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Builders
utlook
2013 issue 10
Housing Recovery Picks Up Steam Despite Persistent Headwinds With home prices and household formations rising and household balance sheets healing, the ongoing housing recovery is expected to gain momentum next year even as several challenges remain, according to economists who participated in yesterday’s National Association of Home Builders (NAHB) Fall 2013 Construction Forecast Webinar. “The cards are in play for a decent and fairly strong recovery in 2014 and particularly in 2015,” said NAHB Chief Economist David Crowe. “From the standpoint of GDP growth, housing has been a plus, growing at two, three and four times the rate of the rest of the economy in recent quarters.” Helping to spur the housing rebound was a double-digit increase in home prices over the past year, driven in part by tight inventories of new and existing homes for sale and gradual gains in employment. “We expect to see price increases moderate in the next few years as we see additional inventory on the market and investors back away as the bargains disappear,” said Crowe. Another bright spot is rising household formations that were delayed during the downturn as college graduates and young professionals were forced to move back in with their parents or double up as roommates. At the height of the housing boom, the U.S. was producing 1.4 million additional households every year. That figure plunged to 500,000 during the depth of the recession and today is now back up to 700,000. Meanwhile, households across the nation have been increasing their savings and shedding debt. “They’ve corrected a lot of excesses and feel more comfortable about moving forward,” Crowe said, noting that the University of Michigan Consumer Sentiment Index shows that the percentage of consumers who believe that now is a good time to buy a house is back up to levels last seen near the housing boom. However, Crowe cited several headwinds that are impeding the recovery. “Credit conditions are much tighter now, builders are increasingly facing labor shortages, lot supplies are tight, building material prices are rising, and
inaccurate appraisals are hurting home sales” he said. “You can’t charge more than you can get an appraisal for,” Crowe added. “Even though we are seeing price increases in labor, land and materials, 36 percent of builder recently said they had lost at least one sale over appraisals coming in below the cost of production.” A Solid Outlook NAHB is forecasting 924,000 total housing starts in 2013, up 18 percent from 783,000 units last year. Single-family production is expected to rise 17 percent this year to 629,000 units, jump an additional 31 percent next year to 826,000 and surpass the 1 million mark in 2015. NAHB is projecting that multifamily starts will increase 20 percent in 2013 to 296,000 units and rise an additional 10 percent to 326,000 units next year, which Crowe characterized as a normal level of multifamily production. Meanwhile, residential remodeling has returned to previously normal levels of the early 2000s and remodeling activity is expected to register a modest gain this year over 2012. “Our Remodeling Market Index has been above 50 for three of the last four quarters, indicating that remodelers feel things are going better,” said Crowe. “Remodeling did not fall as much, so it does not have as much ground to make up.” Dodging a Bullet Regarding the uncertainties emanating out of Washington over the government shutdown and the impending Oct. 17 deadline when the government will run out of cash to pay its bills, Mark Zandi, chief economist at Moody’s Analytics, expressed optimism that Congress will move quickly to resolve these critical issues. “I truly anticipate that lawmakers will get it together, but that is definitely a challenge to my economic outlook,” said Zandi. “If policymakers can’t get it
together by Oct. 17, we’re toast, and I think we are going into recession.” Assuming the government meets these challenges, Zandi cited three reasons for optimism moving forward. First, the fiscal drag that is weighing heavily on the economy in the form of tax increases and government spending cuts that are now being implemented will continue to fade in the coming years. This fiscal drag will shave 1.5 percent off of GDP growth this year, about 0.7 percent next year and gradually fall to zero by 2016, he said. Second, Zandi noted that the “private economy has done a marvelous job of reducing leverage and getting their balance sheets in order. American companies are in very good shape and they will do well going forward, with continued strong export growth. That will be a strong source of economic growth for a long time to come.” Finally, Zandi said that demographics make a compelling argument for a strengthening housing market. “In the current housing market, supply is running around 950,000 annual units,” he said. “In a normal economy, we should be producing 1.7 million units. That’s a big difference. We’ve already made a lot of progress in working off excess inventory. We won’t get housing construction up to 1.7 million quickly. The big problem in the next five years won’t be too much housing, but too little housing.” All Markets Are Local Looking beneath the national numbers, Robert Denk, NAHB’s assistant vice president for forecasting and analysis, noted a range of conditions across the country and differences among the states in the amount of distress suffered during the recession and the headway that is being made in recovery. Housing nationwide bottomed out at an average of 27 percent of normal production in early 2009.
The hardest hit states where production soared to unsustainable levels during the boom years -California, Nevada, Arizona and Florida -- bottomed out at 10 percent to 20 percent of normal when the housing bubble burst. In sharp contrast, better states that did not experience a huge production run up during the boom declined to 50 percent of normal production. “We’ve now gotten past the point where we are digging out of holes and repairing the carnage of the housing markets,” said Denk. “It’s no longer about the boom and the bust. Now it’s about the underlying [state and regional] economies and how that is supporting the housing recovery.” For example, while Texas and Florida have roughly the same number of mortgages, Florida had nearly five times as many foreclosures during the height of the downturn and today has less than double. Now that housing has entered a new stage in the healing process, local economic conditions are dictating the pace of recovery. “That’s why the bubble states are no longer in the bottom tier and have moved ahead of the industrial Midwest,” he said. The gradual and steady housing recovery now underway across the land will bring nationwide housing starts to 71 percent of normal by the fourth quarter of next year and 93 percent of normal by the end of 2015, Denk said. Leading the way will be oil and gas producing states Texas, Oklahoma, North Dakota, Louisiana, Wyoming and Montana; and Iowa, supported by agricultural commodities. In another way of looking at the long road back to normal, by the end of 2015 the top 20 percent of states will be back to normal production levels, compared to the bottom 20 percent, which will still be below 84 percent.
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2013 issue 10
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2013 issue 10
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Builders Outlook
President’s Message | Edmundo Dena
El Paso Disposal
President, El Paso Association of Builders
The GEICO commercial with the camel asks “what day is it”? The answer is hump-day, what we call mid-week or Wednesday. Well my friends, my presidency’s hump day was just a short few months ago and now I see the end of the year coming closer and closer. We have accomplished quite a bit during my term thanks to dedicated team that I’ve been lucky to surround myself with. Two months to go. Sounds like around the corner but we still have a lot to do. Both Ray and I along with Randy Bowling, Greg Bowling and Frank Torres will be in Austin for Texas Builders meetings in November, right before Thanksgiving. It’ll be my final “official” visit on behalf of the EPAB and I’m excited to go. We’ll have the election of officers and board at our November 12 meeting here in El Paso and we’ll welcome a new slate of officers at our installation in December. So while I think about all those things I want to remind you that we still have work to do. Politics, regulations and just getting through the mess we see from Washington affects us 24/7. As President I’ve gotten close enough to the action to know how important this association is and how relevant it has become. When you have coffee with your vendors or other builders ask them to join. We need them now more than ever, and so do you.
772-7495
Showroom: 2131 Missouri 915 • 533 • 6045
fax • 533• 6096
Thomas R. Brown, Owner
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2013 issue 10
Perspective
Ray Adauto, Executive Vice President EPAB
It has been a little more than 100 days since the new Mayor and City Reps took office. So far the perception of the public seems to be positive with a minor hiccup on the city budget and raising of city taxes. While the taxes were relatively small ($28 per year/$100,000) it was made clear that raising taxes does not sit well with anyone right now. For the newcomers (Mayor, Lilly Limon, and Larry Romero) who were pushed into budget reviews the lessons are harsh but lessons they will use every year they are on council. Now that the honeymoon is over the reality of the office is starting to settle in and so far it seems that the newbies are adjusting. We will see where they draw some lines in the coming months as issues surrounding the massive costs of moving city offices starts to be clearer and the search for a new City Manager begins. Joyce Wilson announced that she will be leaving the City Managers post when her contract expires in
First 100 days of city government, search for new manager begins
September of 2014. That’s actually a good thing for the city as termination would have cost several hundreds of thousands of dollars payout to Ms. Wilson, so by her resigning or completing her contract the only amount owed to her will be her contracted pension of $60,000 a year for life. (I need to find out who her agent is). One thing is certain; our version of the Iron Lady has done a good job transitioning the city from strong mayor to city manager type of control. My perception is that while not all of her moves have been good for us I would challenge anyone to have done better given who she had to work with on City Council and in the Mayor’s seat. Ms. Wilson was directed by selfserving interests and that put some real pressure on her since her position reports to City Council. I would ask that as you review her job you remember who she answered to. We will work with the new council and Mayor to ensure that the next City Manager understands the importance of a strong
new home construction industry in El Paso. We will be vocal in our choice and we will serve notice to that. The last quarter of the year is upon us and soon we will have a new sitting President and Board of Directors. I would like to thank all of those members who have agreed to lead this association. It is not a task that is easy and one that carries risk by the mere fact that the Board is the responsible party who puts their neck on the line for the association. Our leaders are good leaders and fortunately we have good people to choose from. At the November board meeting the 2014 Executive Officers and Board will be elected and on December 13 those same members will be installed to take over the reins on January 1. What an exciting time for the association. I’d also like to thank the following members for their service on the Capital Improvements Advisory Committee for impact fees, working with PSB and other city agencies. Bobby Bowling, IV, Mark Dyer, Sal
Masoud and I have been on this board since 2008. Bobby and I will be termed out this month along with a couple of other appointees. Bobby served as chairman and frankly was the one person we all turned to with questions on the state law governing this committee. He knows his stuff and proved once again that involvement is the key to understanding and to being on top of issues dealing with the law. He is one smart guy and every builder, developer and vendor owes Bobby a really big round of thank you’s for his unselfish job on the committee. Well done Bobby. Finally I’d like to say thanks to all of the dozens of members who continue to make this year a very productive year for the association. We still have November and December but if it wasn’t done by now we’d be left in the dust. Thank you again, see you at the Halloween bowling event and the upcoming Pro-am golf tournament.
2013 issue 10
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Industry News NAHB Estimates Sept. Housing Starts will Approach 900,000 Units From NAHB
Builder confidence in the market for newly built, single-family homes fell two points in October from a downwardly revised reading in the previous month to a level of 55 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released in October. “Builder optimism remains above 50 and we are still seeing signs of pent-up demand in many markets across the country,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “This slight dip in builder sentiment is the result of continuing challenges in the marketplace with regard to the cost and availability of labor and lots and uncertainty in Washington” “A spike in mortgage interest rates along with the paralysis in Washington that led to the government shutdown and uncertainty regarding the nation’s debt limit have caused builders and consumers to take pause,” said NAHB Chief Economist David Crowe. “However, interest rates remain near historic lows and we don’t expect the level of rates to
have a major impact on sales and starts going forward. Once this government impasse is resolved, we expect builder and consumer optimism will bounce back.” Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current singlefamily home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. All of the HMI’s three components each fell two points in October. The component gauging current sales conditions registered 58, while the component gauging sales expectations in the next six months posted a reading of 62 and the component gauging traffic of prospective buyers was 44. Looking at the three-month moving averages for regional HMI scores, the South held steady at 56, the West declined a single point to 60 and the Northeast fell three points to 38. The Midwest posted a one-point gain to
64. NAHB Estimates Housing Starts Approach 900,000 Units in September ** With the partial shutdown of the federal government preventing the U.S. Census Bureau from releasing a housing starts estimate for September, NAHB has prepared its own. NAHB estimates that the seasonally adjusted annual rate of construction for singlefamily homes was between 620,000 and 630,000 units in September. NAHB estimates that the pace of construction of multifamily units was an additional 255,000 to 270,000, bringing the anticipated pace of total housing starts in September to between 875,000 and 900,000 units. “The NAHB estimate of 875,000 to 900,000 total housing starts is based on continuing improvement in single-family starts and ongoing volatility in multifamily construction,” said Crowe. “Single-family starts dipped in July but rebounded in August, and we expect continued strength in September,” Crowe added. “The Fed meeting in mid-September provided additional relief to builders and buyers that interest rates would remain near
historic lows for the immediate future, encouraging consumers back into the housing market. “Meanwhile, multifamily starts have been unusually volatile since the beginning of the year, swinging between 250,000 and 400,000 units from month-to-month. We expect some bounce back from the August pace of 263,000 as multifamily starts continue to trend around 300,000 units.”
New Index Shows Housing Markets Back to Normal in 52 Metros Housing markets in 52 out of the approximately 350 metro areas nationwide have now returned to or exceeded their prerecessionary levels of activity, according to the newly minted National Association of Home Builders/First American Leading Markets Index (LMI), released today. The index’s nationwide score of .85 indicates that, based on current permits, prices and employment data, the nationwide housing market is running at 85 percent of normal activity. Baton Rouge, La., tops the list of major metros on the LMI, with a score of 1.41 – or 41 percent better than its last normal market level. Other major metros at the top of the list include Honolulu, Oklahoma City, Austin and Houston, Texas, as well as Harrisburg, Pa. – all of whose LMI scores indicate that their housing markets now exceed previous norms. Looking at smaller metros, both Odessa and Midland, Texas, boast LMI scores of 2.0 or better, meaning that their housing markets are now at double their strength prior to the recession. Also at the top of the list of smaller metros are Casper, Wyo.; Bismarck, N.D.; and Florence, Ala., respectively. “This index helps illustrate how far the U.S. housing recovery has come, and also how much further it has to go as we continue to face some significant headwinds in terms of credit availability, rising costs for lots and labor, and uncertainties regarding Washington policymaking,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. The LMI shifts the focus from identifying markets that have recently begun to recover, which was the aim of a previous gauge known as the Improving Markets Index, to identifying those areas that are now approaching and exceeding their previous normal levels of activity. More than 350 metro areas are scored by taking their average permit, price and employment numbers for the past 12 months and dividing each by their annual average over the last period of normal growth. For singlefamily permits and home prices, 2000-2003 is used as the last normal period, and for employment, 2007 is the base comparison. The three components are then averaged to provide an overall score for each market; a national score is calculated based on national measures of the three metrics. An index value above one indicates that a market has advanced beyond its previous normal level of economic activity. “Smaller metros are leading the way to a housing recovery, accounting for 43 of the top 50 markets on the current LMI,” observed NAHB Chief Economist David Crowe. “This is very much in keeping with the results of our previous index for improving markets, and is an indication of the extent to which local economic conditions dictate the strength of individual housing markets.” “The housing markets of 118 metros scored by the LMI this month show activity levels of at least 90 percent of their previous norms – a very encouraging sign of things to come,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Co., which cosponsors the LMI report. Editor’s Note: In calculating the LMI, NAHB utilizes employment growth data from the Bureau of Labor Statistics, house price appreciation data from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. The LMI is published on the fourth working day of each month, unless that day falls on a Friday -- in which case, it is released on the following Monday.
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2013 ISSUE 9
Builders
Builders Outlook
utlook on the scene |
General Meeting The October general meeting featured guest speaker Gerald Cichon, CEO of the El Paso Housing Authority. Mr. Cichon gave the assembled audience some insights into why and how the EPHA operates and the challenges it faces. Over 60 people attended the meeting that was held at the El Paso Club. Special recognition was given to Cindy Bilbe, President of Stewart Title El Paso, who was recognized by Junior Achievement El Paso as one of the top Professionals in El Paso. Congratulations to Cindy from the EPAB.
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el paso development news CRRMA Readies for Opening of Toll Lanes
The “managed” toll lane will be the innermost lane in each direction. Rates per mile will vary based on congestion and the time of day. (CRRMA
Drivers Can Use Border Highway Lanes in December After years of construction, El Paso drivers will get to choose whether or not to use “managed” toll lanes on the Cesar Chavez Border Highway in December when construction is expected to be complete. And now the Camino Real Regional Mobility Authority (CRRMA) is preparing to educate the public about how the toll program will work. The CRRMA board will review a presentation on the Cesar Chavez Managed Lanes Project at its meeting this week that will include details on the toll collection process and the marketing outreach that will roll out in the coming months. Drivers on the nine mile stretch of the Border Highway between US-54 and the Zaragoza Port of Entry will still have two free lanes to use, while the additional toll
lane will be the left-most lane in each direction. Pricing for use of the toll lanes will vary based on the time of day, starting at a base rate of $0.10 per mile. The minimum toll for any trip will be $0.40. Large trucks and trailers will be unable to use the toll lanes, while emergency and public transit vehicles will be exempt from tolls. There will be two tolling points in each direction, between Midway Drive and Yarbrough Drive, and between Yarbrough and Padres Drive. Entrance and exit points will favor drivers taking longer trips with only two exits from the toll lane for eastbound travelers, one before Yarbrough Drive and another before the Zaragoza Port of Entry. The Border Highway has been
widened to accommodate the new toll lanes. There is still a 10-foot inside-shoulder in each direction. The toll lanes will be separated from the free main lanes by a two foot buffer. Collection of tolls will be an electronic process with no actual payment infrastructure on the highway. Sensors will scan vehicles for a toll tag for those that are registered with a toll service and bill the driver accordingly. Cameras will be used to capture license plate information for non-registered drivers who decide to use the toll lanes. A bill will be sent to the address of the vehicle’s registered owner. The CRRMA expects to spread the news about the new toll lanes via stories on various news stations, broadcast advertising on television, radio, and billboards,
and through “grass roots efforts” involving elected officials and community meetings. At least two other managed lane projects are in the works. The Americas Managed Lanes Project will continue the Cesar Chavez toll lanes at the eastern terminus from the Zaragoza Port of Entry north to Bob Hope Drive on El Paso’s East Side. And the massive Border Highway West project will create a brand new tolled expressway from Downtown El Paso to the city’s West Side. The CRRMA will discuss the presentation at its October 9, 2013 meeting. More information can be found at www.crrma.org.
Building Adds to School of Medicine Campus
Lanes on Sun Bowl Drive have been shifted as work has begun on the widening project. (www.onthemove.utep.edu)
Sun Bowl Drive Project Moves Into Full Gear Construction Will Last Through July 2014 Work to widen Sun Bowl Drive into a four-lane thoroughfare at the University of Texas at El Paso (UTEP) is in full swing as crews have put protective barriers in place to protect passing vehicles from debris. Construction workers are “chipping away” at the rocky mountain on the western shoulders of Sun Bowl Drive according to the school’s On the Move website (www.onthemove.utep.edu). The $4.8 million project will widen the roadway, construct five-foot sidewalks on each side, and install enhanced lighting along a half-mile stretch of Sun Bowl. The
outside lane in each direction will also be wider than usual to allow for bicycle traffic. A roundabout will help control traffic at the roadway’s intersection with Glory Road. “You’ve all undoubtedly noticed that the width of Sun Bowl Drive varies from two lanes to four, and that the remaining twolane stretch creates a bottleneck and a safety risk,” UTEP President Diana Natalicio stated during groundbreaking for the project on September 16, 2013, pointing out the issues with traffic caused by the reduced lanes. The school’s Campus Transformation
may add to Sun Bowl Drive’s importance in handling traffic traveling around the campus; one of the Transformation’s goals is to remove vehicular traffic from the inner campus. Sun Bowl Drive will remain open during construction, but officials urge caution due to shifted, temporary lanes. Drivers should expect delays. Officials expect the project to last ten months, which means completion in July 2014.
The Paul L. Foster School of Medicine campus will get a major new addition by 2015. Groundbreaking for the new Gayle Greve Hunt School of Nursing building took place last month. Construction crews are now laying the foundation for the 34,000 square foot facility which will be located on North Concepcion Street across from the School of Medicine’s Medical Education Building. The building will include 12,000 square feet of simulation labs, four classrooms, and collaborative learning spaces. Currently, the Hunt School of Nursing operates out of a temporary location at 415 East Yandell Drive in Downtown El Paso. The Medical Center of the Americas (MCA) Foundation is helping to make the new building a reality. The School of Nursing accepted its first class of students in 2011 after a $10 million donation from the Hunt Family Foundation helped form the school in 2010. Officials hope to have 300 nursing students at the school within five years. There are now 116 students and 13 faculty members at the school. Construction helps to add to the MCA campus which is also working on a new Tech Park which will soon start construction on a $28 million, 83,000 square foot biomedical research structure. Completion of the building is also expected in 2015. The entire MCA campus encompasses 440 acres of land in South Central El Paso. Other anchors of the campus include University Medical Center, El Paso Children’s Hospital, and the Paul L. Foster School of Medicine. The MCA’s Master Plan envisions an integrated medical treatment, learning, and research campus within 50 years. More information on the Gayle Greve Hunt School of Nursing can be found at mcamericas.org and www.ttuhsc.edu.
Builders Outlook Issue 10.2013
Content provided by El Paso Development News visit: elpasodevnews.com
Closer Look: 2014 Unified Transportation Program TXDOT’s Program Document Gives Snapshot of Future Projects The Texas Department of Transportation (TXDOT) programmed hundreds of millions of dollars earlier this year for El Paso’s Border Highway West extension, a project whose total budget could reach $800 million. That’s according to the state’s latest Unified Transportation Program (UTP), approved by the Texas Transportation Commission in June. TXDOT uses the UTP to authorize transportation projects for the state, but does not necessarily mean full present-day funding is available for each individual project. Although the Border Highway West has a certain budget in the document, only $300 million has been approved so far. The nearly 1,200-page UTP includes about 30 pages dedicated to developments in the El Paso District. Timeframes in the report look forward about ten years from the present. 2014 Projects listed for Fiscal Year 2014, which began on September 1, 2013, are spread throughout the city and county. The largest listed in the document is construction of FM 3880 from Alameda Avenue to Interstate 10 in southeastern El Paso County in Tornillo. The new $17.2 million highway will help take traffic to and from the expanded port of entry at the Mexican border, currently under construction. About $11.5 million is programmed for reconstruction of streets in Downtown El Paso. Another $5.5 million may be used to make improvements to Pan American Drive and Winn Road near the Zaragoza Port of Entry. Smaller projects include purchases of buses for use in the County, construction of sidewalks around town particularly along Mesa Street to compliment the Bus Rapid Transit System (RTS) line, and a light-rail study for the Paso Del Norte Port of Entry. 2015 Fiscal Year 2015, which begins in September of next year, has a longer list of projects than the previous year. By far, the largest is the Border Highway West project
which could start construction next year. At $800 million, no other project is even close in budget or scale. The $36 million Americas Managed Lanes project is scheduled for 2015 and would create a tolled lane in each direction on Loop 375 from the Zaragoza Port of Entry to Bob Hope Drive on the East Side of El Paso. Another $21 million may be used to construct two more direct connectors between I-10 and Loop 375 at the Americas Interchange. These would be the final two ramps for the interchange; the fourth, fifth, and sixth connectors are currently under construction. Also in the eastern portions of the area, $12.6 million could help widen Eastlake Boulevard from four to six lanes from I-10 to Darrington Road. The state hopes the project will ease congestion in one of the fastest growing neighborhoods in the area. The City of El Paso’s RTS corridors could get programmed funds, with around $9.2 million for the Dyer Street Corridor and $9.7 million for the Montana Avenue Corridor in 2015. And $9.2 million may be used for reconstruction of Alameda Avenue from Padres Drive to Loop 375. The Lower Valley may see other projects, such as a $5.6 million project to replace the Carolina Drive bridge off of Alameda Avenue and a $1 million Park-NRide project for the Zaragoza Port of Entry. Smaller projects include texturizing of shoulders on various highways, construction of curb ramps, and rehabilitation of sidewalks. 2016 In Fiscal Year 2016, the largest project listed in the UTP is a new $10 million fourlane street that will continue Eastlake Boulevard southward from I-10 and connect it to North Loop Drive. Another $2.48 million may be used to install a continuous turn middle lane on Socorro Road of which $2.15 million has been programmed. Delta Drive in South Central El Paso will have a bridge replaced in a $1.8 million
UTEP Update: Centennial Countdown Begins
Limited edition UTEP Centennial wines are available now, created by Miner Winery of Napa Valley.
The University of Texas at El Paso (UTEP) began its 100-day Centennial Countdown last week with the unveiling of a large LED screen donated by GECU. The countdown clock will be displayed on the screen, which is fashioned into a Bhutanese style tower in front of the Centennial Museum. The countdown began amid fanfare, music, dancing, and speeches at the formal unveiling where UTEP officials celebrated the school’s past, present, and future. “We’ve achieved much over the past 99 years and we have even bigger aspirations for the future,” stated UTEP President Diana Natalicio, adding, “We take great pride in the achievements of our alumni and share out students’ dreams for a bright future.” A new Centennial Welcome Center has been added to the museum, the official headquarters for the Centennial Celebration. It will feature exhibits on the school’s history, photographs showing the campus throughout the years, and a children’s learning area.
project. And Doniphan Road may receive raised medians from Mesa Street to the New Mexico state line in a $1.13 million project. In other general projects, $3 million may be allotted for highway aesthetics improvements on I-10, while surface streets will see traffic signal improvements, curb ramp installations, and re-planking at railroad crossings. 2017-2018 The UTP lists only smaller projects for 2017, then two large projects to begin in 2018. The first project will add collector-distributor lanes to I-10 from Executive Center Boulevard to Mesa Street in West El Paso. According to the UTP, the project cost is $39.4 million, of which $24 million is programmed for 2018. A related project would construct an interchange at Mesa Park Boulevard plus frontage roads that would connect Mesa Park to Executive Center Boulevard. The project may cost $55 million, of which $45 million is programmed in the UTP. Mesa Park Boulevard will connect commuters to the Aldea El Paso SmartCode development which earlier this year received approval from the Camino Real Regional Mobility Authority (CRRMA) to help fund construction of the interchange and frontage road project. The 2018 timeline for the project in the UTP differs somewhat from the deal Aldea’s developer struck with TXDOT, which has the project starting in 2014. Tentative Funding and Other Projects Projects for 2019 through 2023 are not listed in the UTP, though there are associated total dollar amounts for each year. In all, the next ten fiscal years amount to about $1.36 billion for the El Paso District in programmed funds. As with any transportation plan, local-, regional-, or state-level projects may be added or deleted from documents like the UTP. Plus local project lists are usually longer and more optimistic than those approved at the state-level. The El Paso
A gift shop has also been added and will feature limited edition Centennial Wines in white and red varieties. The wines come from the Miner Winery in Napa Valley, California. A Centenario Salsa line will also be available and was created by Desert Pepper Trading Company. Other available Centennial collectibles include t-shirts, ties, and a coaster set with six different “mandala” designs inspired by medallions on campus buildings. Visitors to the Welcome Center may park in the Sun Bowl Parking Garage in designated areas. Opera Bhutan UTEP officials plan a myriad of activities and announcements during the 100 days leading up to the final countdown day on New Year’s Eve, December 31. A Centennial Blog has been created (transformations.utep.edu) which will include information on events and activities during the celebration. Up next for the school is homecoming week, which started yesterday, September 29. And on October 12, UTEP singers and musicians will perform an opera in the Kingdom of Bhutan. Opera Bhutan, as it is called, is a production of Handel’s Acis and Galatea which will incorporate Bhutanese dance and cultural elements.
Funding for the final two Americas Interchange ramps has been programmed into the UTP. (CRRMA)
Metropolitan Planning Organization’s (MPO) Transportation Improvement Program, for instance, lists scores more projects than the UTP. State transportation funds have been a contentious issue in recent legislative sessions, though Texas voters may give new construction and maintenance projects a $1.2 billion shot in the arm next year. Lawmakers approved putting the proposal on the November 2014 ballot earlier this year. Funds would be diverted from oil and natural gas tax revenue that would normally go into the state’s reserve. The Unified Transportation Program may be viewed at TXDOT’s website, www.txdot.gov.
It will be the first opera to ever be performed in the tiny Himalayan country. Thirty-three UTEP students, faculty, and staff are already in the Kingdom of Bhutan for a three-week visit which will include the performance. The history of UTEP and Bhutan’s relationship goes back nearly 100 years when the school used Bhutanese-influenced design in its first building. In 2008, Prince Jigyel Ugyen Wangchuck of the Kingdom of Bhutan was a guest at UTEP during Bhutan Days at the campus. Campus Transformation Construction on UTEP’s Campus Transformation project is also ongoing, and the school has installed cameras at different locations around the future Centennial Plaza site which show a live feed of crews at work. The large plaza area is part of UTEP’s plan to move automobile traffic out of the center of campus. Several Transformation projects will eventually create large pedestrian-friendly environments in and around the center of the school. Centennial Plaza should be complete in August 2014, in time to host the western debut of Opera Bhutan. Information on UTEP’s Centennial Celebration can be found online at centennial.utep.edu.
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Builders Outlook
2013 issue 10
Expert Advice
Joe Bernal Employee Benefits of El Paso
This Just In… The Affordable Care Act prohibits group health plans or group health insurers from imposing any waiting period that exceeds 90 days. (Neither plans nor insurers must impose any waiting period.) In March, the Internal Revenue Service, the Employee Benefits Security Administration, and the Health and Human Services Department proposed regulations that would clarify how waiting periods would apply to employees with variable hours. A group health plan that conditions eligibility on an employee regularly working a specified number of hours per period (or working full-time) would be able to take “a reasonable period of time” to determine whether a variable-hour employee meets this condition. This “measurement period” can last no more than 12 months, beginning on any date between the employee’s start date and the first day of the first calendar month following the employee’s start date. The measurement period will not be considered out of compliance with the 90day waiting period limitation if coverage is made effective no later than 13 months from the employee’s start date, plus the time remaining until the first day of the next calendar month. Plans cannot impose a waiting period in addition to the measurement period. For more information on implementing the Affordable Care Act in your workplace, please contact us.
Health Insurance ACA Spurring Interest in Self-Insurance Between 2000 and 2010, the percentage of people with employer-based health plans enrolled in self-insured plans increased nearly 10 percent, according to the U.S. Agency for Healthcare Research and Quality. The Affordable Care Act (ACA) creates new incentives for smaller employer groups to consider self-insuring. What Is Self-Insurance? Employers providing health benefits to employees have three basic choices: buying a fully insured plan, self-insuring or offering employees a choice of fully insured and selfinsured plans. With an insured plan, the employer pays a flat per-enrollee premium to an insurer that administers the plan and pays claims. Like an insured employer, a self-insured employer has a written plan. However, it pays for its workers’ claims directly as incurred and retains the risk of higher-than-expected claims. So Why Do Employers Self-Insure? State laws that regulate fully insured group plans usually do not apply to selfinsured plans. And some provisions of the federal Patient Protection and Affordable Care Act of 2010 pertain to fully insured plans but not to self-insured plans. Self-insurance offers a variety of potential advantages to employers, including: • Autonomy, control and flexibility of plan design, including exemption from statemandated benefit requirements; • Lower administrative costs than a commercial carrier would charge; • More timely and complete access to data
on health claims, which can help employers make more informed decisions about plan design; • Ease of altering their contract with a thirdparty administrator (TPA) or stop-loss insurer without affecting employees’ choice of providers; • Improved cash flow generated by keeping funds in-house until needed for payment of claims; and • Avoidance of state insurance premium taxes. Once the Affordable Care Act is fully implemented, several provisions will affect fully insured small group plans (100 or fewer employees) that will not affect self-insured plans: • Community rating will apply. Insurers will be allowed to vary premiums only according to actuarial value of the plan, geographic region, age, tobacco use and family size. Your group’s health status or actual claims experience will not matter. • Risk adjustment will begin. The ACA allows the transfer of funds from plans with enrollees having lower than average costs to plans with employees having higher than average costs. • Plans offered to small groups must cover “essential health benefits” (EHBs). The EHBs include items and services within
ten general categories, including prescription drug coverage and mental and substance-use-disorder health services. The EHBs will likely drive prices up for many small group plans. And with community rating and risk adjustment, healthier groups will essentially subsidize the cost of covering less-healthy groups. Therefore, if you have a relatively young, healthy group, you may save money by selfinsuring. Self-insurance has potential disadvantages, however. These include: • Financial risk of unexpectedly large claims; • Regulatory compliance, which is easier with a fully insured plan; • Loss of some discounts. Insurers and larger employers have the clout to negotiate discounts with health providers that smaller employers lack. Although some self-insured employers administer their plan, most outsource plan administration and claim processing to a third-party administrator. They can also mitigate some of their risk by purchasing stop-loss insurance, which will reimburse a covered employer for claims above a specified dollar level. Note that a stop-loss policy is a contract
between the carrier and the employer, not a health policy covering individual plan participants. This means the pre-existing condition and guaranteed renewability requirements that apply to health insurers do not apply to stop-loss insurers. Stop-loss insurers can refuse coverage or drop coverage if a group experiences too many claims. However, the ACA will make changes that will allow self-insured employers to switch back to a fully insured plan at a later date without having to worry about an insurer refusing to cover the group or specific individuals. When fully implemented, the ACA will not allow health insurers to: • Refuse to write small group plans based on health status. • Exclude specific individuals from a small group based on health status. Insurers must “take all comers,” regardless of health status. • Charge higher premiums based on the health status of your group or the gender of your employees. It will also limit how much premiums can vary based on age. In our next issue, we’ll discuss some selfinsured plan structures and stop-loss insurance. To discuss self-insurance options in more detail in the meantime, please contact our office.
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2013 issue 10
11
Builders Outlook
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Builders
Builders Outlook
utlook on the scene |
Women’s Council The Professional Women’s Council held a special member-guest lunch and learn with guest speaker Michelle Cromer. Ms. Cromer’s topic was Feng-Shui, the art of balance in life and in your surroundings. Ms. Cromer was brought to us by Margaret Livingston and introduced by PWC chairwoman Lorraine Huit. This was the largest number of attendees at this councils meeting this year.
2013 issue 10
2013 Issue 10
13
Builders Outlook
www.elpasobuilders.com www.epbuilders.org
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Builders Outlook
2013 issue 10
Expert Advice
David De Rego Hardware Specialities & Glass Co., Inc.
What’s Trending in bathrooms
For bathrooms, the trend in color is more. "It used to be that there wasn't a lot of color in the bathroom, so more color is definitely a newer trend. Neutral shades such as cream, beige and taupe have long been popular color choices for the bathroom because they wear well and fit easily into any design scheme. But these safe colors are giving way to bolder palettes that create a cheerful, fun place to wake up to every morning. While bold can be beautiful, it's not necessarily for everyone. Color forecasting is about reinventing the ways you put colors together so you get a fresh, clean feeling, without abandoning the hues that fit your personal taste. A Touch of Color If you don't want color everywhere in your bath, try adding small doses in cheerful colors such as sunny yellow or fire-engine red that are inspired by children's bathrooms. Plastic or enamel faucets or fanciful geometrically shaped light fixtures are two bold solutions that can give your bathroom a unique look. Those who like to change color frequently, for example with the seasons,
should consider rotating accessories. You can easily add a touch of updated color — an unexpected 'aha' — with towels, rugs and other accessories. Try cool spa colors such as sapphire blue and seafoam green for spring, and brighter beach colors such
as flamingo pink and chartreuse for summer. With the fall comes warmer shades of brown, while winter-influenced colors include candy apple red and maroon with an undertone of pink. Timeless Colors While we're going to see more and more color in the bathroom, certain timeless guidelines still apply. Most skin tones are pink or of a lighter shade tan, so if you want warm tones that will pick up that color use peach, rose and light mocha colors to enhance the subtle feel. Don't rule out those cool spa colors the soothing blues, blue-greens, greens and blue lavenders that enable tranquility and relaxation. Ultimately, your choice of colors boils down to your expectations of what you want in a room that suits your comfort level and décor.
Associates Council
Sam Shallenberger Western Wholesale Supply Probably by the time you receive this, our Bowling Outing will be done and over. I am sure that everyone that participated will have had a great time. We still have some
sponsorship available for our El Paso Desert Open Sun Country Pro Am at 9:00 am November 13th. This is a great opportunity to advertise as this event is a sellout. Please call Margret for details. As the year is passing by rapidly and the end is near I just want to say thank to all the Associates that participated in our events this year as it has made a big difference. I would also would like to thank the board for all the support and a Big Special Thanks to Frank Torres who without a doubt is the Guru of all Parade of homes. Once again a big Thanks to everyone that has made this a special year with two events to go.
Congratulations, Cindy on your induction into the
El Paso Business Hall of Fame!
Cindy Bilbe, President
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Builders
utlook
www.elpasobuilders.com www.epbuilders.org 6046 Surety Dr. El Paso, TX 79905 915-778-5387 • Fax: 915-772-3038 ■ execuTive oFFicerS edmundo Dena – President Accent Homes Frank Torres – vice President GMF Custom Homes edgar montiel – Secretary/Treasurer Palo Verde Homes Sam Shallenberger – Associates chair Western Wholesale Frank Arroyos- immediate Past President Cisco Homes ray Adauto – executive vice President El Paso Association of Builders
■ TAB STATe DirecTorS Doug Borrett, Karam Co., Life Director Randy Bowling, Tropicana Homes ■ NATioNAL DirecTorS Bobby Bowling IV. Demetrio Jimenez NATioNAL ASSociATioN oF Home BuiLDerS (800) 368-5242
TexAS ASSociATioN oF ■ couNciL/commiTTee cHAirS Associates council Sam Shallenberger Build PAc Randy Bowling Desert Green Building council Javier Ruiz Land use council Sal Masoud Young Designer Award John Chaney remodelers council Rudy Guel membership retention Mike Santamaria, Greg Bowling Finance committee Edgar Montiel Women’s council Lorraine Huit ■ ADviSorY To THe BoArD J. Crawford Kerr, Attorney, Firth, Johnston & Martinez ■ BoArD oF DirecTorS Juanita Garcia, Icon Custom Builders Samira Gonzalez, Edwards Homes Walter Lujan, Dawco Construction Carlos Villalobos, Pointe Homes Don Rassette, Rassette Homes Beverly Clevenger, Automated Division 6 Builders Frank Spencer, Aztec Contractors Kathy Parry, Hunt Communities Sal Masoud, Del Rio Engineering Robert L. Foster, Southwest Land Development Services Leti Navarette, Custom Dream Homes Linda Troncoso, TR-Engineering Lance VanDeman, Hub International John Chaney, Passage Supply Joe Bernal, El Paso Employee Benefits Ken Wade, El Paso Building Materials Ruben Orquiz, MTI Ready Mix Kathy Carrillo, Pioneer Bank Henry Tinajero, West Star Bank Paul Zacour, Zacour & Associates Chuck Gabriel, Carpets West Ted Escobedo, Snappy Publishing Lorraine Huit, Cardel Design Javier Ruiz, Border Solar & Senercon
BuiLDerS (800)252-3625
2012 Builder member of The Year Frank Arroyos Cisco Homes 2012 Pat cox Award Mike Santamaria Mountain Vista Homes 2012 Associate of The Year Sam Shallenberger Western Wholesale Supply John Schatzman Award Hunt Companies
Honorary Life members Rudy Guel Brad Roe Cliff Anthes Wayne Grinnell Chester Lovelady Don Henderson Anna Gil
Past Presidents committed to Serve Greg Bowling Kelly Sorenson Mark Dyer Mike Santamaria John Cullers Randy Bowling Doug Schwartz Robert Baeza
Bobby Bowling, IV Rudy Guel Anna Gil Bradley Roe Bob Bowling, III E. H. Baeza Hershel Stringfield
ePAB mission Statement: The El Paso Association of Builders is a federated professional organization representing the home building industry, committed to enhancing the quality of life in our community by providing affordable homes of excellence and value. The El Paso Association of Builders is a 501C(6) trade organization. © 2013 Builder’s Outlook is published and distributed for the El Paso Association of Builders by Snappy Publishing 240 Thunderbird • Suite C El Paso • Texas • 79912 915-820-2800