Travis County ESD 2 commissioner: Pflugerville-sponsored financial audit not completely accurate

Though a third-party audit of Travis County Emergency Services District No. 2 concluded the district is in much better financial shape than it had previously reported, district commissioners said the firm that conducted the audit was not completely accurate in its findings.

Pflugerville City Council commissioned the audit from AP Triton, a consulting firm specializing in service delivery methodology and practices for fire and emergency care services.

With cooperation from ESD 2 over the course of several months earlier this year, AP Triton dug into the district's staffing, equipment, facilities and other expenditures.

Pflugerville officials said the audit was necessitated by a request from ESD 2 to the city for a $2.793 million annual subsidy for emergency medical services.

Without this subsidy, ESD representatives said they would no longer be able to provide EMS and ambulance services by 2024 without dipping into reserves.

On June 21, Rich Buchanan of AP Triton presented the audit's findings, which concluded ESD 2 does not need an annual payout of $2.793 million that it requested from the city.

What the audit said

In a nutshell, the report from AP Triton stated the district's financial crisis is "self-imposed."

In addition to examining numerous sources and data sets, the audit also included interviews with representatives from ESD 2.

"We looked at all of their facilities, and we visited their facilities," Buchanan said June 21. "Then we wanted to look at their finances, and they provided all of their finances."

As part of the report, the audit examined call volume-to-staff ratios in concert with project population growth and community need.

The report concluded there is no immediate danger of the district being understaffed or of staff suffering burnout.

When factoring in the amount of sick and vacation time used by ESD 2 staff, Buchanan said for 2020 the district's 139 employees were actually 17 over the total number of 122 needed to run the district.

Additionally, Buchanan said the district's financial reserves went from about $10.2 million in 2016 to almost $19.6 million in 2020.

He speculated to Pflugerville officials that perhaps the district's projections of its financial reserves being depleted by 2024 did not account for an overestimation of the fiscal costs of the COVID-19 pandemic.

The audit also stated the district's EMS billing revenue should be further reviewed to evaluate improvement opportunities in billing and collection practices.

Finally, the audit concluded the district's current annual revenue projections fall at least $2 million short of its true financial situation beginning in 2021.

What ESD 2 says

April Griffin, a commissioner for ESD 2 who also serves as its assistant board treasurer, said Pflugerville has essentially been receiving EMS and ambulance services for free for the last four years.

As a taxing entity, ESD 2 is only set up to receive revenue for its fire and rescue services, she said.

Griffin noted the AP Triton audit was based on operational procedures from municipal fire departments, not ESDs. In other words, she said it was not an apples-to-apples comparison.

As one distinction, Griffin said municipal departments have the ability to go into debt or request additional funding from the city governments that oversee their budget allocations.

ESDs, however, are largely limited to a maximum of the $0.10 they receive through property tax revenue and can sometimes be supplemented with sales tax revenue, she said.

At least at ESD 2, Griffin said all expenditures and revenue are balanced with what it costs to operate the district. That includes staff, stations, equipment and any needed capital improvements.

"All of our revenues go toward our full, total operation," she said.

Furthermore, the state's SB 2, which caps property tax revenue year over year at 3.5%, is another obstacle toward budgetary savings, she said.

Additionally, Griffin said first responders at ESD 2 are not limited to one function during an emergency call.

Using a major car crash as an example, Griffin said it is not realistic to just send an ambulance and expect the situation to be handled.

"It’s a big event. Most of our people are at the scene for maybe an hour to get everything coordinated to make sure everyone who needs it is taken care of," she said. "We are operating from an emergency response perspective. We are the ambulance, and we are the firefighters and rescue response, and we need to be sufficient to handle all areas of any given emergency call."

With regard to payroll expenditures, Griffin said AP Triton's assessment that ESD 2 could easily reduce its staff and still handle call volume stems from a philosophical difference regarding first responder department operations.

"Specific to staffing, they noted we are overstaffed or sent too many team members out to calls," she said. "For us, what we do is we try to account for our staffing in the sense of not having burnout. The last thing you want is someone who is overly tired, or who is burnt out from overwork. So when they say you only need this many staff to respond, that is not necessarily true."

As it pertains to ESD's billing practices as an avenue toward creating more revenue for the district, Griffin said ESD 2 commissioners are looking into that, but there are pitfalls toward that endeavor.

Pflugerville has a high rate of poverty that must be taken into account before demanding payment from people who simply cannot pay, she said.

"I’m not sure the revenue that AP Triton has identified that we could bill for is actually recoverable, but we will definitely look into any revenue that should be recovered for services provided," she said.

Moving forward

The day after AP Triton presented its audit findings, Pflugerville City Council decided to send a letter requesting EMS through ESD 2 be extended through Sept. 30, 2022.

"I think that's fair, and it doesn't ruin the spirit of what we're trying to do here," Council Member Rudy Metayer said June 22.

That same day, council also stated it would take action on EMS for the city July 13, which is when the next regular City Council meeting will take place.

Whether or not that decision includes retaining services from ESD 2 remains to be seen.

With regard to extending EMS for Pflugerville to Sept. 20, 2022, Griffin said it is not possible for ESD 2 to make that decision prior to the district's next board meeting July 15.

However, the ESD 2 board is holding its annual planning summit July 8-10 to establish the district's strategic plan with regard to its budget and other matters.

Griffin said they have invited members of the Pflugerville City Council and officials from Travis County to attend and added the district remains committed to continuing negotiations.

On July 1, the city of Pflugerville issued a statement to Community Impact Newspaper, stating council members will attend a strategic planning meeting hosted by ESD 2 on July 9.

"We want to work with the city, and we want to provide the city the EMS/ambulance services," Griffin said "It’s not free, though."