"Recession-Resistant": Another Perspective
Updated: Mar 11
This metric is easy to gather and measure and thus useful nationwide, but it cannot and does not account for the uptick occurring in the utilization of Frisco's social services organizations.
Another #1 for Frisco... but with some interesting notes to unpack. Be sure to read the above article for reference; then I have some thoughts on the metrics inside, which aren't exactly what they seem. "Most Recession-Resistant Cities – 2020 Edition" by Nadia Ahmed.
Being declared "recession-resistant" is undoubtedly good news, especially with the probability of impending downturn (which was signaling long before COVID-19, with consecutive years of big demands in the bond market and recent rate cuts by the Fed). Frisco is heavily dependent on retail strength; we are lucky that our massive retail districts are strong indicators when it comes to real estate, consumer confidence, and the local economy. Sales tax collection in Frisco is down per capita¹, compared to the last five years, and we must prepare for the possibility that continues.
The article measured the rainy-day fund of each state, to assess recession-weathering health for the impacted cities. I feel it's a better marker to also consider the strength of our city's capital reserve fund. Regardless of how healthy it is, money from the state of Texas "Rainy Day Fund" isn’t going to come our way unless there is a natural disaster like a Hurricane Harvey. So our own local “rainy day fund” is a more reasonable metric. This capital reserve fund is basically Frisco’s emergency savings account. Some background: Frisco City Council established the Capital Reserve Fund in 2008. By 2012, the fund was less than $2 million and we really had no policy for growing it. Several years later thanks to aggressive and strategic savings, the capital reserve fund has been over $10 million and sits today at +$8 million.² Having that capital reserve fund makes Frisco's financial picture stronger as a governmental body. But it doesn't translate into money in residents' pockets in case of a downturn. Possibly the most important thing to consider when looking at the "recession-resistant" grade we just received from SmartAsset.com is that the author considered data from 2018 and prior. None of the current economic or social factors were taken into account. Further, the social metrics were strictly fed and state data, not local.
Bear with me: The article assessed how many Frisco residents are "on social assistance," in other words taking some kind of money from the federal, state or county government via welfare programs. This metric is easy to gather and measure and thus useful nationwide, but it cannot and does not account for the uptick occurring in the utilization of Frisco's social services organizations. The local charities and houses of worship which provide community support via food, clothing, shelter, temporary assistance with expenses, healthcare, and children's supplies are all seeing increased demand, which is not reflected anywhere in this research.
I'm serving my second term on the City of Frisco Social Services and Housing Board, and have had a front-row seat to the changing needs of our community in recent years. Impending economic recession, municipal population growth, and a global epidemic threat that is soon to put a strain on North Texas healthcare and governmental resources are a perfect storm for Frisco. These three factors have the potential to combine to make life exponentially difficult for our most vulnerable residents, including our senior citizen population and those who have compromised immune systems or are experiencing financial difficulties.
If you can't afford to take time off work, you cross your fingers and send a sick child back to school because there is no one to provide childcare. Or you return to work with a fever and a cough before you really should, because you simply can't afford to burn that PTO. One sick person who is out and about in the community when they ought not to be will impact everyone. The health of the herd is reliant on everyone being able to make responsible health and wellness decisions without extreme fear of economic consequences. How confident a Frisco resident feels in the local safety net is a contributing factor to making these responsible heath choices. Private-sector solutions can continue to step up and fill in the gaps for our residents in need, but those need to be supported by the public sector from an infrastructural standpoint. I believe the government should equip or enable these organizations... and then get out of the way to let them care for others.
But timing matters: this structural support is needed now more than ever. It's good that 2018 data shows Frisco as "recession-resistant." Still we must remain diligent, and we must invest now in the support that will enable our local social services organizations to remain strong, serving as models for the rest of the state. Apologies... I didn't intend for this to turn into a white paper! But I feel strongly about matters of community health, and I saw some gaps in the original article which seemed to bear examination. I would be happy to discuss this further with anyone who wants to continue the conversation.
² City of Frisco CAFR, 2012, 2015, 2019