The “financial calamity” that never came
In 2020, ESD 2 warned it would hit a financial calamity and run out of money by 2024 unless it got more taxes. Its own audited financials tell a different story. Revenue and reserves went up every year, to record highs.
Forecast vs. reality
The “doomsday” projection, next to what happened
Here is the trajectory ESD 2 used to argue it needed more money, laid over what actually happened. Instead of sliding toward zero, its net assets climbed to a record.
View the data
| Year | Actual net assets | ESD 2's 'doomsday' forecast |
|---|---|---|
| 2017 | $18M | $16M |
| 2018 | $20M | $14.5M |
| 2019 | $25M | $14.5M |
| 2020 | $32M | $14.5M |
| 2021 | $41M | $13M |
| 2022 | $51M | $9.5M |
| 2023 | $57M | $4M |
Source: ESD 2 audited financial statements, budgets and forecasts.
A wrong forecast isn’t automatically dishonest. But this projection wasn’t just wrong — it was the basis for a tax push.
Why it matters
The shortfall was the pitch for more taxes
The “financial calamity” wasn’t an offhand worry. It was the justification for two attempts to pull more money out of residents and the City at the same time:
- A push to create ESD 17, a second taxing district layered on top of ESD 2, which would have raised property taxes on the same residents. Voters rejected it in 2021.
- A demand that the City of Pflugerville pay a $2.79 million annual subsidy — which an independent study found “unsubstantiated.”
In both cases, the argument was the same: we’re about to run out of money. The audited numbers show the opposite. Reserves were growing the entire time.
A shortfall was projected. It was used to justify a tax increase. When residents said no, the projection quietly failed to come true — and reserves kept climbing. The next time you hear “we’re running out of money,” check it against the audit first.
Where it ended up
Reserves grew well past any rainy-day standard
Governments should keep reserves. A healthy rainy-day fund usually runs about 25 to 30% of yearly operating costs, or roughly three months. Independent analysis found ESD 2 was sitting closer to 18 months, and its own 2024 budget put excess reserves above $25 million.
In September 2024, instead of treating that surplus as room to do more, the board voted to raise its reserve-fund target to six months, double the usual standard. In effect, that created a policy reason to keep collecting and holding more.
Revenue vs. reality
Tax revenue more than doubled in seven years
ESD 2 runs on two main taxes, a property tax and a local sales tax. Both rose steeply, well ahead of population growth.
View the data
| Year | Property tax | Sales tax |
|---|---|---|
| FY2016 | $8M | $9M |
| FY2017 | $9M | $10M |
| FY2018 | $11M | $11M |
| FY2019 | $12M | $12M |
| FY2020 | $13M | $14M |
| FY2021 | $14M | $17M |
| FY2022 | $14M | $20M |
| FY2023 | $16M | $20M |
Source: ESD 2 audited financial statements.
By ESD 2’s own reckoning, revenue per resident went from about $175 in 2017, the year it took on ambulance service, to about $450 in 2024. That’s a 157% jump per person, far faster than Pflugerville grew.
When revenue outruns both the population and the number of calls, it usually points to one of two things: the district is collecting more tax than the service needs, or it isn’t delivering at the level it’s budgeting for. The independent studies pointed to both.
Surplus vs. the ask
The surplus was bigger than the cost of ambulance service every year
ESD 2 said it couldn’t keep running Pflugerville’s ambulances, a cost of about $1.7 million a year, without more tax money. Its own surpluses say otherwise.
View the data
| Category | Surplus after removing ambulance cost |
|---|---|
| 2017 | $3.9M |
| 2018 | $4.1M |
| 2019 | $6.4M |
| 2020 | $8.2M |
| 2021 | $11.4M |
| 2022 | $10.6M |
| 2023 | $6.0M |
Source: ESD 2 audited financial statements, budgets and forecasts.
In 2021, the year before it walked away from ambulance duty, ESD 2 cleared about $11.4 million after setting aside the full cost of the ambulance service. The service it said it couldn’t afford cost less than a sixth of the money it had left over.
How the cost compares
Even before any increase, the price is high for a district this size
ESD 2 covers roughly 160,000 residents across about 77 square miles of northeastern Travis County — not just the city. Measured against typical U.S. fire departments, its spending sits at the high end even before the latest ambulance increase.
| Measure | Travis County ESD 2 | Typical U.S. department |
|---|---|---|
| Residents served | ~160,000 (77 sq mi) | — |
| Total spending (FY2023) | ~$51 million | — |
| Spending per resident | ~$320 (all in); ~$220 operating | ~$100–$200 for a typical city (rough) |
| Staffing model | All-career | Only ~9% of U.S. departments are all-career |
| Cost per budgeted position | ~$140,000+ (payroll-heavy) | — |
| Share of calls that are fires | ~3% | ~4% (national) |
An all-career department costs more than the volunteer or combination model most of the country uses, so a larger budget is expected. But even against that, ESD 2’s spending per resident runs above a typical city’s — and it still posts multi-million-dollar surpluses. The question isn’t whether firefighters cost money. It’s whether residents are already paying more than a district this size should cost, before every new increase.
Sources: ESD 2 FY2023 financials; U.S. Census Bureau Annual Survey of State & Local Government Finances (per-capita, rough, Census-derived); NFPA U.S. Fire Department Profile; USFA fire department run profile. National figures are averages for context, not legal requirements.
The independent verdict
Two studies the City paid for reached the same conclusion
The City of Pflugerville hired AP Triton, a national fire and EMS consulting firm, to look under the hood. Here is what they found, in the firm’s own words.
The verdict
“Travis County ESD No. 2 provides service that meets or exceeds all fire service and EMS response standards, [but] their financial crisis is self-imposed and the need for $2.79 million from the City of Pflugerville to subsidize services is unsubstantiated.”
The findings
- Cost savings can be achieved through cooperation and efficiencies.
- High staffing levels do not improve the quality of service delivery.
- Existing facilities and equipment are underutilized.
- The District holds excess revenue and its projections inflate reserve balances.
AP Triton’s recommended path was for ESD 2 to keep running the ambulance service while cutting waste. ESD 2 declined to look at cost reductions. There’s more in the ambulance story.
See the full year-by-year revenue, expense & staffing table
| Fiscal year | Property tax | Sales tax | Total revenue | Total expenses | Budgeted staff (FTE) |
|---|---|---|---|---|---|
| FY2016 | $7.9M | $8.9M | $19.1M | $16.4M | 110 |
| FY2017 | $9.4M | $9.6M | $22.3M | $19.9M | 127 |
| FY2018 | $10.5M | $10.6M | $29.6M | $23.6M | 152 |
| FY2019 | $12M | $12.3M | $29.7M | $31.2M | 175 |
| FY2020 | $13.1M | $13.7M | $34M | $31.5M | 192 |
| FY2021 | $14.1M | $16.7M | $36.1M | $35.2M | 194 |
| FY2022 | $14.3M | $19.9M | $47.3M | $34.3M | 289 |
| FY2023 | $16.2M | $20.3M | $47.4M | $51.2M | 330 |
| FY2024 est. | $17.5M | $20.6M | $76.5M | $59.5M | 338 |
| FY2025 prop. | $21.5M | $21.6M | $53.7M | $72.9M | 351 |
FY2024 is an end-of-year estimate and FY2025 is the proposed budget. In some years, total revenue and total expenses include one-time items such as bond or loan proceeds and capital projects, which is why those lines swing more than the tax lines. Source: ESD 2 audited financial statements and adopted/proposed budgets.