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www.elpasobuilders.com www.epbuilders.org
Builders Americans support interest tax deduction
PRSRT STD U.S. POSTAGE PAID EL PASO TX PERMIT NO. 429
With the April 17 tax-filing deadline just behind us, the most important tax deduction for tens of millions of middle-class families could be on the chopping block as early as next year’s tax season if some policymakers get their way. “The mortgage interest deduction has been in existence since the inception of the federal tax code nearly 100 years ago and is a cornerstone of U.S. tax and housing policy,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “With many local housing markets across the nation just now showing signs of a long-awaited spring thaw following the worst downturn in decades, protecting the mortgage interest deduction and promoting tax policies that will keep homeownership affordable is very
important to create jobs and keep the economy moving forward,” he added. The deduction is broadly used across income groups and geographic areas. Data from the Joint Committee on Taxation indicate that more than 33 million families benefitted from the deduction in 2010 and that these households saved a collective $83 billion on their tax bills. Though the mortgage interest deduction is the primary reason that taxpayers become itemizers, critics have unfairly attacked it as a tax loophole (despite the fact that more than 33 million households claim it) and a subsidy to the rich. Here are the facts. The mortgage interest deduction primarily helps middle class home owners and is consistent with the principles of a progressive income tax. Two-thirds of the benefits flow to working class American households who earn less than $200,000 annually and nearly all those who own a home of their own will claim the deduction at some point during their tenure as home owners. NAHB research has shown that as a share of household income, the deduction is most important for younger home buyers, who typically have less equity, tighter household budgets and are paying mostly deductible interest and relatively little principal. “The American people understand that curtailing or getting rid of the deduction to help lower the federal debt would result in a big tax hike on millions of middle-class home owners and that prospective buyers
utlook who are counting on its benefits to lower their monthly mortgage payments would remain on the sidelines,” said Rutenberg. The collateral damage to the economy would be even more devastating, resulting in lower home values, which would leave more home owners underwater, trigger more foreclosures and prolong the housing slump for years to come. Changing the rules now would not only take money out of the pockets of those home buyers who rightfully counted on the deduction being there when they needed it, but also penalize millions of baby boomers nearing retirement and seniors who
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even abolished in order to raise tax revenues for the federal government, a minority view that flies in the face of public opinion. A New York Times/CBS News poll conducted last summer reveals that nine out of 10 Americans oppose eliminating the mortgage interest deduction and a nationwide survey of likely voters commissioned by NAHB earlier this year shows that 73 percent oppose abolishing the deduction. Further, the NAHB poll found that three out of four voters believe it is appropriate and reasonable for the federal government to provide tax incentives to promote
A New York Times/CBS News poll conducted last summer reveals that nine out of 10 Americans oppose eliminating the mortgage interest deduction and a nationwide survey of likely voters commissioned by NAHB earlier this year shows that 73 percent oppose abolishing the deduction. own their homes outright. Those looking to use the proceeds from their home to move into a retirement community, help defray health care costs or to fund other long-term obligations may find that declining home values will shrink their retirement nest egg and force them to keep working and stay put because they can’t afford or are unable to sell their current home. Yet, there are critics who still suggest that the mortgage interest deduction should be weakened or
homeownership and 68 percent would be less likely to vote for a congressional candidate who proposed to eliminate the deduction, a sentiment that cut across party lines. “Raising taxes on the nation’s home owners is clearly not the right answer to resolve our nation’s fiscal woes,” said Rutenberg. “Such an illadvised action would devalue housing, lead to massive job losses and derail the fledgling economic recovery.”
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President’s Message |
Frank Arroyos President, El Paso Association of Builders
The end of the first quarter shows that El Paso has been tracking along at about 200 new single family home permits every month. At this rate the permits would be at the annual level we saw in 2010, not good for sure. However with spring comes enthusiasm for sales of homes on the ground ready for move in. The word on multifamily across the country also shows a lack of confidence in the economy but that segment could be victim to the boom of permits issued for apartments last year. Unfortunately the recession which was declared dead in 2009 is still with us. Much of the lack of confidence has to do with politics and it seems like we will suffer through that until the vote is cast in November. We all wish we could just get it over with now, but apparently there isn’t enough momentum to do that. The high price of gasoline continues to affect everybody and that in turn affects all kinds of sales. Gasoline we are told will continue to cost more as we near summer. Fuel surcharges on all sort of items and services are now the
norm with the price increase of the actual product now taking backstage to gas surcharges. The EPAB wants to thank all of the participants of the Speed Networking event. Well done and from what we hear it was pretty well received on both the builder and the associate side. Great job all. Weather is still on everyone’s mind as we get hit with high winds and a lot of sand. I’m learning not to take for granted when we get good weather because sooner than not it will change and the afternoon will be ugly and sandy. So enjoy it when you can! My hat goes off to Mike Santamaria and Greg Bowling for choosing to be co-chairs for the Direct Drive Membership Drive May 22-23. A lot of work is going into this event and we hope that you will take a moment to join us in the fun effort. Have a great start to the second quarter. Go out and sell a bunch!
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Our business relationships become personal Ray Adauto, Executive Vice President EPAB
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ditorials are very personal and for a business publication like ours it really has to be business oriented. As I looked at the blank page I couldn’t help but bring up some of the tragedy we experienced last month to light. Why? Because I believe that to some degree it has roots in this roller coaster economy. The tragedy was a suicide of one of our past Presidents. That death has evoked a host of feelings, emotions, and thought. This tragedy struck home in more ways than one. More importantly it opened the discussion on how the association, and for that manner, all groups like ours can seek out ways to help those going through these tough times with support, prayer, and a more. First let me set the record straight: our friend was a very special gift to us, a smart, hardworking kind soul who was a first class builder and entrepreneur. His construction company was built of the highest standard with sweat and strength. No
one calls into question his ability, his business acumen, or his unswerving desire to be the best. He was a patriot to the bone, a military veteran through and through, a family man and he loved the association. Those who met him walked away knowing he was a special human being with a unique quality. All that and more is what makes his passing even more difficult to grasp. Dying is just a part of the circle of life, and as we grow older that reality is just a heartbeat away. Death from an accident or illness is almost acceptable. Not so when life is cut short by suicide. It would be easy to blame the suicide to one thing, but as the professionals tell us suicide has a thousand faces and a thousand reasons. The added pressure of today’s economy certainly has many blaming the economy but frankly we would be looking at just a part of the whole story. The reality is many things are out of our own control now days and in business more of that is part of daily life. It is a difficult thing to comprehend when someone takes their life. In business we take our role so personal that a failure can manifest itself into feeling that there is no one who cares. It really doesn’t matter what the profession is, failing leaves us devastated. Another business
associate told me after learning of this tragedy that the sense of failure is elevated when you have direct competitors who appear to be glad you failed if for no other reason than you are no longer a competitor. Tragically there are those who think this way. As a God fearing community that is exactly the opposite of what we should act like. But human nature is human nature and losing a competitor to them for whatever reason is just that, less competition. What a shame. Free will is something that all of us have and psychologist tells us that we have little demons running around inside us all the time. But there are those who can control them better than others. Some of us are wired
better than others for the rigors of business and daily life. All of us in business understand the risks. That’s what makes losing someone unexpectedly questions our very soul. It leaves unanswered questions to the family and friends who will search for a reason each day. As an association we have a responsibility to each other. Our board is committed to offering a hand to those who seek it, and to offer prayer and support. We can’t afford to have another member feel like they don’t have another day. A tough lesson but one that I believe we will rise to the occasion for.
El Paso Disposal
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Perspective
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Chente Quintanilla State Representative
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he state comptroller issued a public notice that a business tax amnesty will be in place from June 12 through August 17, 2012. The amnesty is actually for penalties and interest that are levied for delinquent taxes. It sure sounds exciting that the state can expect to collect tens of millions of dollars that businesses did not pay as required by state law. I just wonder why it even exists. Sure, there is a solid incentive to pay the delinquent taxes. But why are the taxes delinquent? When you go to a business and pay them money, do you hold back on paying the taxes? No, that does not happen if you want the product. You are given a receipt that shows the items you bought, the cost for each and then, in a separate entry, the tax that you had to pay. There is no mystery about how much the tax was. In the last such event, which is called Fresh Start, the comptroller boasted that an incredible $100 million dollars in delinquent taxes. Sales taxes that were collected totaled $47 million. The question is why are these sales
Tax amnesty not fair to law abiding Texans taxes not being paid and why are scofflaws being rewarded by avoiding penalties? As I wrote before, if a sales tax is owed, it is because a law abiding Texan paid it for services or products. There is no figuring a percentage of a payment at the end of the year, the tax is figured at the moment of sale. There should be no amnesty for any business that fails to pay the The sales taxes to the state. comptroller should maintain the record of a business that is delinquent. There should be elevating penalties for those who are repeat offenders. The $47 million the comptroller collected in 2007 stayed in the accounts of those businesses earning interest. Those businesses benefitted by not paying the taxes timely; and then the comptroller compounded that by not assessing penalties. I wish the state government was that easy on all of us. Have you ever been ticketed for an expired license or inspection sticker a year later and had your fines waived? Of course not. The comptroller's office uses revenues from interest and penalty to finance a portion of its budget. By granting the amnesty, the comptroller is essentially adding to the budget shortfalls. Even if it is a very small amount, the amnesty causes money
to be diverted from other programs in order to cover the shortfall. That is irresponsible action by the elected official in charge of our revenue collection. The 2007 amnesty also collected $46 million in franchise taxes that were delinquent. I can't blame businesses on that one. The conservative leadership created such a confusing method of figuring a business's tax liability when the law was passed creating it.
You may recall the franchise tax was created to fill in the shortfall when school property tax rates were reduced by 1/3. That tax has never generated the projected revenues for our schools. The deficit has lingered around a $2 billion level. That reason should be enough to be stricter on penalizing delinquent businesses instead of granting amnesties.
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Past President Del Huit dead at 57 The El Paso Association of Builders was shocked by the news that Past President and custom home builder Del Huit had died on March 14. Del had been an integral member of the association for decades and had held several offices during that time. He had fought in Vietnam as a U. S. Marine. The loss for the association will be felt for a long time. His achievements are many but his ability to calmly resolve heated issues and take on tough jobs for the association are his earmark. Delbert “Del” Blaine Huit passed away on March 14, 2012. He was born on September, 16, 1954 in Boise Idaho. He is survived by his wife Lorraine Huit, Son Jacob and Daughter Laureta. Brothers, Lloyd Paul, Kenny Paul, Tony Paul, Richard Paul and Sister Denise Davis. He was preceded in death by his mother Marie Paul. He enlisted in the USMC in 1971 and achieved an Honorable Discharge in 1977. His Love for Country was exemplified with his support of conservative views of local, U.S. and World Politics. Del graduated with an Associates Degree from EPCC
& Business Degree from UTEP. Del owned Cardel Construction Inc., where he was a Builder and a Remodeler for 32 years of which he built hundreds of new custom homes in the El Paso area. He started and owned Cardel Realty from 1994 - 2010 with support from Broker Ellen Speight’s. He was named “Builder of the Year” in 1993 and 2003. He served as President in 1993 and sat on the Board of the El Paso Association from 1999 - 2012. Del was a simple man but a generous person. He participated for many years in “Christmas in April” rebuilding homes for the needy Senior Citizens and monetarily supported Candlelighters of El Paso for many years. He recently taught himself and learned financial investments which he truly loved. He enjoyed the years he learned to Golf with his son and daughter and in his younger year's weekend camping and fishing. Recently he enjoyed outdoor off road desert jeeping with his good friend John Karlsruher. He met a lot of people in his life and most recently his new friends and family from his support group taught him to live and enjoy life “one day at a time.” Visitation was held on Monday, March 19, 2012 Sunset Funeral Home West with a “Celebration of Life” service.
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Gasoline prices continue historic rise, Economy not in sync by Ray Adauto
The highest price for a gallon of gasoline in El Paso has hit historic levels. Now averaging over $3.78 a gallon for regular the effect of the price is starting to inch into serious problem for businesses including home construction. “I have never had to pay so much for a tank of gas and frankly we don’t know how high it might go,” said Edmundo Dena of Accent Homes in El Paso. It’s a common cry heard each time you visit the pump and see the frustration on the faces of those filling up. While the problem of high gasoline prices has long been foretold it wasn’t until recently that they actually hovered at over $3 a gallon. Unfortunately rising gasoline costs affect day to day decisions. Now things are starting to get ugly with finger pointing and little action to a serious economic resolve catastrophe. On March 29 President Obama held a news conference placing blame for high gasoline prices on the oil companies, claiming that the industry
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is charging more while getting back federal tax credits that the President called unfair. In a heated response the oil companies shot back with the facts that during this Presidents term gasoline prices have nearly doubled; exploration of U S oil and gas reserves has not been approved; and that the Keystone Pipeline project has been delayed by the President. “Despite a large drop in wholesale prices earlier this month, so far we haven’t seen a corresponding big decline at the pump,” says Jeffrey Spring, a spokesman for the Automobile Club of Southern California as quoted in USA Today. A Chevron station near the Staples Center in downtown Los Angeles is still demanding the state’s highest price for a gallon of gas -- $5.99. It’s at least the third week that the price has been posted, according to GasBuddy according to USA Today. David Fenigan of Carpet Warehouse in El Paso said he was shocked after a recent trip to Los Angeles with the price of gasoline. “I can tell you firsthand that the rental car company said it would be best if I filled the car back up before returning it since they would charge me $6.87 a gallon,” David said. “I thought ok, so it’s cheaper and I’ll save some money. Imagine my shock to see that gasoline in the heart of L. A. was over $5.70 a gallon!” In addition Fenigan, a member of the El Paso Association of Builders, said that his costs for flooring are going through the roof. “Our products are trucked in from Georgia and each yard of carpet is going up in price due directly to the fuel charges on the delivery,” he said. Asked about his retail business Fenigan lamented that sales are being hurt as consumers have to search for ways to adjust and may be putting off buying because of it. While consumers get hot when they see these prices businesses like homebuilders and their suppliers don’t have a choice. “How do you expect me to do my work without my truck?” asked Rudy Guel, remodeler from El Paso. “I have to carry ladders, materials and workers in order to earn a living, and frankly I have to adjust my costs to reflect gasoline prices,” he continued. It is not only the front line contractors who are feeling the gas pinch but also suppliers. Ken Wade with El Paso Building Materials said the situation is getting critical. “We have been hit with fuel surcharges on the products from our vendors, and frankly, we’ve been absorbing that as much as we can,” Wade told us. “Our business is super competitive and we can’t afford to lose any of my customers because we passed along the charge. At least for now we haven’t and I hope there is relief on this,” Ken continued. The tough economic downturn that the housing industry has suffered can’t be helped by increases in consumer costs. The President’s own Energy secretary said we need to quote "boost the price of gasoline to the levels in Europe." That's $9 a gallon according to an oil industry group. Ironically Energy Secretary Steven Chu in testimony in front of Congress admitted that he currently doesn’t own a car.
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spring golf tournament The El Paso Association of Builders held the annual spring golf tournament at Painted Dunes Desert Golf Course April 10. 34 teams broke out at the noon shotgun and were off and running for the next five hours. Originally the tournament was to be held on all 27 holes at Painted Dunes but an error by the front desk allowed the public onto the north course that morning and caused a slight backup for the teams in the event. Golf chair John Chaney had the dubious task of assigning the teams to the East and West courses making each tee box an A and B tee location. Par was the friend of the golfers and all the players were told to pick up at par. In spite of the somewhat crowded field everyone enjoyed the beautiful blue skies and mild breeze. It couldn't have been better day weather wise but more than one golfer suffered sun burn. A special thanks goes to the companies who bought teams slots and to the advertisers who took tee boxes, the practice range, and drink carts with their special presentations. Bruce Meyer of JDW continued his long tradition of handing out $2 bills for any golfer who made contact with the ball on a second shot on a Par 4 hole. Kathy Parry from Hunt continued her tradition of being one of the most sought after beverage carts. Our special guests included some special attention from the ladies of Christina's Productions. Great prizes were given out after the play including prizes for 1st, 2nd and 3rd place. The Stewart Title team led by Debbie Figueroa won the event with an astonishing 57. Thanks to Margaret Adauto for all the work getting everyone signed up and collecting the fees and to Alice Duran from Lone Star Title for helping Margaret with the goody bags.
View more photos on our facebook page: elpasobuildersassociation
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10 Builder Confidence Slips Three Notches Builder confidence in the market for newly built, single-family homes declined for the first time in seven months this April, sliding three notches to 25 on the National Association of Home Builders/Wells Fargo Housing Market Index, released today. The decline brings the index back to where it was in January, which was the highest level since 2007. “Although builders in many markets are noting increased interest among potential buyers, consumers are still very hesitant to go forward with a purchase, and our members are realigning their expectations somewhat until they see more actual signed sales contracts,” noted Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “What we’re seeing is essentially a pause in what had been a fairly rapid build-up in builder confidence that started last September,” said NAHB Chief Economist David Crowe. “This is partly because interest expressed by buyers in the past few months has yet to translate into expected sales activity, but is also reflective of the ongoing challenges that are slowing the housing recovery – particularly tight credit conditions for builders and buyers, competition from foreclosures and problems with obtaining accurate appraisals.” 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. Each of the index’s components registered declines in April. The component gauging current sales conditions and the component gauging sales expectations in the next six months each fell three points, to 26 and 32, respectively, while the component gauging traffic of prospective buyers fell four points to 18. (Note, the overall index and each of its components are seasonally adjusted.) Regionally, the HMI results were somewhat mixed in April, with the Northeast posting a fourpoint gain to 29 (its highest level since May of 2010), the West posting no change at 32, the South posting a three-point decline to 24 and the Midwest posting an eight-point decline to 23.
Housing Starts Virtually Unchanged in March Single-family housing production held virtually unchanged in March as a double-digit decline in the more volatile multifamily sector brought combined nationwide starts activity down 5.8 percent to a seasonally adjusted annual rate of 654,000 units, according to data released by the U.S. Commerce Department today. In El Paso the El Paso Association of Builders has recorded 608 single family unit permits issued in El Paso city so far this year, while Horizon has 30 permits total for the year. “While more consumers appear to be seriously considering a new-home purchase, builders remain very cautious about starting new projects until they see more actual sales materializing,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “At the same time, in places where buyers are ready to go forward with a purchase, access to credit for both builders and buyers and difficulties in obtaining accurate appraisals are persistent challenges that continue to slow that process considerably.” “While combined U.S. housing starts lost some ground in March, this was almost entirely due to typical month-to-month volatility on the multifamily side,” said NAHB Chief Economist David Crowe. “The fact is that single-family and multifamily starts and permits were all stronger in the first quarter of 2012 than they were in the fourth quarter of 2011, indicating that the market continues to slowly strengthen, albeit in fits and starts.” The 5.8 percent decline in overall housing starts in March was mostly due to a 16.9 percent decline on the multifamily side, which brought that sector’s annual production pace to 192,000 units, seasonally adjusted. Meanwhile, singlefamily starts held virtually flat for the month with a 0.2 percent decline to 462,000 units.
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City certifies five ‘third party’ companies Approximately seven years ago then President Randy Bowling with Ray Adauto from the EPAB and Alan Shubert and Pat Adauto from the City of El Paso undertook a seven city five day tour across Texas, New Mexico and Nevada to investigate third party inspections and one stop commercial stops for permits and inspections. At the time the City was not allowing third party inspections and plan review and it was felt by the industry that this would need to change. It was the contractors who understood that City services would be stressed if the much talked about Fort Bliss BRAC actually came to pass and therefore undertook this firsthand look. Not surprisingly the results of that trip along with recommendations from the City Manager’s office opened up third party inspections and plan review to private companies. In the beginning three companies vied for the work from local home builders, and as of today only one of the original three is still practicing in El Paso, Vision Consultants. Fast forward through the build out and through the recession the need for the third party companies has grown, especially considering that these companies have been held back from doing commercial work. The conceptual design of a one-stop shop for El Paso has been a work in progress but overall third party has
done a good job in El Paso. Recently the City of El Paso decided to revamp the contract for third party inspectors and issued new guidelines on how they would do business in El Paso. Three Core Services provided under this new solicitation: • Direct Services to the City – This is a new provision in the contract that will allow for a contractual relationship between the City, as the primary client, and the Third Party providers, for a complete plan review and building inspections. This will be valuable tool to assist the City during periods when a significant backlog of plan reviews negatively impacts the City’s ability to meet the five day turnaround period to produce building permits. • Indirect Services to the City – Allows for Third Party Providers, acting as an agent for the City, to contract with local Builders to provide either Limited Plan Review, or include Zoning Review, Land Development Review, and Building Inspections services. This is the traditional model for Third Party services that was re-written to include a more descriptive explanation of the key requirements of plan review. • Supplemental Services to the City – A new provision that will allow the
Alan Shubert, representative for the City of El Paso hosted a meeting for builders at the association offices in order to help builders understand the new third party agreements. City to contract with the Third Party providers to perform services such as swimming pool inspections, solar panel inspections, and other minor inspections on demand. The five companies certified are Five Submittals: Bureau Veritas, ECM
International, The Institute for Building Technology and Safety (IBTS), Vision Consultants and Code Compliance Inspections.
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12 EPAB Launches new website www.elpasobuilders.com www.epbuilders.org
A look back...
Builders Outlook The EPAB has a new website up and running! Visitors to the newly designed website are now able to get information on the association and its members through easy to read and even easier links. The work on the website was done by our own EO Ray Adauto. "I can tell you that this website is different than any of the other association sites I visited in that I tried to give the visitor dynamic
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links, easy to understand information and opportunities to gather important information," Ray told the Outlook. The beta testing took about two weeks as Ray tweaked the site with colors, links, fonts and components he thought would make a visitor comfortable reading it. The result after that test is a site that is easy on the eyes and with good current information. "I tried to find a way to
make it easy on me to keep the site updated and so far so good. This site has to meet two distinct visitors, the consumer and the member, and I think we have that now," he continued. The site allows for banner advertising that can be rented on a monthly, half year or yearly rate. For information on ads contact Margaret or Ray at the office, 915778-5387.
& a look forward!
Moments in our 65 year history
New Look for Outlook For decades the Builders Outlook has been the official publication of the El Paso Association of Builders. At first the ‘Outlook’ was simply the association newsletter that resembled nothing more than a church bulletin. In 2004, Ted Escobedo, owner of Snappy Publishing and EVP, Ray Adauto collaborated to re-imagine the Builders Outlook and convert the publication into a professional news and advertising medium. Over the years, the Builders Outlook has indeed evolved into one of the most respected Builders Association publications in the state. The Builders Outlook continues to evolve with this very issue. Readers and EPAB members will find that with this issue, we are launching a new look, a new format and a new means of distribution. “In an effort to better serve our industry and our membership, we have converted to more ‘earth friendly’ paper and will now deliver each issue into our subscribers e-mail in-box instead of their mail box” said publisher, Ted Escobedo. “This not only saves on costs and resources, it allows us to deliver the issue in a more timely manner to the industry professionals that rely on the information we are providing.” In addition, the Builders Outlook will still be available in newsstands and retail locations city-wide. “This is a great evolution for the newspaper; one that I am proud to be a part of,” said Escobedo A Look Back is a monthly feature of the El Paso Association of Builders publication the Builders Outlook. Look for more history of the El Paso Association of Builders in coming editions.
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Membership News UPCOMING EVENTS | MAY 1
MAY 15
MAY 22 -23
JUNE 13
MEMBERSHIP DRIVE CAPTAINS
RENEGADE TRAINING
MEMBERSHIP DRIVE
BOARD MEETING 11:00
MEETING
8:30 – 1:00
EPAB OFFICE
GENERAL MEETING
3:30 PM
EPAB OFFICE
12:00 NOON
EPAB OFFICE
EL PASO CLUB CHASE BANK BLDG. (DOWNTOWN)
NEW MEMBERS
RENEWALS BIC HOMES CROWN HERITAGE HOMES CUSTOM AV, LLC. D. R. HORTON HOMES EL PASO COMMUNITY COLLEGE
SODA SPONSOR
JKS HOMES LAKE SECTION WATER COMPANY LOWE’S HOME IMPROVEMENT
C. D. Lee/Britton Insurance & Bonding Contact: Anthony Landavazo 2244 Trawood, Suite 208 El Paso, Tx 79935 915-595-3393
First American Bank Contact: Louis Sauceda 5505 N. Mesa St., Suite. 2 El Paso, Tx 79912 575-647-1804
First Choice Realty Contact: Rick Snow 723 Agua Caliente Dr. El Paso, Tx 79912 915-329-5868
CONGRATULATIONS & CONDOLENCES Congratulations to WestStar Bank, the new name for Bank of the West. After significant growth in the marketplace and the ever presence of the California based Bank of the West the local bank decided that it was time to get a new identity. Some months ago the commercials started using WestStar holding company making the transition to the new name more apparent. The good news is that WestStar Bank continues to be local and with the new name allows it to expand into communities that are serviced by the California banks namesake. Congratulations from all of us at EPAB.
Thanks to our APRIL SODA SPONSOR: Alon Brands
Pioneer Bank is growing! Actually the bank, headquartered in Roswell, purchased the assets of Washington Federal Bank in El Paso. So where there was one branch of Pioneer here now they’ll be three. Washington Federal on the east side and on west side will begin transformation to Pioneer Bank. With the acquisition Pioneer will service two of the El Paso’s areas that will benefit from the personal touch Pioneer offers. Congratulations to Pioneer Bank. Condolences to the Lowenfield family and our members at Casa Ford, Casa Nissan on the loss of patriarch Wallace “Wally” Lowenfield. Mr. Lowenfield died Sunday, March 25 after a long battle with cancer. Condolences to the Velasquez and Adauto families on the loss of Jenny Velasquez, Hunt Corporation’s Belinda Velasquez mother in law and Ray’s aunt. Aunt Jenny passed on Sunday, March 25 after a prolonged battle with the effects of Alzheimer’s.
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Expert Advice
Next Trend: Consumer-Driven Dental?
Joe Bernal Employee Benefits of El Paso No doubt you’ve heard the buzz about consumer-driven health plans (CDHPs), which seek to control employers’ healthcare costs by giving consumers “skin in the game.” With the cost of providing dental benefits increasing, can consumerdriven dental plans be far behind? More than medical plans, dental plan enrollment tends to go up and down with economic conditions, probably because dental plans are more likely than medical plans to be partially or fully employee-paid. There is good news, however—in 2010, the number of people enrolled in dental plans increased 4.5 percent, after dropping in both 2008 and 2009, reported the National Association of Dental Plans (NADP). 2011 figures were not available at publication time. Today, most employers that offer dental benefits offer standalone plans. The NADP’s 2011 survey found that 98 percent of dental benefits are provided under a separate policy, and PPO plans represent 74 percent of all group dental plans. Although PPO plans aim to control expenses by providing higher reimbursements for care given by network
providers, costs are still increasing faster than the general rateof inflation. To control the costs of an insured dental plan, employers have a couple of options:
75 percent of eligible employees to participate. Voluntary plans typically have much lower participation requirements, as low as 25 percent of eligible employees.
1. Switch to a lower-cost plan. Options include decreasing the annual maximum; limiting benefits, such as covering preventive and basic care only; decreasing annual maximum benefits; and switching to a plan that pays benefits according to a schedule, rather than a percentage of “reasonable and customary” charges.
Direct Reimbursement Plans A direct reimbursement (DR) plan gives employers greater control over their dental benefit program than an insured plan. With a direct reimbursement plan, the employer determines how much it will spend per employee per year. Employees can go to any dentist they choose and pay their bills. They then submit the expense for reimbursement, which they receive free of income taxes for dental expenses that meet the IRS definition of a qualified medical expense. (This generally excludes any treatments made for purely cosmetic reasons.) Unlike insured plans, whose rates depend on the claims experience of a group or pooled groups, the employer determines the cost of a DR plan. Employers set a maximum annual benefit for participating individuals at whatever level they choose often $1,500 or $2,000. They can also tier reimbursement levels— for example, paying 100 percent of the first $100 in expenses and 80 percent of the next $1,750, until reimbursements reach the maximum annual benefit of $1,500. Employers can choose what types of treatments the plan will cover and whether to cover dependents. DR plans give employees greater control over their dental treatment choices, since DR plans allow them to see any dentist and use their funds for any eligible treatment. DR plans also give employers greater control over cash
Negatives: Employees will likely see this as a takeaway; some might not understand the changes in their dental benefit plan until they get a higher-than-expected bill for dental services; and lower (or no) reimbursements for costly services such as root canals and periodontal (gum) treatments might dissuade employees who need these treatments from getting them. 2. Maintain your level of coverage but have employees shoulder a larger portion of costs. Options include increasing employees’ share of premiums, increasing copayment percentages and switchingto an entirely employee-paid (voluntary) plan. Negatives: Cost increases could prompt some employees to drop coverage, bringing your group below the insurer’s participation requirements. Most employer-paid fully insured dental plans require a minimum of
flow—rather than paying premiums to an insurer, the employer can invest plan funds and withdraw them as needed for reimbursements. And about 90 percent or more of your costs will go directly to employees’ dental care, according to the American Dental Association. Negatives: Direct reimbursement dental plans require more administration than an insured plan. Someone must educate employees, verify the validity of claims, make reimbursements and track account balances. A benefits expert can help you evaluate whether this is something you can do in-house or whether your firm would benefit from outsourcing this function. For more information on selecting thebest dental plan for your organization, please contact us. Joe Bernal is a member of the El Paso Association of Builders and presents this information in his newsletter Employee Benefits Report. Employee Benefits of El Paso, DBA Joe Bernal Insurance and Financial Services, Inc., 6414 Gateway East • El Paso, 79905-2007, (915) 542-0900 TX • *joe@employeebenefitsep.com http://www.joebernalinsurance.com The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data.
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www.elpasobuilders.com www.epbuilders.org 6046 Surety Dr. El Paso, TX 79905 915-778-5387 • Fax: 915-772-3038 ■ execuTive oFFicerS Frank Arroyos - President Cisco Homes edmundo Dena - vice President Accent Homes Frank Torres - Secretary/Treasurer GMF Custom Homes Sam Shallenberger - Associates council Western Wholesale Supply Greg Bowling - immediate Past President Tropicana Homes ray Adauto - executive vice President El Paso Association of Builders
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2011 Builder member of The Year Greg Bowling Tropicana Homes 20110 Pat cox Award Kathy Parry Hunt Communities 2011 Associate of The Year Sam Shallenberger Western Wholesale Supply John Schatzman Award Bob Bowling III Tropicana Homes ePAB Special Award Rudy Guel Guel Construction
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■ BoArD oF DirecTorS Joe Bernal, Joe Bernal Insurance Doug Borrett, Karam Co. Kathy Carrillo, Pioneer Bank John Chaney, Passage Supply Sergio Cuartas, BIC Homes Ted Escobedo,Snappy Publishing Art Garcia, El Paso Door Juanita Garcia, ICON Custom Home Builders,LLC
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Samira Gonzalez, Edwards Homes Lorraine Huit, Cardel Design Group Walter Lujan, Dawco Home Builders Sal Masoud, Del Rio Engineering Bruce Meyer, JDW Insurance Edgar Montiel, Palo Verde Homes Kathy Parry, Hunt Communities Javier Ruiz, Senercon & Border Solar Frank Spencer, Aztec Contractors Henry Tinajero, Bank of the West Linda Troncoso, TRE & Associates Ken Wade, El Paso Building Materials Adam Winkler, MTI Ready Mix Paul Zacour, Zacour & Associates
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. © 2012 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