Fire chief: Financial model unsound, new funding sought
Declining revenues, rising costs and proposed annexations have forced officials with Travis County Emergency Services District No. 2—which serves Pflugerville—to take out more than $1 million in loans and reconsider the district’s entire financial structure.
“If this were presented as a business plan in the private sector, it wouldn’t be considered a sound financial model,” Fire Chief Ron Moellenberg said.
Finances have become so strained, Moellenberg said, that the district is even considering the creation of a second ESD—which would require voter approval—a move that would effectively raise area taxes.
The department is being squeezed from a number of directions, including a declining property tax base, rising call volume, one-time expenses associated with last September’s fires and the possibility of portions of the district being annexed by Austin.
“Costs go up, call volume goes up, money’s not as free as it was,” Moellenberg said.
Declining tax base
ESDs are primarily supported by a 10-cent property tax and a half-cent sales tax. Unlike cities, ESDs cannot adjust their tax rate above that rate to account for a decrease in the tax base, which is what ESD No. 2 now faces.
The taxable value in ESD No. 2 hit a high of just more than $6 billion in 2009, according to the Travis County Central Appraisal District. Since then, property values have declined by nearly $169 million, or about 2.8 percent.
As a result, property tax revenue for the district peaked at slightly more than $6 million in fiscal year 2010 but is estimated to drop to $5.7 million in fiscal year 2012.
While total revenue from taxes has remained relatively stable—revenue from the half-cent sales tax increased from about $2.7 million to $3 million between 2010 and 2012—it has not kept pace with expenses.
For example, tax revenue from fiscal year 2007 to 2008 increased by about $500,000. The following year, it increased by $800,000. Between 2010 and 2012, revenue differed by just $50,000.
To keep up, Moellenberg said the district has had to dip into its reserve fund, taking out more than $1 million between fiscal years 2011 and 2012.
“That’s not a sound financial model; you can’t keep drawing out of savings,” Moellenberg said.
Rising costs
At the same time as revenues have been slowing, call volume has been picking up.
Figures provided by the district show that year-to-year call volume has increased between 4 percent and 8 percent nearly every year since 2006.
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Funding
Posted by antiskeptic March 07, 2012 12:36:34
Funding Priorities
Posted by SkepticMedic February 24, 2012 19:48:41
Heres an idea
Posted by Marc February 24, 2012 15:38:00
Response to Great article comment
Posted by Andrew February 24, 2012 10:47:16