The Pflugerville Fire Department could be out of money in four years if it doesn't receive additional funding sources or have a drastic cuts in services, fire officials said.
Finance Director Jessica Frazier shared the bleak financial forecast during an annual strategic planning session on May 30 with the Travis County Emergency Services District No. 2, which funds and operates the Fire Department.
Frazier said the department has spent more than $200,000 in extra expenses due to the coronavirus pandemic. The costs were mostly related to overtime wages for firefighters covering for quarantined firefighters and additional personal protective equipment for firefighters and emergency medical technicians, she said.
Even without the impact of the pandemic, which could reduce the district's property tax base and cut sales tax receipts, the ESD could be looking at "financial calamity" in fiscal year 2024 as it accommodates increased growth in northeastern Travis County, according to a recent news release from the ESD.
Cliff Avery with the Fire Department said the economic downturn caused by the pandemic has put many people out of work, meaning fewer people looking to purchase property.
"That cuts the market and, eventually, the property values," he said, adding the true impact will be on next year's property values, which are set on Jan. 1, 2021.
"Another outbreak of COVID-19 in the winter could really hammer values," he said.
The district will also face limited revenue growth due to the Legislature restricting the local government's ability to increase revenues, the release said.
The financial report noted that the ESD is already at the maximum property tax rate — 10 cents per $100 of assessed value. This year's property tax and sales tax receipts were $12 million each, according to the report.
Fire Chief Ron Moellenberg said 70% of the Fire Department's budget is for salaries and benefits of firefighters, emergency medical technicians, fire inspectors and administrative staff.
"You can't cut the budget without cutting people," he said.
Officials said the district has spent years accumulating a reserve fund to handle financial downturns. At the end of the 2019, the unrestricted reserve was $9 million, which officials said is enough to cover about four months of its annual expenditures. The Fire Department has a $27.3 million annual operational budget, Avery said.
The ESD has received more than $43,000 in grant funding from the U.S. Department of Health and Human Services, according to the release, as a portion of the federal government's COVID-19 stimulus package.
The district also has applied for a $45,839 grant from the Federal Emergency Management Agency and will request reimbursement from FEMA and the U.S. Department of Health and Human Services for coronavirus-related costs.
However, Moellenberg said federal outlays don't fully reimburse the fire department.
"You never recover all that you have spent and in many cases, what payments you do receive will take three years to get here," he said. "We're going to suffer a lot financially."
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