liabilities.
So assets is basically anythingof value, which includes our
cash reserves, but it alsoincludes our buildings and our
(11:20):
fire trucks and anything that wehave that is of value.
And then net assets or netposition tells you net is
meaning means that something wasdone, there was a calculation
done to that number, and so itsubtracts our liabilities from
that, and so what you're seeing,the net position, is kind of
the health of the district orwhat our net like how much more
(11:41):
assets do we have thanliabilities?
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 fromthe previous year, plus our
revenue, minus our expenses andwhat that's going to be left
over at the end of the year.
So our fund balance.
Speaker 1 (12:00):
Whatever revenue didn't get spent from the last
year gets pushed into the nextyear's budget, and then you can
lower taxes or whatever you cando from there.
Correct?
Speaker 2 (12:11):
And the amount of reserves that we have and how
much we should have is the otherbig conversation piece.
Speaker 1 (12:19):
Let's start with what we do have.
Speaker 2 (12:21):
So the projected amount of reserves for this year
in our operating budget isaround $32 million I believe I
don't have the number right infront of me, but that's just on
the operating side.
We will have additional fundsleft over on our capital budget
side because we took out a largeloan for a capital project that
will continue through next year.
So we've got still some loanmoney left that's about to be
(12:43):
spent over the next couple ofmonths.
So our actual ending balance isgoing to be higher than that.
Speaker 1 (12:47):
But from an operational perspective, what we
call our reserve balance that'swhat we're talking about and
that's another thing to pointout 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 thecapital expenses.
But that's exactly what that is.
That isn't tax money.
That was hoarded, right.
Speaker 2 (13:06):
No, and we, you know you kind of pointed out that if
we have reserves above what ourreserve requirements are, which
our board has just adopted asix-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 toreduce how much our property tax
(13:29):
rate would need to be raised by.
When you look at the propertytax rate that was adopted by the
board for next year, it'shigher because of this threat of
potentially losing sales taxrevenue.
So the board's being proactiveto try to increase those
reserves to give us more time incase the sales tax revenue gets
taken away from us in theelection.
(13:50):
We have a little bit morefunding to cushion us, to give
us more time to make whatevermoves we have to make to address
that funding shortfall.
Speaker 1 (13:59):
So the tax rate that has been adopted by the board is
a direct result of the effortto reduce the sales tax revenue.
Yes, all right, so we are.
Let's say, let's go part two ofour reserves.
We talked about kind of what,what we have, what number did we
settle on?
(14:19):
and you're off the clock so youdon't have to.
Actually, it was 32 millionbucks, I think.
So think so, all right,somewhere in there.
Yeah, jessica's not gettingpaid right now, so she doesn't
have to know it off the top ofher head.
Why do we need?
Why do we need reserves?
Why go to a six month reserveinstead of keeping it at three
months?
Speaker 2 (14:36):
So reserves are a risk management tool.
So it's a way for it's ashort-term solution for an
immediate problem, and therehave been a number of examples
of immediate problems thatrequire us to have reserves, the
main one is any kind offinancial instability.
(14:57):
So in the last couple of yearswe've seen record levels of
inflation, the costs ofeverything have increased, and
so those reserves allow us tokind of ebb and flow with
something that's beyond what wehave budgeted.
There are also we've, you know,just gone through COVID, you
know, winter storm Uri all ofthose situations require us to
(15:18):
spend more money than normal tobe able to respond to these
extraordinary situations, and soit allows us to be able to buy
face masks and gloves orwhatever we needed for COVID,
and just focus on the missionand making sure that we're there
to help people.
Same thing with Winter StormYuri Call everybody in,
everybody in overtime.
(15:38):
When I looked at some of thetimesheets and the things, I'm
amazed that some of you guys arestill standing, because the
amount of hours that y'allworked it was just insane.
But you answered every singlecall.
There was a thousand calls in aweek and normally you have a
thousand calls over the courseof a month, and so just that
incredible ability to respondand have those resources
(15:59):
available.
That's part of the other reasonwhy having reserves is
important, because we don't haveto stop and think how are we
going to pay for this.
We do it.
We do what we have to do and weknow we have reserves there if
we need them or when we needthem.
There are other huge thingsthat can happen If a tornado
rips through the middle ofPflugerville, which has happened
back in the day I was first inon that call yeah.
(16:25):
If something happens, where thathappens, we have to respond to
it and there's costs associatedwith that.
But then if you think about theloss of property, if it got
really bad and a bunch of homesgot destroyed, then that would
impact our property tax revenuethe next year.
So, again, having thosereserves will help us to
continue on, because the callsare not going to stop because
(16:45):
there's an emergency or we, orif we ran out of money, it's
still our responsibility andnobody's.
It's our responsibility to makesure that we're stable.
We're a standalone entity andnobody's coming to help us.
It's up to us, and so that'swhere the last we have that flag
in the flag in the boardroom.
Speaker 1 (17:05):
It's actually up in the inspections office now.
Speaker 2 (17:08):
Is it?
Speaker 1 (17:08):
Yes, it says 30 seconds out.
No one else is coming.
And we talk about all the timewith our recruits.
You know, people dial 911 andthen we can't turn around and
dial 912.
It's just up to us.
Speaker 2 (17:24):
And it's.
You know, I'm in finance and soI'm not the one that's going
out there.
I'll be calling 9-1-1 andexpect 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 heavyresponsibility on our shoulders.
This is the other reason why wethis is the other reason why we
(17:46):
want to make sure that we arethere when we need to be there,
and that's the reserves.
Speaker 1 (17:49):
Help to make sure that we can do that.
Yeah, I mean you think abouthow many different crises
there's been just since youjoined the department, and I
don't think we've dropped theball on any of them.
Speaker 2 (18:02):
I don't think so either.
I we've been there, we figuredit out.
I don't think so either.
Speaker 1 (18:06):
I we've been there, we figured it out, unlike some
other people, and I and thisthis shows not to disparage
anybody, but I personally sat ona cardiac arrest waiting for um
other officials to get therethat didn't have four wheel
drives or snow chains and justcouldn't get to us.
Yeah, and we didn't have thatproblem, okay, okay.
(18:30):
So why would we need to thenclose stations?
If Prop A is passed and peoplevote yes on it, which everyone
has the right to vote, howeverthey think, as long as you
understand that that's takenaway sales tax revenue, why is
it such a big impact?
Speaker 2 (18:46):
So part of the conversation has been because we
have these reserves, we canafford to just continue.
But I started out by sayingreserves are a temporary
solution to what would be apermanent problem.
We can't hope, cross ourfingers and think, okay,
someone's going to.
We just got through talkingabout the fact that who's going
to help us, right?
So temporarily we can use thosereserves to fund but once
(19:10):
they're gone, they're gone andthe costs for those stations, if
our sales tax gets taken away,how does that reduce our
expenses?
So we have to find a way toreduce our expenses Got to cut
service.
The bit we talked about earlier.
I think it's at 70% of ourbudget.
(19:32):
Our operating budget issalaries and benefits.
So even if we only paid forpeople and their benefits, it's
not going to be enough to reducethe budget enough to be able to
fund our operations as theystand now.
We are going to have to reduceour operations as they stand now
(19:52):
and again, if we don't havestaffing to fill stations, then
we have to redeploy that andclose stations.
We have less people to fillthem.
We have to have less stations.
We could stop every othercapital project and everything
else and the cost of thoseprojects are debt funded, so we
(20:14):
still have to pay that debt.
Or even if we sold, like thosetwo things would basically net
each other out and we'd still beleft with okay, we have to pay
all these people and we have topay for all of this operational,
you know, to have ouroperations.
What else?
What else is there?
What else can we do?
Speaker 1 (20:31):
Yeah, wow, okay.
So, we promised our listenersbroad brushstrokes.
We talked about the expensesour FTEs reserves and why we
might have to close stations.
I know you're sitting here as acitizen of the ETJ and someone
that has heard a lot of noise.
I don't know any messages forpeople out there that haven't
(20:54):
made their decision on which wayto go, or I would just say that
, yes, I'm a resident.
Speaker 2 (21:00):
This would impact me, just like I'm a taxpayer, just
like everybody else.
I think that my focus is onfacts and things that you can go
to our audit.
You can look at these things.
I can explain to you ourmethodology.
You can go and look on ourfinancial transparencies page to
look at our financial policies,which govern or drive how we
(21:22):
forecast, how we budget.
But as a just a professional, Itake 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 beinghonest and being transparent and
not trying to confuse people,and so that's what I've tried to
(21:43):
focus on is these are thenumbers.
I can explain to you the intentbehind them, and others might
have a difference of opinion ofhow our finances should be run,
and that's okay.
But ultimately, our board andour fire chief and myself and
everybody else on you know thatworks for the ESD2, we're the
(22:05):
ones that have to live andbreathe and live with these
decisions and so far, I thinkwe've done a really great job.
We have an amazing firedepartment.
Think we've done a really greatjob.
We have an amazing firedepartment and a lot of that is
built on this financialstability that we have.
That started with Chief RonMullenberg and we've carried
forward those tenants and we'vebeen very successful and I think
(22:26):
we are a great asset to thecommunity.
And so, personally, it troublesme to think that that might
have to be torn down, for lackof a better word.
So I just hope that folks areable to focus on the facts and
get educated about what the realimpacts are, even though they
(22:49):
might not fit someone else'snarrative.
There will be seriousconsequences if we lose our
sales tax revenue.
Speaker 1 (22:58):
Well, Jessica, you took your private time out to
talk to our listeners and wesure appreciate you and
listeners.
Thank you so much for gettingeducated 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
(23:20):
what's going on.
Speaker 2 (23:20):
So we thank you very much for coming on the show.
Sure Thanks for having me.
Speaker 1 (23:26):
Thanks for tuning into this week's episode of
Pflugerville on fire.
I really appreciated theopportunity to get to talk to
Jessica and for her spending hertime 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 thethings that people wanted to
talk about.
You know why did the expensesgo up?
(23:47):
Are you know, a lot ofaccusations of staffing people
in the budget that weren't thereand a lot of questions about
the reserves.
So I feel pretty good aboutbeing able to bring that
information to the listeners andhopefully you got some stuff
out of it.
Tune in next week.
We're still emphasizing thefinance homework assignment for
(24:07):
listeners out there.
Google Ray Perryman and,spoiler alert, that's who we're
going to have on the show nextweek.
So make sure you're tuning inand we'll see you on the next
episode of Pflugerville on Fire.
I just hope that folks are able to focus on the
facts and get educated aboutwhat the real impacts are, even
though they might not fitsomeone else's narrative.
There will be seriousconsequences if we lose our
sales tax revenue.
Speaker 1 (00:25):
Welcome back to Pflugerville on Fire.
I'm your host, Chris Wolfe.
We've got a special episode foryou this week.
By popular demand, we havebrought on the finance director
for Travis County ESD2, thePflugerville Fire Department,
Jessica Frazier.
Jessica had joined thedepartment back in 2017.
She got her undergrad infinance from what was then
(00:48):
Southwest Texas, then went on toget a master's degree in
business administration fromwhat was then Texas State.
She went to work for the cityof Austin for 10 years and then
joined us at the PflugervilleFire Department, where she now
runs and manages a verytumultuous and transformative
(01:10):
period for the fire department.
So she is in a unique positionto answer a lot of these
questions, and we worked veryhard to make sure that the
episode stayed as broad aspossible and that we were able
to limit it to a manageable 20minutes.
So I know you're going to enjoythis podcast and if you've got
(01:31):
questions, please leave uscomments and we'd be happy to go
back and answer them as best wecan.
So stay tuned for JessicaFrazier.
Jessica Frazier welcome toPflugerville on Fire podcast.
Thank you, yes, so you're aPflugerville ETJ resident, I am.
But you're speaking in yourofficial capacity right now.
(01:52):
No, oh, okay, you're speakingas a civilian.
Speaker 2 (01:56):
Well, that's a good clarification.
So, I am.
You know.
This is we're not in businesshours.
We're not using districtresources, but I am a resident
of the district.
Speaker 1 (02:07):
And the foremost expert of the finances of Travis
County, esdt.
Speaker 2 (02:11):
I won't argue with you I hope you don't.
Speaker 1 (02:14):
Well, we are going to try to keep this to be a short
episode, and just in ourprepping for this episode, we
decided we have to use broadbrushstrokes or we just get
mired down and this turns intoquite a long episode.
So let's kick it off right withwhat people want to know about.
Why have our expenses gone upso much in the last four years,
(02:36):
jessica?
Speaker 2 (02:37):
Well, we have continued to expand.
Speaker 1 (02:41):
We quit ambulance service.
Now we're expenses.
We're just spending money likecrazy.
Speaker 2 (02:45):
We should be saving money.
Well, there were some savingsout of that, but there was also
shift in focus to make sure thatwe were fulfilling the fire
mission, which is our primarymission, which is our
responsibility.
And so, in the past four years,what has happened or what has
changed is, like you said wequit, we quit, we stopped.
Providing we quit, we stoppedproviding we're done with this.
(03:08):
We applied for the job with thecity.
They just didn't hire us.
Speaker 1 (03:11):
Which was unfortunate and we wanted to Like that was
what you know we wanted to do.
Speaker 2 (03:25):
But we have agreements with ESD 17, which is
in the Flugerville or theAustin ETJ, the southern area of
our borders, and then anagreement with Travis County for
the Flugerville ETJ areas toprovide ambulance services in
those areas.
Speaker 1 (03:32):
And no agreement in the city of Flugerville.
No.
Speaker 2 (03:36):
We still provide what is referred to as first
response EMS to our entiredistrict, which means that if
there's a medical call or anykind of call, there's a fire
truck that comes and that firetruck has EMTs.
Every firefighter is an EMT andsome of them are advanced,
which is the paramedic, so theyare able to start providing
(03:56):
advanced level medicalinterventions.
Or you're a paramedic, so youcan tell me.
Speaker 1 (04:00):
Oh, yeah, yeah, absolutely.
Speaker 2 (04:02):
And so that life-saving help arrives on a
fire truck.
We're still providing thatservice and it's important.
If I had an emergency, I wantto make sure I don't care how
they get there, on what trucksomebody come that has
experience or the expertise andthe equipment, the right tools,
yeah, and the training all rightso why?
Speaker 1 (04:20):
why is that so?
What's up with the expensesthen?
Speaker 2 (04:23):
so part of the the two agreements that we have?
I'll answer your question.
Part of the two agreements thatwe have with the two entities
gives us an additional.
It started in FY22, we got anadditional $1.7 million and then
it increases slightly each yearwith cost of living adjustments
from the county and ESD-17.
So that helped us to balanceand be able to afford to provide
(04:44):
ambulance service On theexpense side, it's a permanent
revenue source.
I mean, I guess the county partisn't Well, both of them have
chosen to contract with us toprovide ambulance service, so as
long as those contracts are inplace, then they'll hopefully
pay us for it Right On theexpense side.
When we were able to reduce theamount of ambulance services we
(05:06):
were providing district-wide,we were able to shift focus back
on to the fire mission andmaking sure that we had the
resources available there, whichincluded new fire stations and
additional staffing to staffthose fire stations to respond
to calls.
Speaker 1 (05:21):
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 (05:28):
So in the last four years we've opened four
additional fire stations andplaced them in high growth areas
or high concentration areas ofthe district where there are an
increase in call volume and orwe see the growth happening in
those areas.
And so, in addition to thosestations, like I said, we have
to have staffing and that's ourbiggest expense.
(05:49):
We provide a service andsalaries and benefits outside of
building the stations andbuying the fire trucks.
Speaker 1 (05:54):
That is the largest expense in our budget and we get
listeners from all over theworld.
According to our podcastaccount, a lot of those might be
VPN users, but if you don'tlive in Pflugerville, it's
growing over here it is.
It's growing quick.
Speaker 2 (06:09):
Yep.
Speaker 1 (06:09):
All right, so a lot of expenses.
So we doubled the number ofstations and what else.
Speaker 2 (06:16):
Employee positions.
We've almost tripled.
And when we look at budgetingfor those employee positions, we
look at I know you guys arepadding the budget for those
positions.
The way we do it is we look atwhat positions we'll need and
when we'll need them.
So we are only allowed to hirethe number of positions that our
board has authorized us to hire, and so we have to look forward
(06:38):
and say, okay, what positionsare we going to need?
What do we have coming on?
We have these stations comingon.
Each engine company needs 15people.
Each ambulance we need eight ornine, I think is the number now
because there are three shifts.
Each shift on an engine there'sfour people, and then those
people have to take vacation andgo to training and those sorts
(06:59):
of things.
So we have to add one or twohere and there to help make sure
we have staff, and so we lookat when we're doing the forecast
and we're doing the budget andwe're going to add those
positions.
Firefighter hiring is not asquick and simple as, let's say,
an accountant hiring.
With an accountant, we go, wefind someone with the right
qualifications, we interviewthem, we have a couple
(07:19):
interviews, we give them anoffer letter within.
You know, depending on how fastwe want to move, within 30 days
we can have a new accountant.
If we find one Withfirefighters, there is a whole
process that takes six months.
Speaker 1 (07:30):
Like how long does it take from start to finish?
Speaker 2 (07:33):
There's testing that has to happen.
There's multiple opportunities.
There's a physical test Likewhat else, like.
There's all these things thathappen.
And so when we're looking atadding firefighter positions
specifically, we look to seewhen is the next hiring process
going to start?
How many people do you think wecan get?
And then we have vacancies likehow many people do we think we
can fill those vacancies?
(07:54):
So on and so forth.
And so if we're looking at abudget let's say we were working
on a budget today we say, okay,we'd like to hire firefighters.
Well, our next process doesn'tstart till January and those
positions won't be hired.
Speaker 1 (08:06):
And just to be clear.
I mean, that's our January'sstart, but this process started
three months ago.
Speaker 2 (08:13):
Right, we've already done interviews and Well,
because we thought we were goingto start the hiring sooner.
So let's say we were startingfrom scratch.
Speaker 1 (08:19):
All right, let's go theoretical.
It's January.
Speaker 2 (08:22):
January we start the testing process.
Speaker 1 (08:24):
Yeah.
Speaker 2 (08:25):
And we think we'll be done by June and ready to hire
people by July.
So when we're forecasting thosepositions in the budget, we
include the salary for July,august and September only.
Speaker 1 (08:35):
You don't include those budget, those salaries in
January.
Speaker 2 (08:39):
If they're vacant, no , and then we don't budget for
all of them if we don't thinkthat we can have a class or
enough people that will fillthem.
So some of those vacantpositions get a zero budget
associated with them.
Speaker 1 (08:53):
So why are people saying that we're padding the
budget with positions that wedon't have?
Speaker 2 (08:59):
I'm not sure, maybe just misunderstanding or
applying somebody else'smethodology to our budget.
We also have a cadet academythat has 50 positions associated
with it.
But we do the same thing withthat.
If we're not going to have anacademy or if it's not going to
start whenever it's going tostart, however long we think
it's going to be filled, we onlybudget, let's say, for half the
(09:19):
year if it's a six-monthacademy and we think it's going
to start in January again, ifit's a six month academy and we
think it's going to start inJanuary again.
But then we also build in someattrition because we start with
a 50 person class but not all 50people always make it through.
So again, we don't budget forthat whole amount, we reduce it.
Now, does it happen that wethink we're going to have 50 and
(09:40):
we are going to be able to fill50 and then we only get 40, or
same thing, with just vacancies?
We think we'll be able to fill30 of them, but we only found 20
people that were qualified ormade it through the process.
That happens.
And so we do have personnelsavings On the administrative
side.
People leave, people retire andwe don't foresee that.
You know it happens, but theturnover in admin is not that
(10:02):
high and there's not that manyof us in admin.
Speaker 1 (10:04):
Right, probably not as big of a deal as it is with
the firefighters.
Speaker 2 (10:07):
Right.
So there are personnel savingsthat happen, but we do our best
to make it as accurate aspossible based on the facts we
have at the time.
We don't just budget for thepositions to then have personnel
savings to use for other things.
Speaker 1 (10:21):
We don't do that Well another big topic that you can
help us out with is people liketo talk about the reserves and
how there's $57 million inreserves.
Can you break this down, comingstraight from you what's
happening with our reserves?
What do we got?
Speaker 2 (10:39):
So that $57 million that has been used is our net
position or net asset.
So if you go onto thedistrict's website,
flugervillefireorg, there is afinancial transparency page and
towards the bottom of the pageyou can pull up our audit from
fiscal year 2023.
And if you turn to page nine ofthat audit, you'll see that $57
(11:00):
million at the bottom of thepage.
On the top of the page it'slabeled statement of net
position and governmental fundbalance sheet, and so I know
everybody's thrilled to talkabout accounting and what a
balance sheet is.
Balance sheets are your assetsand your liabilities.
So assets is basically anythingof value, which includes our
cash reserves, but it alsoincludes our buildings and our
(11:20):
fire trucks and anything that wehave that is of value.
And then net assets or netposition tells you net is
meaning means that something wasdone, there was a calculation
done to that number, and so itsubtracts our liabilities from
that, and so what you're seeing,the net position, is kind of
the health of the district orwhat our net like how much more
(11:41):
assets do we have thanliabilities?
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 fromthe previous year, plus our
revenue, minus our expenses andwhat that's going to be left
over at the end of the year.
So our fund balance.
Speaker 1 (12:00):
Whatever revenue didn't get spent from the last
year gets pushed into the nextyear's budget, and then you can
lower taxes or whatever you cando from there.
Correct?
Speaker 2 (12:11):
And the amount of reserves that we have and how
much we should have is the otherbig conversation piece.
Speaker 1 (12:19):
Let's start with what we do have.
Speaker 2 (12:21):
So the projected amount of reserves for this year
in our operating budget isaround $32 million I believe I
don't have the number right infront of me, but that's just on
the operating side.
We will have additional fundsleft over on our capital budget
side because we took out a largeloan for a capital project that
will continue through next year.
So we've got still some loanmoney left that's about to be
(12:43):
spent over the next couple ofmonths.
So our actual ending balance isgoing to be higher than that.
Speaker 1 (12:47):
But from an operational perspective, what we
call our reserve balance that'swhat we're talking about and
that's another thing to pointout 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 thecapital expenses.
But that's exactly what that is.
That isn't tax money.
That was hoarded, right.
Speaker 2 (13:06):
No, and we, you know you kind of pointed out that if
we have reserves above what ourreserve requirements are, which
our board has just adopted asix-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 toreduce how much our property tax
(13:29):
rate would need to be raised by.
When you look at the propertytax rate that was adopted by the
board for next year, it'shigher because of this threat of
potentially losing sales taxrevenue.
So the board's being proactiveto try to increase those
reserves to give us more time incase the sales tax revenue gets
taken away from us in theelection.
(13:50):
We have a little bit morefunding to cushion us, to give
us more time to make whatevermoves we have to make to address
that funding shortfall.
Speaker 1 (13:59):
So the tax rate that has been adopted by the board is
a direct result of the effortto reduce the sales tax revenue.
Yes, all right, so we are.
Let's say, let's go part two ofour reserves.
We talked about kind of what,what we have, what number did we
settle on?
(14:19):
and you're off the clock so youdon't have to.
Actually, it was 32 millionbucks, I think.
So think so, all right,somewhere in there.
Yeah, jessica's not gettingpaid right now, so she doesn't
have to know it off the top ofher head.
Why do we need?
Why do we need reserves?
Why go to a six month reserveinstead of keeping it at three
months?
Speaker 2 (14:36):
So reserves are a risk management tool.
So it's a way for it's ashort-term solution for an
immediate problem, and therehave been a number of examples
of immediate problems thatrequire us to have reserves, the
main one is any kind offinancial instability.
(14:57):
So in the last couple of yearswe've seen record levels of
inflation, the costs ofeverything have increased, and
so those reserves allow us tokind of ebb and flow with
something that's beyond what wehave budgeted.
There are also we've, you know,just gone through COVID, you
know, winter storm Uri all ofthose situations require us to
(15:18):
spend more money than normal tobe able to respond to these
extraordinary situations, and soit allows us to be able to buy
face masks and gloves orwhatever we needed for COVID,
and just focus on the missionand making sure that we're there
to help people.
Same thing with Winter StormYuri Call everybody in,
everybody in overtime.
(15:38):
When I looked at some of thetimesheets and the things, I'm
amazed that some of you guys arestill standing, because the
amount of hours that y'allworked it was just insane.
But you answered every singlecall.
There was a thousand calls in aweek and normally you have a
thousand calls over the courseof a month, and so just that
incredible ability to respondand have those resources
(15:59):
available.
That's part of the other reasonwhy having reserves is
important, because we don't haveto stop and think how are we
going to pay for this.
We do it.
We do what we have to do and weknow we have reserves there if
we need them or when we needthem.
There are other huge thingsthat can happen If a tornado
rips through the middle ofPflugerville, which has happened
back in the day I was first inon that call yeah.
(16:25):
If something happens, where thathappens, we have to respond to
it and there's costs associatedwith that.
But then if you think about theloss of property, if it got
really bad and a bunch of homesgot destroyed, then that would
impact our property tax revenuethe next year.
So, again, having thosereserves will help us to
continue on, because the callsare not going to stop because
(16:45):
there's an emergency or we, orif we ran out of money, it's
still our responsibility andnobody's.
It's our responsibility to makesure that we're stable.
We're a standalone entity andnobody's coming to help us.
It's up to us, and so that'swhere the last we have that flag
in the flag in the boardroom.
Speaker 1 (17:05):
It's actually up in the inspections office now.
Speaker 2 (17:08):
Is it?
Speaker 1 (17:08):
Yes, it says 30 seconds out.
No one else is coming.
And we talk about all the timewith our recruits.
You know, people dial 911 andthen we can't turn around and
dial 912.
It's just up to us.
Speaker 2 (17:24):
And it's.
You know, I'm in finance and soI'm not the one that's going
out there.
I'll be calling 9-1-1 andexpect 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 heavyresponsibility on our shoulders.
This is the other reason why wethis is the other reason why we
(17:46):
want to make sure that we arethere when we need to be there,
and that's the reserves.
Speaker 1 (17:49):
Help to make sure that we can do that.
Yeah, I mean you think abouthow many different crises
there's been just since youjoined the department, and I
don't think we've dropped theball on any of them.
Speaker 2 (18:02):
I don't think so either.
I we've been there, we figuredit out.
I don't think so either.
Speaker 1 (18:06):
I we've been there, we figured it out, unlike some
other people, and I and thisthis shows not to disparage
anybody, but I personally sat ona cardiac arrest waiting for um
other officials to get therethat didn't have four wheel
drives or snow chains and justcouldn't get to us.
Yeah, and we didn't have thatproblem, okay, okay.
(18:30):
So why would we need to thenclose stations?
If Prop A is passed and peoplevote yes on it, which everyone
has the right to vote, howeverthey think, as long as you
understand that that's takenaway sales tax revenue, why is
it such a big impact?
Speaker 2 (18:46):
So part of the conversation has been because we
have these reserves, we canafford to just continue.
But I started out by sayingreserves are a temporary
solution to what would be apermanent problem.
We can't hope, cross ourfingers and think, okay,
someone's going to.
We just got through talkingabout the fact that who's going
to help us, right?
So temporarily we can use thosereserves to fund but once
(19:10):
they're gone, they're gone andthe costs for those stations, if
our sales tax gets taken away,how does that reduce our
expenses?
So we have to find a way toreduce our expenses Got to cut
service.
The bit we talked about earlier.
I think it's at 70% of ourbudget.
(19:32):
Our operating budget issalaries and benefits.
So even if we only paid forpeople and their benefits, it's
not going to be enough to reducethe budget enough to be able to
fund our operations as theystand now.
We are going to have to reduceour operations as they stand now
(19:52):
and again, if we don't havestaffing to fill stations, then
we have to redeploy that andclose stations.
We have less people to fillthem.
We have to have less stations.
We could stop every othercapital project and everything
else and the cost of thoseprojects are debt funded, so we
(20:14):
still have to pay that debt.
Or even if we sold, like thosetwo things would basically net
each other out and we'd still beleft with okay, we have to pay
all these people and we have topay for all of this operational,
you know, to have ouroperations.
What else?
What else is there?
What else can we do?
Speaker 1 (20:31):
Yeah, wow, okay.
So, we promised our listenersbroad brushstrokes.
We talked about the expensesour FTEs reserves and why we
might have to close stations.
I know you're sitting here as acitizen of the ETJ and someone
that has heard a lot of noise.
I don't know any messages forpeople out there that haven't
(20:54):
made their decision on which wayto go, or I would just say that
, yes, I'm a resident.
Speaker 2 (21:00):
This would impact me, just like I'm a taxpayer, just
like everybody else.
I think that my focus is onfacts and things that you can go
to our audit.
You can look at these things.
I can explain to you ourmethodology.
You can go and look on ourfinancial transparencies page to
look at our financial policies,which govern or drive how we
(21:22):
forecast, how we budget.
But as a just a professional, Itake 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 beinghonest and being transparent and
not trying to confuse people,and so that's what I've tried to
(21:43):
focus on is these are thenumbers.
I can explain to you the intentbehind them, and others might
have a difference of opinion ofhow our finances should be run,
and that's okay.
But ultimately, our board andour fire chief and myself and
everybody else on you know thatworks for the ESD2, we're the
(22:05):
ones that have to live andbreathe and live with these
decisions and so far, I thinkwe've done a really great job.
We have an amazing firedepartment.
Think we've done a really greatjob.
We have an amazing firedepartment and a lot of that is
built on this financialstability that we have.
That started with Chief RonMullenberg and we've carried
forward those tenants and we'vebeen very successful and I think
(22:26):
we are a great asset to thecommunity.
And so, personally, it troublesme to think that that might
have to be torn down, for lackof a better word.
So I just hope that folks areable to focus on the facts and
get educated about what the realimpacts are, even though they
(22:49):
might not fit someone else'snarrative.
There will be seriousconsequences if we lose our
sales tax revenue.
Speaker 1 (22:58):
Well, Jessica, you took your private time out to
talk to our listeners and wesure appreciate you and
listeners.
Thank you so much for gettingeducated 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
(23:20):
what's going on.
Speaker 2 (23:20):
So we thank you very much for coming on the show.
Sure Thanks for having me.
Speaker 1 (23:26):
Thanks for tuning into this week's episode of
Pflugerville on fire.
I really appreciated theopportunity to get to talk to
Jessica and for her spending hertime 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 thethings that people wanted to
talk about.
You know why did the expensesgo up?
(23:47):
Are you know, a lot ofaccusations of staffing people
in the budget that weren't thereand a lot of questions about
the reserves.
So I feel pretty good aboutbeing able to bring that
information to the listeners andhopefully you got some stuff
out of it.
Tune in next week.
We're still emphasizing thefinance homework assignment for
(24:07):
listeners out there.
Google Ray Perryman and,spoiler alert, that's who we're
going to have on the show nextweek.
So make sure you're tuning inand we'll see you on the next
episode of Pflugerville on Fire.
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