City, fire officials consider funding options

What happens when the agency tasked with being the first to respond to emergencies sends out a distress call of its own?

In Pflugerville that scenario has been unfolding for more than a year as the leadership of Travis County Emergency Services District No. 2—also known as the Pflugerville Fire Department—says the department has become underfunded, understaffed and overwhelmed by the volume of emergency calls it is being asked to respond to.

"The problems that we have faced and identified have not improved," ESD No. 2 Fire Chief Ron Moellenberg said. "The answer to that is more fire stations located inside the community. We can't afford to do that, so we have to make do with what we have."

By simply making do, Moellenberg says the department is falling into a pattern of failing to meet national standards for emergency response times. For example, in urban areas with a population density of more than 2,000 people per square mile, the department is expected to respond to emergencies in 6 1/2 minutes or less. According to ESD No. 2's most recent data, the department is only meeting those goals 54 percent of the time.

The district's footprint, however, extends well beyond Pflugerville's city limits and includes approximately 77 square miles of urban, suburban and rural territory containing more than 100,000 residents. Districtwide, the department says it is only meeting its response goals 56 percent of the time.

"Our rate-of-service demand is increasing far more than the rate of revenue," Moellenberg said. "I'm trying not to lose any more ground than I have now."

History of service

Unlike its neighboring cities of Austin and Round Rock, the city of Pflugerville has never operated a municipal fire department.

The city's fire protection protocol, in fact, has taken on numerous forms as Pflugerville has evolved from a rural farming community into its current status as Travis County's second-largest city. In 1955 the original Pflugerville Fire Department was created, and for the next 30 years it operated as a volunteer organization dependent on donations and fundraisers to fund its equipment and facilities. By 1985, the city had outgrown the capabilities of the volunteer department model, and residents voted to create a rural fire protection district funded through a 3 cent property tax. The tax allowed the department to hire paid staff to augment the volunteer firefighters.

"It brought an answer to how you provide funding outside of bake sales and barbecues," Moellenberg said.

By the late 1980s, however, the challenges of providing not just fire protection but also emergency medical services had become a concern to rural communities throughout Texas. As a response, in 1987 the Texas Legislature proposed a constitutional amendment—which voters approved that same year—allowing the creation of emergency services districts. The ESDs opened new revenue streams for rural fire and medical responders, allowing the districts to tax property owners up to 10 cents per $100 of valuation.

In 1992, voters approved the creation of ESD No. 2 with an accompanying 5 cent property tax. Eight years later the rate was raised to the maximum-allowed 10 cents, and in 2001 the district began collecting a 0.5 percent sales tax on purchases within the city of Pflugerville and Austin's unincorporated Wells Branch area.

Similar to Pflugerville's model, the remaining portions of Travis County outside of Austin's city limits have also established ESDs as their basis for fire and medical response services. Fourteen ESDs now operate in the county, providing service to more than 275,000 residents.

Funding challenges

From 2000—when ESD No. 2 reached the limits of its property tax rate—through 2010, the city of Pflugerville's population nearly tripled, according to census data. In recent years, the strains of that population pressure have begun to exhibit cracks within the ESD's funding structure, according to city and county officials.

"Obviously the ESD financing mechanism is flawed," Pflugerville City Manager Brandon Wade said. "[ESD No. 2] takes in over $12 million [annually] right now, but they still can't seem to pay their bills."

According to data compiled by ESD No. 2, making up the department's shortfalls in service would require adding at least 21 new employees and three fire stations. The estimated cost for the recommended personnel, equipment, facilities and training totals more than $23.9 million, in addition to hundreds of thousands of dollars in annual operating expenses.

ESDs, however, are limited to budgeting within the revenue they receive through property and sales tax collections. In contrast, municipal departments are able to rely on funding from city taxes—which are not capped—and can call bond elections to fund new fire stations or training facilities.

"We have the ability as a city to raise taxes, as opposed to an ESD that is locked down," Round Rock Fire Chief David Coatney said. "[Municipal departments] have a little bit more flexibility."

In an attempt to bridge their service gaps, ESD No. 2 officials have sought out a variety of funding solutions. In early 2013, the department proposed the creation of an overlay district—tentatively referred to as ESD No. 2A. The proposal would have created a new taxing entity to fund medical response services separate from firefighting services. Pflugerville's city leadership, however, opposed the plan, which would have allowed the new district to collect up to 10 cents of additional property taxes. In February 2013, Pflugerville City Council denied ESD No. 2's request to call a municipal election regarding the creation of ESD No. 2A. As a result, the Travis County Commissioners Court concluded the overlay district would not be feasible without Pflugerville's tax base and subsequently called off the election plan.

With its hopes of creating a new property tax base eliminated, the district has continued its search for funding in other areas. On Feb. 13, the ESD No. 2 board of directors called a May election requesting voters in the district's unincorporated areas approve a 0.5 percent sales tax increase. Again, however, the plan has met with disapproval from Pflugerville officials, who say the proposal would take away economic development funding that could be used to attract new businesses and increase the city's tax base.

"This plan, in my opinion, is nothing more than a way to steal taxpayers' dollars," PCDC Executive Director Floyd Akers said. "The results could be tragic and not in the best interest of current and future residents."

Future model

The question of ESD No. 2's future viability remains unanswered.

The decision, however, of the ESD No. 2 board to call a sales tax election appears to have invigorated discussions about future collaboration between Pflugerville and the department. Among the options being explored are creating a proposed countywide fire department, creating a Pflugerville municipal fire department, or establishing interlocal service agreements between the ESD and city.

Danny Hobby, Travis County executive of Emergency Services, has begun formulating a plan that could eliminate Travis County ESDs in favor of a single county entity that would oversee all of the service areas outside of Austin. The advantage, he said would be the removal of the 10 cent tax limit and the ability to share resources.

"If [Travis County ESDs] became a county fire department, no longer would the district be issuing the tax, the county would," Hobby said. "It looks like it would answer some of the concerns of sustainability."

Hobby, however, said he favors the city of Pflugerville working with ESD No. 2 to create a municipal-based department.

"With the size and growth of Pflugerville, those two really need to be married together—regardless of whether I have a plan over here or not," he said.

Wade said the city plans to explore all of its options—although he feels ultimately some form of a municipal department will be necessary as Pflugerville approaches a final build out population expected to exceed 200,000.

"As far as I know, there is not a pattern to go by here. It is going to require we actively work together," he said. "But I'm not talking about a municipal department by the end of the calendar year. I am talking about within the next decade."

Wade said he is looking into a "Round Rock model" in which the city would operate a municipal department and contract with the ESD to provide services in the unincorporated areas surrounding Pflugerville. In that scenario, ESD No. 2 would exist only on paper, collecting tax revenue for the purpose of augmenting the city's municipal department.

Regardless of the final plan, for the first time in more than a year both ESD No. 2 and the city of Pflugerville are stating that both are willing to work together on a common solution to the area's emergency services needs.

"At some point in time, this district and the city of Pflugerville will be one in the same or at least very close partners," Moellenberg said. "It gets down to a control issue—who controls the tax purse and who [runs] the show. Sometimes egos don't come together very well in that regard."