Issue 3 2012 Building El Paso’s tomorrow today TM years EL PASO BUILDERS ASSOCIATION OF BUILDING EL PASO’S FUTURE SINCE 1946 Builders Outlook PRSRT STD U.S. POSTAGE PAID EL PASO TX PERMIT NO. 429 www.elpasobuilders.com Home Builders Announce Housing Finance Reform Plan Bill Introduced: Restore Opt-Out Provision in Lead Paint Rule The National Association of Home Builders (NAHB) announced a new comprehensive framework for housing finance system reform that would transition Fannie Mae and Freddie Mac to a new mortgage securitization system for single- family and multifamily conventional mortgages. “Our plan seeks to overhaul the housing finance system to ensure that housing credit is available and affordable in the future and is delivered through a competitive, efficient, sound, safe and stable system,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. To achieve this goal, Rutenberg said the system must include private, federal and state sources of housing capital; offer a reasonable menu of sound mortgage products for both single-family and multifamily housing that is governed by prudent underwriting standards and adequate oversight and regulation; and provide a federal backstop to ensure that 30-year, fixed-rate mortgages are available at reasonable interest rates and terms. Replacing Fannie Mae and Freddie Mac with a new securitization system for conventional mortgages backed by private capital and a privately funded federal mortgage-backed securities fund must be done in an orderly fashion over time. During this phase-in period, Fannie Mae and Freddie Mac would remain operational until the alternative system is fully functioning. Under this scenario, Fannie Mae and Freddie Mac would be gradually replaced by private housing finance entities (HFEs) that would be chartered to purchase single- family and multifamily mortgages from loan originators and package the loans into securities for sale to investors worldwide. The federal government would guarantee the securities, not the mortgages. The HFEs would only purchase mortgages that are well understood and have reasonable risk characteristics, such as standard 30-year fixed-rate loans. The HFEs would operate under the oversight of a strong independent regulatory agency to ensure all aspects of safety and soundness. NAHB believes the 12 regional Federal Home Loan Banks could serve as HFEs. Federal support to the conventional mortgage of the future would consist of a privately funded insurance fund where the government would guarantee its solvency in a manner similar to the Federal Deposit Insurance Corporation’s backing of the fund that insures savings deposits. Under this system, mortgage originators would pay premiums to capitalize the insurance fund, which would cover losses and ensure full payment to investors. The federal government would be required to pay investors only if the insurance fund was depleted. “The intent is for the government to be in a secondary position and to be the insurer of last resort in order to reduce the risk to taxpayers,” said Rutenberg. NAHB’s housing finance reform blueprint also proposes to: • Restart a carefully regulated fully private mortgage-backed securities system. NAHB believes reforms are needed in the system for rating mortgage-backed securities and is supporting the development of new securities ratings agencies that would use criteria developed by securities investors to assure objective evaluations and avoid conflicts of interest. • Continue the role of the federal government housing agencies. The housing finance support roles of the Department of Housing and Urban Development, Federal Housing Administration, the Department of Veterans Affairs, the Department of Agriculture and the Government National Mortgage Association (Ginnie Mae) would be preserved. • Enhance the position of state and local housing finance agencies (HFAs) as a source of housing funds. The HFAs should have a more prominent housing finance role through the development of original programs for new homes and multifamily rental units involving partnering with federal and private providers of housing capital. • Expand the role of the Federal Home Loan Banks (FHLBanks) in the housing finance system. The FHLBanks should continue their current activities to serve as an ongoing liquidity source for institutions providing housing credit. Existing programs, such as the FHLBanks’ mortgage purchase programs, should be enhanced by allowing the banks to move beyond portfolio purchases to securitization. • Repair flaws that produced the housing boom and bust. It is extremely important to continue and complete steps to close the gaps in standards and oversight that allowed and facilitated the improper and illegal activities in financial and mortgage markets. This should be done by undertaking a series of comprehensive reforms to ensure sound mortgage products and prudent underwriting; requiring sound mortgage securities structures and full transparency for investors; and imposing adequate oversight on previously unregulated segments of the mortgage and financial markets. From NAHB Sen. James Inhofe (R-Okla.) and a cadre of fellow Republicans have introduced a Senate bill to restore the "opt-out" provision in the EPA's Renovation, Repair and Painting (RRP) rule. The provision, struck from the rule when it was introduced in April 2010, exempts a contractor from the RRP rule's lead-safe work requirements when a homeowner certifies that no child under 6 or pregnant woman resides in the home. Besides restoring the opt-out provision, the bill would outright suspend the rule in homes without small children or pregnant women until the EPA approves a more accurate, commercially available test kit to determine the presence of lead on a job site. For more information on viable lead test kits, visit the EPA's website. Further, the proposed bill prohibits the EPA from expanding the RRP rule to commercial and public buildings—which it proposed doing in May 2010—until the agency further studies how contractors are exposed to lead on those job sites. The bill also exempts contractors from penalty when they submit incorrect paperwork the first time, and it eliminates a requirement that recertification training be "hands on," making it possible for contractors to get recertified online. "I have always supported the intent of [RRP rule], which is to protect children and pregnant women from lead exposure, but EPA's implementation of the rule has long been botched and in need of a legislative fix," Inhofe said. In May 2010 the EPA gave its reason for removing the opt-out provision in the first place: "As pointed out by a number of commenters on the RRP rule, the opt-out provision does not protect families with young children who may purchase recently renovated target housing." The EPA feared that "… dust-lead hazards created during renovations in an owner- occupied residence conducted prior to a sale will be present for the next occupants." The National Association of Home Builders (NAHB) lauded Sen. Inhofe's bill. "If this effort is successful, it will reduce the regulatory burden for remodelers facing costly penalties for first-time violations like misfiled paperwork and allow home owners to make the final decision about renovations in their homes," said NAHB Remodelers Chairman George Moore Jr. Co-sponsors for the bill, referred to as the "Lead Exposure Reduction Amendments Act of 2012," include Sens. Charles Grassley, (R, Iowa); David Vitter, (R,) La.); Michael Enzi, (R, Wyo.); Tom Coburn, (R, Okla.); and Roy Blunt, (R, Mo.). The same day the bill was introduced, it was referred to the Senate's committee for Environment and Public Works, of which Inhofe is the ranking member. Reprint from Hardwood Floors Magazine, March 2012
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Issue 3 2012 Building El Paso’s tomorrow todayTM
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B U I L D I N G E L PA S O ’ S F U T U R E S I N C E 194 6
Builders Outlook
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www.elpasobuilders.com
Home Builders Announce Housing Finance Reform Plan
Bill Introduced: Restore Opt-Out Provision in Lead Paint Rule
The National Association of Home
Builders (NAHB) announced a new
comprehensive framework for housing
finance system reform that would transition
Fannie Mae and Freddie Mac to a new
mortgage securitization system for single-
family and multifamily conventional
mortgages.
“Our plan seeks to overhaul the housing
finance system to ensure that housing credit
is available and affordable in the future and
is delivered through a competitive,
efficient, sound, safe and stable system,”
said NAHB Chairman Barry Rutenberg, a
home builder from Gainesville, Fla.
To achieve this goal, Rutenberg said the
system must include private, federal and
state sources of housing capital; offer a
reasonable menu of sound mortgage
products for both single-family and
multifamily housing that is governed by
prudent underwriting standards and
adequate oversight and regulation; and
provide a federal backstop to ensure that
30-year, fixed-rate mortgages are available
at reasonable interest rates and terms.
Replacing Fannie Mae and Freddie Mac
with a new securitization system for
conventional mortgages backed by private
capital and a privately funded federal
mortgage-backed securities fund must be
done in an orderly fashion over time.
During this phase-in period, Fannie Mae
and Freddie Mac would remain operational
until the alternative system is fully
functioning.
Under this scenario, Fannie Mae and
Freddie Mac would be gradually replaced
by private housing finance entities (HFEs)
that would be chartered to purchase single-
family and multifamily mortgages from
loan originators and package the loans into
securities for sale to investors worldwide.
The federal government would guarantee
the securities, not the mortgages.
The HFEs would only purchase
mortgages that are well understood and
have reasonable risk characteristics, such
as standard 30-year fixed-rate loans. The
HFEs would operate under the oversight
of a strong independent regulatory agency
to ensure all aspects of safety and
soundness. NAHB believes the 12
regional Federal Home Loan Banks could
serve as HFEs.
Federal support to the conventional
mortgage of the future would consist of a
privately funded insurance fund where the
government would guarantee its solvency
in a manner similar to the Federal Deposit
Insurance Corporation’s backing of the
fund that insures savings deposits. Under
this system, mortgage originators would
pay premiums to capitalize the insurance
fund, which would cover losses and
ensure full payment to investors. The
federal government would be required to
pay investors only if the insurance fund
was depleted.
“The intent is for the government to be
in a secondary position and to be the
insurer of last resort in order to reduce the
risk to taxpayers,” said Rutenberg.
NAHB’s housing finance reform
blueprint also proposes to:
• Restart a carefully regulated fully
private mortgage-backed securities
system. NAHB believes reforms are
needed in the system for rating
mortgage-backed securities and is
supporting the development of new
securities ratings agencies that would
use criteria developed by securities
investors to assure objective evaluations
and avoid conflicts of interest.
• Continue the role of the federal
government housing agencies. The
housing finance support roles of the
Department of Housing and Urban
Development, Federal Housing
Administration, the Department of
Veterans Affairs, the Department of
Agriculture and the Government
National Mortgage Association (Ginnie
Mae) would be preserved.
• Enhance the position of state and local
housing finance agencies (HFAs) as a
source of housing funds. The HFAs
should have a more prominent housing
finance role through the development of
original programs for new homes and
multifamily rental units involving
partnering with federal and private
providers of housing capital.
• Expand the role of the Federal Home
Loan Banks (FHLBanks) in the housing
finance system. The FHLBanks should
continue their current activities to serve
as an ongoing liquidity source for
institutions providing housing credit.
Existing programs, such as the
FHLBanks’ mortgage purchase
programs, should be enhanced by
allowing the banks to move beyond
portfolio purchases to securitization.
• Repair flaws that produced the housing
boom and bust. It is extremely important
to continue and complete steps to close
the gaps in standards and oversight that
allowed and facilitated the improper and
illegal activities in financial and
mortgage markets. This should be done
by undertaking a series of
comprehensive reforms to ensure sound
mortgage products and prudent
underwriting; requiring sound mortgage
securities structures and full
transparency for investors; and imposing
adequate oversight on previously
unregulated segments of the mortgage
and financial markets.
From NAHB
Sen. James Inhofe (R-Okla.) and a cadre
of fellow Republicans have introduced a
Senate bill to restore the "opt-out"
provision in the EPA's Renovation, Repair
and Painting (RRP) rule. The provision,
struck from the rule when it was
introduced in April 2010, exempts a
contractor from the RRP rule's lead-safe
work requirements when a homeowner
certifies that no child under 6 or pregnant
woman resides in the home.
Besides restoring the opt-out provision,
the bill would outright suspend the rule in
homes without small children or pregnant
women until the EPA approves a more
accurate, commercially available test kit
to determine the presence of lead on a job
site. For more information on viable lead
test kits, visit the EPA's website.
Further, the proposed bill prohibits the
EPA from expanding the RRP rule to
commercial and public buildings—which
it proposed doing in May 2010—until the
agency further studies how contractors are
exposed to lead on those job sites.
The bill also exempts contractors from
penalty when they submit incorrect
paperwork the first time, and it eliminates
a requirement that recertification training
be "hands on," making it possible for
contractors to get recertified online.
"I have always supported the intent of
[RRP rule], which is to protect children
and pregnant women from lead exposure,
but EPA's implementation of the rule has
long been botched and in need of a
legislative fix," Inhofe said.
In May 2010 the EPA gave its reason for
removing the opt-out provision in the first
place: "As pointed out by a number of
commenters on the RRP rule, the opt-out
provision does not protect families with
young children who may purchase
recently renovated target housing." The
EPA feared that "… dust-lead hazards
created during renovations in an owner-
occupied residence conducted prior to a
sale will be present for the next
occupants."
The National Association of Home
Builders (NAHB) lauded Sen. Inhofe's
bill. "If this effort is successful, it will
reduce the regulatory burden for
remodelers facing costly penalties for
first-time violations like misfiled
paperwork and allow home owners to
make the final decision about renovations
in their homes," said NAHB Remodelers
Chairman George Moore Jr.
Co-sponsors for the bill, referred to as
the "Lead Exposure Reduction
Amendments Act of 2012," include Sens.
Charles Grassley, (R, Iowa); David Vitter,
(R,) La.); Michael Enzi, (R, Wyo.); Tom
Coburn, (R, Okla.); and Roy Blunt, (R,
Mo.). The same day the bill was
introduced, it was referred to the Senate's
committee for Environment and Public
Works, of which Inhofe is the ranking
member.
Reprint from Hardwood Floors
Magazine, March 2012
Builders Outlook2 ISSUE 3 2012
I’m starting this column with a comment
on the value of membership. During the
2011 Texas legislative session our
Association through the Texas Association
of Builders and individuals from EPAB
sifted through nearly 1100 bills that could
have impacted the residential construction
business. Our efforts saved individual
builders and home buyers thousands of
dollars per home each year. That translates
to savings exceeding several billion dollars
in Texas. It also saved jobs in our
industries. Your membership provided you
with a place at the legislative table on issues
most of us couldn’t be aware of trying to
this on our own.
Every month that I represent you as
President provides me with another
opportunity to come in contact with great
people from different professions,
locations, and situations. As I travel to
meetings I come to realize the impact that
we have and what we can do to strengthen
our efforts. Such was the case in February
as we made our way to Texas Builder
meetings in Austin. First allow me to thank
those that went with me. Greg and Randy
Bowling do so much in Austin for us that I
really think we can’t thank them enough.
Once again our Association was singled out
as the best in percentage over goal at
HomePAC, the Texas builder political arm.
I was proud to pick up the award for this at
the board meeting. Also on the trip was
Edmundo Dena your Vice President. It was
his first time on the “inside” and he came
away a believer. He can see that El Paso
does have an impact in Texas builder
decisions and politics, and he also
understands the value of networking with
Texas best builders. My wife Ruth also
came to the meetings and she always comes
away from these things understanding what
it is we do as a group. Of course I’d like to
thank Ray as well. He’s a great guide and
knows his way around the meetings and the
great places to eat.
While we understand drought a little bit
more than the rest of Texas I was amazed
that the primary topic was the lack of water.
It is affecting more than we think because
the issue of water is highly politicized and
will be on the agenda next legislature.
Unlike El Paso, the rest of Texas pretty
much depends on surface water, rivers,
lakes and ponds. With the drought Texas
builders are seeing restrictions on building
permits because they can’t get water
hookups. Some towns actually have to
truck water in. This sounds like a bad
science fiction movie or something, but it’s
happening right now in some parts of the
state. Water is also being used as a weapon
to curtail building or expansion. Our lobby
team in Austin is on top of this, but nothing
will help more than rain. Keep the prayers
on for that.
Back here at home we have a busy March
and April coming up. Sign up for the
concealed handgun class coming up, or the
Made in USA Speed Networking event. We
are looking for teams and advertisers for the
April 10 EPAB golf tourney.
As always I wish you success in your
daily life and blessings.
Builders Outlook3
Frank
Arroyos
President,
El Paso Association
of Builders
President’s Message
El Paso Disposal
772-7495
BUILD a bettersocial network!
find us onfacebook:elpasobuilders
Builders Outlook4 ISSUE 3 2012
Texas Association of Builder meetings
are always interesting, informative and
offer a wealth of knowledge. Our TAB
winter meetings were held in February at
the historic Driskill Hotel in downtown
Austin. It’s the kind of place where all
things Texas come together with the look
of old world hand drawn wood, beautiful
artwork, stunning ceilings and more
leather than an herd of longhorns. The
site is chosen by TAB because it’s a great
place for meetings like ours. Given the
fact that nearly 300 members jam the
hotel over the two or three days of the
meet it isn’t the location that is inspiring,
it’s the people who attend that are. Our
new Vice President Edmundo Dena
experienced his first “insider” meeting in
February and he said the same thing I’ve
heard for eight years, “this was
awesome”.
It may seem that being a builder of the
caliber Edmundo is that he wouldn’t be
susceptible to the feeling of surprise at
what actually goes on at a conference like
this. But he was and I had an opportunity
to talk to him about it. What he said was
that he was amazed at the “power”
gathered at the meeting. I asked him to
elaborate and he went on to tell me about
the meetings he attended and how much
he realized El Paso was recognized and
admired. He said that in our region we in
El Paso are kind of the test bed for the rest
of West Texas and that what goes on in
bureaucratic circles over here eventually
finds its way to Lubbock, Midland,
Odessa and points in between. This is
especially true during the current drought
and the onset of government impositions
and restrictions on building because of it.
Edmundo also was extremely happy to
see that El Paso had established a long
line of support for the work we have done
through the association. The HomePAC
luncheon gave him another important
perspective of being a part of the TAB.
Statewide politicians understand the need
for housing in Texas and yes in El Paso.
The year round effort by our TAB staffers
and lobbyist goes a long way in making
sure that El Paso’s voice is heard in the
same way San Antonio, Dallas and
Houston’s is. I’m glad Edmundo took
time to be in Austin for these meetings.
It’s great to see firsthand what makes the
association so good to belong to. It’s
about strength in numbers and quality
representation that each member of the
EPAB should be proud of. One visit to a
state meeting puts that into clear view.
Just ask Edmundo Dena, our newest
ambassador.
George Henry Jackson passed away on
February 24 at the age of 87. He was
President of the EPAB in 1974. Mr.
Jackson was the owner of G.H Jackson
Construction and built homes and
apartments in El Paso starting in 1968. He
also built Bassett Self Storage and much
of Rojas Industrial Park. George was an
avid flying enthusiast, skier, and
sportsman. He scuba dived until he was
81 and flew until he was 85. He loved his
church, St. Clement, and served there in
the important role of senior warden and
more. There are things that George did in
life that served a lot of good, and it is our
honor to wish his family thanks for his
service to us, to the community and to his
God. May he rest in peace.
Perspective
Ray Adauto,
Executive
Vice President
EPAB
TAB meetings worthwhile for ‘number’ of reasons
In Memoriam:
George Henry
Jackson
Builders Outlook 5Issue 3 2012
Dunkin Donuts announced that El Pasowould be seeing eight new “restaurants”as part of a signing of a multi-storeagreement with a new subsidiary,Sizzling Donuts, LLC. Grant Benson,VP of Franchising and market planningfor Dunkin Brands, Inc. said that he waspleased to see a passionate franchiseecommitting to El Paso. Sources say thatEl Paso and Denver share the newowners and that both cities are primelocations for growth.
••••
Walmart plans to open a new store inLas Cruces, while a supercenter andneighborhood grocery store opens inNortheast El Paso. The supercenter isnearing completion at the location onDyer near Fred Wilson. The site was aneyesore for years as it was home to anindoor flea market, and weekend outdoorflea. Construction was finishing as ofearly March, while the grocery store alsois nearing construction completion. Thatgrocery is on Hondo Pass located about ablock west of Dyer and west of SonicDrive In and Taco Cabana. Both storesare welcomed additions to a revivedNortheast.
••••
El Paso Electric filed for a rate increasewith the Public Utility Commission ofTexas asking for a $17.6 million increasein rates in order to continue to providesafe and reliable service. Growingdemand for electricity in the region along
with costs from the freeze of 2011 repairwork done are part of the reasoning. AlsoEl Paso Electric is seeking a one-timesurcharge of $8.7 million to recover legaland other expenses likely to occur as aresult of the El Paso City Council orderfor a rate filing. In other news aboutEPE was the announcement that DavidStevens announced his resignation asCEO. Thomas Shockley, EPE director,will act as interim.
••••
REDCO announced new board membersand officers recently. Dan Harris ofWestern Refining and Paco Jordan,Chairman of CF Jordan joined REDCO’sBoard in January. They replacedSuzanne Ramos and Cindy Bilbe(Stewart Title) who rotated out. RussVandenburg, CEO of TVO NorthAmerica, assumed the responsibilities asChairman of REDCO for 2012. El Paso Children’s Hospital opened itsdoors as the first independent children’shospital in El Paso. The non-profithospital is located next door to UniversityMedical Center, but is not a part of thatentity. There are about 225,000 squarefeet in the complex, with 50 neonatalintensive care basinets; 22 pediatricintensive care beds; a dedicated pediatriconcology/hemology floor; four pediatricoperating rooms and other specialtyareas.
City Desk: Local News of interest
to our members
Builders Outlook6 ISSUE 3 2012
More than 51,000 builders, remodelers
and other members of the home building
industry crowded the aisles of the National
Association of Home Builders’ International
Builders’ Show (IBS), which ended its four-
day run Friday at the Orange County
Convention Center in Orlando, Fla., last
week.
Signs of optimism for the industry’s
recovery could be felt throughout the show,
as exhibitors noted increased booth traffic
and solid sales leads.
“We were so happy with the show this
year—it was truly unbelievable. We barely
had time to take a break,” said Brian
Stowell, CEO of Crown Point Cabinetry,
who noted that they will exhibit again at IBS
2013 in Las Vegas. "If you supply the
construction trade, you are crazy if you don't
have your product here. This is your one
chance all year to get in front of a national
audience of builders that have projects. This
show is a must for us."
The 2012 IBS featured exhibits from more
than 900 suppliers representing all facets of
the home building industry. Builders and
remodelers also attended more than 165
educational sessions on design trends, green
building, marketing, remodeling and other
building industry topics.
Nearly 2,500 people attended a special
address by Federal Reserve Chairman Ben
Bernanke, where he discussed how restraints
on credit for home buyers and home builders
alike continue to impede the housing and
economic recovery.
Attendees also flocked to IBS Live, a new
theater-like venue on the show floor that
featured several exciting sessions
throughout the week including an
appearance by “Dancing with the Stars”
winner and Operation Finally Home
spokesperson, J.R. Martinez; a live airing of
the popular Los Angeles-based radio show,
“Home Wizards;” and a number of
presentations on topics like green building,
consumer trends and home financing.
“We really enjoyed our experience at the
2012 IBS. We were able to meet with
vendors and see the latest product
innovations, attend a wide variety of
education sessions to learn new ideas and
sharpen our skills, and hear from a great
line-up of speakers, said Steve Spanjer,
President of Spanjer Homes. “We returned
to work recharged and inspired. The IBS is
an event our firm will not miss, as it helps
enable us to be better prepared builders.”
Other highlights of the show included The
New American Home 2012, NAHB’s
official show home, and the IBS Opening
Ceremonies featuring world-famous
magicians Penn & Teller as keynote
speakers, and Aron Ralston, whose inspiring
story of bravery was made famous in the
acclaimed movie 127 Hours.
The next International Builders’ Show
takes place Jan. 22-24 at the Las Vegas
Convention Center. Registration for the
2013 show will open on Sept. 1. Details will
be available at www.buildersshow.com.
Increased Optimism Felt at NAHB’s
2012 International Builders’ Show
Health savings accounts (HSAs) andflexible spending accounts (FSAs) letemployee or dependents set aside money,before taxes, for qualified healthcareexpenses.
Employers can use them to incentivizeemployees to participate in healthimprovement programs and they have taxadvantages for both the employer andemployee.
But they have a few key differences—which account should you use and when?
HSAs
An HSA is a savings account availableonly to people who are enrolled in aqualified
high-deductible health plan and whohave no other health insurance. As thename implies,high-deductible health plansrequire higher deductibles and out-of-pocket expenses than other types of healthinsurance policies, but the premiumsgenerally cost less per month.
The employer, employee or both cancontribute to an HSA. Employercontributions do not count as taxableincome to the employee; employees cantake an above-the-line deduction
for any contributions they make. If youoffer employees a flexible spendingaccount or cafeteria plan, they can makecontributions to their HSA with pre-taxdollars through their FSA. A majoradvantage to using a health savingsaccount is the money carries over from
year to year, so employees don’t have to“use it or lose it.”
HSAs linked to high-deductible healthplans can help control your group medicalexpenses by giving employees a greaterstake in their health expenses. HSAaccount holders can use money in theirHSA for any qualified medical expense,including medical expenses in retirement.Employees control the money in theiraccounts, not the employer. Balancesaccrue year to year and are fully portable,giving employee’s incentives to build theiraccounts rather than spend them down.
FSAs
Employers set up FSAs for employees;FSAs can cover either medical/dentalexpenses, dependent care expenses orboth. A medical flexible spending accountwill cover any medical expense considereddeductible by the IRS. You can find a liston IRS Publication 502.
Employees elect how much of their pre-tax salary to deposit into their account,reducing their income tax liability.Employees pay no monthly or yearlymaintenance fees on their account.However, they need to figure out howmuch they’re going to need for healthcareor dependent care expenses over the year,because they lose whatever is left in theaccount at the end of the year. This “use itor lose it “feature could encourageemployees to make unnecessaryexpenditures.
Pro and cons for employers
Employers have much to love aboutFSAs and HSAs. Because funds are pre-tax withdrawals, they decrease employeetaxable income, resulting in lower costsfor FICA, unemployment insurance,workers’ compensation and other wage-based benefits. Payroll tax savingsgenerally offset the cost of administration,and the employer can earn interest onaccount balances. On the flip side, the FSA“at risk” provision requires that youreimburse an employee for incurredeligible expenses up to the full amount thathe or she has elected to set aside during theplan year — regardless of how much he orshe has actually contributed at that point.For example, let’s say an employee electsto contribute $2,400 for the plan year andincurs $2,400 of eligible expenses at theend of the second month. At this point, theemployee has only contributed $400 to hisaccount, yet is entitled to $2,400 inreimbursement. If the employee remainswith your organization, he will contributethe remaining $2,000 by year’s end.However, he has no repayment obligationif he leaves his job before the end of theyear. The employer may still break even,because an employee who leaves in thecourse of the year without spending all hehas contributed to his account relinquishesthe remaining funds, unless he continuesparticipating through COBRA. Employeesalso forfeit to their employers any unspentamounts left in their accounts at the end ofthe year. You can cap your company’sliability by limiting the amount thatemployees set aside. Some employers usea two-tiered limit, limiting first-yearparticipants to $1,000, for example, andthen capping future participation at ahigher amount. Remember, however, thatthe Affordable Care Act will limitcontributions to medical FSAs to $2,500for tax years beginning after 2012.
Guest ADVICE Health Care Reform: What’s happening in 2012?
Building El Paso Since 1950Visit our website for home
floorplans, communities,
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much more.
Tropicana Homes is the onlybuilder in town that has been inbusiness since 1950, and we'rethe only builder in town to benamed “Builder of the Year”four times.
Our Commitment toexcellence, attention to detail,and pride in customersatisfaction are unparalleled inthe industry.
Tropicana's strategy is not tobe the cheapest, or even thebiggest, but instead the BEST!If you want the best in yournew home, make Tropicanayour choice!
View more photos on our facebook page: elpasobuildersassociation
The February general meeting was held at the
El Paso Club. Ken Farah from REDCO gave a
presentation on the economic picture of El
Paso and how REDCO looks at the metrics of
economic development. The presentation was
insightful in showing how diverse the manu-
facturing industries are in El Paso. Medical
devices and electronic components for con-
struction were the big surprise in the presenta-
tion. Over 60 members and guests enjoyed the
meeting.
The Texas Association of Builders met in late February in Austin for the 2012 Winter Board meetings. Held at the historic Driskill Hotel in down-
town Austin, the meetings topic of the day was water shortage (drought) in Texas and its effect on the home building business. It is predicted that
water will be the topic of the 83rd legislature in 2013 and our lobby team is preparing for an onslaught of legislative bills on that topic alone. Our
association was awarded the top trophy for contributions to the HOME PAC of the Texas Association of Builders. Accepting the award was Greg
Bowling, Frank Arroyos and Edmundo Dena. Summer meetings will be held at Horseshoe Bay in late June.
Builders Outlook10ISSUE 3 2012
Sales of newly-built, single-family homes
declined by less than one percent in January
from an upwardly revised number in the
previous month to hit a seasonally adjusted
annual pace of 321,000 units, according to data
jointly released by HUD and the U.S.
Commerce Department today.
“Outside of the upwardly revised December
number, this is actually the best sales pace we’ve
seen since April of 2010, when the home buyer
tax credit was in effect,” noted Barry Rutenberg,
chairman of the National Association of Home
Builders (NAHB) and a home builder from
Gainesville, Fla. “Moreover, many recent
indicators – from our builder confidence surveys
to housing starts and permits data and the
expanding list of improving local markets –
have provided evidence that consumers are
becoming more confident about making a home
purchase.”
“New-home sales this January were up 3.5
percent from the same time last year, and up one
percent from the fourth quarter average for
2011,” added NAHB Chief Economist David
Crowe. “This is indicative of the incremental,
steady progress that the market is making
toward recovery in conjunction with modest
economic and job growth. Increasingly,
potential buyers are feeling better about their
financial situation and their ability to buy a
home, but the challenges posed by tight credit
conditions and appraisal issues continue to slow
that process.”
New-home sales slipped 0.9 percent to a
seasonally adjusted annual rate of 321,000 units
in January, which was the second-fastest pace of
sales activity since April of 2010. This decline
was due to a 24.5 percent reduction in the
Midwest and a 10.6 percent reduction in the
West. Meanwhile, the Northeast posted an 11.1
percent gain and the South bounced back from a
substantial decline in the previous month with a
9.3 percent increase.
The inventory of new homes for sale
continued to shrink to another record low in
January, hitting 151,000 units, or a 5.6-month
supply at the current sales pace.
New-Home Sales
Virtually Flat in January
Orlando, Fl - Barry Rutenberg, a Gainesville,
Fla.-based home builder with more than 35
years of experience in the building industry, was
elected as the 2012 Chairman of the Board of
the National Association of Home Builders
(NAHB) during the association’s International
Builders’ Show in Orlando.
Rutenberg is president of Barry Rutenberg
and Associates, Inc. in Gainesville. His firm has
developed more than a dozen communities and
1,000 homes in the Gainesville area.
As the residential construction industry
begins to recover from a prolonged downturn,
Rutenberg has been a leader in NAHB’s efforts
to ensure that builders have access to credit for
sound projects. Such credit is needed to enable
home builders to respond to emerging demand
in scores of markets across the nation and get the
residential construction industry moving again
as an engine of job growth in America.
“In this critical election year, we look forward
to working with Republican and Democratic
leaders to enact policies that will stabilize and
restore the nation’s housing market, a sector of
the economy that in normal times serves as a
jobs catalyst and accounts for more than 17
percent of the nation’s total economic output,”
said Rutenberg. “Specifically, NAHB will work
with policymakers to restore the flow of credit
for those who want to buy homes and those who
want to build them, to protect the mortgage
interest deduction, to correct a flawed appraisal
process that has negatively affected property
values, and to ensure a continued federal role in
the housing finance system so that buyers have
access to affordable mortgages.”
Rutenberg has been active in the NAHB
leadership structure at the local, state and
national levels throughout his career. He has
served on NAHB’s Board of Directors since
1980 and served on more than 25 NAHB
committees and councils. He has served as an
NAHB national vice president representing
Florida and Puerto Rico for three two-year terms
– 1994-1995, 2001-2002 and 2007-2008.
Florida Builder Elected
Chairman of NAHB
www.swher.com
5400 Suncrest Dr. C-6 El Paso, Tx. 79912
Ph. (915) 613-4168
Fx. (915-833-6437
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Builders Outlook issue 3 2012 11
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Do You Have to Refrigerate OpenedBottles of Mustard and Ketchup? Question: Do I have to store ketchup andmustard in the fridge once they’reopened?
Answer: Technically speaking, you don’thave to store opened bottles of ketchup andmustard in the refrigerator. But it’s a good idea all the same, since you’llget a lot more mileage out of them if you do,as condiment manufacturers like French'spoint out.
Due to their high acid content, bothmustard and ketchup will keep fine for abouta month in the pantry. But after that, theirflavor, appearance and texture will begin tobreak down and deteriorate much morequickly at normal room temperatures than in
the cooler 40° F storage conditions of therefrigerator.An opened bottle of ketchup should stay atpeak quality for about 6 months in the fridge;mustard for at least a year. And both willremain safe to consume for much longerthan that, as long as they've beencontinuously refrigerated.
Can You Freeze Cheese Successfully? My local grocery store is currently running aspecial on cheddar cheese. Is it a good ideato stock up and freeze it?
Answer: You can freeze cheesesuccessfully if you’re planning to use it forcooking purposes. Frozen cheese willremain safe to consume, but it will typicallychange texture and often become crumblyonce thawed, says the National DairyCouncil.
For that reason, you shouldn't count onserving the frozen cheddar at your nextcocktail party. But it should be fine for use incooked dishes like sauces, soups andcasseroles.
While you can freeze just about any typeof cheese, the firmer varieties — such ascheddar, Gouda and Swiss — tend to comethrough the freezing process with the leastdamage to texture and flavor. For bestresults, keep cheese frozen for no more than6 months.
When freezing cheese, cut it into portionsno larger than 1/2 pound each, and wraptightly in airtight wrapping or place inside aheavy-duty freezer bag. You can also gratecheese before freezing and place it in afreezer bag.
Be sure to thaw the frozen cheese in yourrefrigerator, and plan to use it within two orthree days.
Did youknow?
Quick kitchen tips
Builders Outlook12issue 3 2012
years
E L PA S o
BUILDERSA S S o C I A T I o n o F
B U I L D I N G E L PA S O ’ S F U T U R E S I N C E 194 6
A look back...Moments in our 65 year history
1990. The population of El Paso was 591,610. The hope of the new decade fell upon
the El Paso Association of Builders with Randy Huggins at the helm as President, Anna Gill as
VP; Will Harvey was Treasurer, and Brad Roe Immediate Past President. Patsy Zimmerman was
the EO. It was clear that El Paso would be involved in some way with world events, most
notably the middle East and some hot spots we would come to know much too well.
Around the area home sales were looking pretty good and as the talk of baby boomers enter-
ing middle age the prospects for area builders was promising. It was pretty clear that the aging
boomers would soon be moving up into their second home, more space, more expensive. Our
members were gearing up.
This was also a prime time for an association like ours as those baby boomers joined the
“greatest generation” in partnerships in business. Advertisers in the Builders Outlook were scant
but those with ads were boasting being ready for business. Southern Union Gas offered a
builder’s special, Free Gas Lights for homes they would build using natural gas appliances. John
Reich said that gas lights offered a “soft and pleasant light”, setting a nostalgic look. Gas lights
also offered security and help prevent crime, vandalism and reduce the chance of accidents. Joe
Pullen was President of HOW, Home Owners Warranty, touting the programs advantages for
owners. HOW builders were said to be the builders to count on.
The NAHB was holding its 47th Annual Convention and Exposition in Atlanta, Georgia in
January, 1991. Members were reminded to make reservations early for only $165. The 1990
meeting was held in San Diego. Economists were predicting a “slight” recession that would be
affected by actions in Iraq later on. Speaking of Iraq a member of ours Wayne Grinnell was a
subject of a news story because he was Sub Land Engineer Wayne as a civilian but Lt. Colonel
Wayne in the Army Reserves. Lt. Col. Grinnell was prepping for his deployment to Saudi Arabia
or places in that region. I guess we’ll have to ask him what actually came about from that.
In 1990 the US invaded Panama. Nelson Mandela was released from prison in South Africa.
Germany was reunited. The EXXON Valdez spill happened. “Driving Miss Daisy” won Best
Picture. The Ultimate Warrior defeats Hulk Hogan for WWF Championship; the Cold War
begins to die; Iraq invades Kuwait beginning the Iraqi war; UN authorizes use of force; the first
web page on the internet is posted. El Paso would have its most significant population growth
in the coming decade and the Iraq war would change us for decades to come.
By Ray Adauto
A Look Back is a monthly feature of the El PasoAssociation of Builders publication the Builders
Outlook. Look for more history of the El PasoAssociation of Builders in coming editions.
MARCH 20
SPEED NETWORKING
2:00 – 4:00
EL PASO ASSOCIATION OF
BUILDERS
MARCH 21
BOARD MEETING
NOON EPAB OFFICE
MARCH 21 & 22
GUN PERMIT TRAINING
EPAB OFFICES
MARCH 28
LAND USE COUNCIL
MEETING
@ NOON EPAB OFFICE
APRIL 10
EPAB SPRING GOLF
PAINTED DUNES GOLF
COURSE
APRIL 11
11:00 BOARD MEETING
12:00 GENERAL MEETING
Builders Outlook 13ISSUE 3 2012
UPCoMInG EVEnTS
Membership news
www.elpasobuilders.com
SoDA SPonSoR
Thanks to our MARCH
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ConDoLEnCES
We wish our condolences tothe family of
George Henry Jackson
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E L PA S o
BUILDERSA S S o C I A T I o n o F
B U I L D I N G E L PA S O ’ S F U T U R E S I N C E 194 6
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Builders Outlook14 ISSUE 3 2012
Industry Reports
Associates�Council
Gee whiz, where did these first two
months go? Although I was out of town for
The Bowl A Thon I heard it was a good
turnout and I want to thank all the
participants and their employers for giving
their employees the afternoon off to enjoy
the competition and camaraderie that
comes with this event. We can probably
plan another one for July when it is nice and
hot outside.
Want to learn how to earn your license
for concealed handguns? We are offering
the 10 hour class at the EPAB office March
21-22. Our Associates Council voted to
promote this class so now all we need is
you to sign up for it. It’s offered after work
so it can fit our schedules better.
Please mark your calendar for the annual
spring Golf Tournament April 10 at Painted
Dunes benefiting the Young Designers.
This year the format has changed just a
little. Instead of six man teams we will have
four man teams and the cost is $500 per
team. In talking with John Chaney our
resident Golf Guru, the prizes and goodie
bags will be great. Can’t golf? Then join
us as advertisers by promoting your
business on the course. Contact Margaret
in the office to find out how.
Once again a big thanks to all the
Bowlers that participated in the Bowl a
Thon.
Sam�ShallenbergerWestern�Wholesale
Supply
Land�Use�CouncilThe events are ever changing in the City