UPDATE: City report cited by EPAB regarding the time to recoup growth obtained by ABC-7

Former city rep, building association VP disagree over time to recoup investment into new development

UPDATE: ABC-7 obtains city report cited by EPAB

EL PASO, Texas - ABC-7 obtained a copy of the city report often cited by the El Paso Association of Builders when its leadership argues in favor of development.

Ray Adauto, the executive vice president of the association, repeatedly stated on ABC-7 Xtra Sunday night that development pays for itself in seven years. Adauto cited a report conducted by the city, which he claimed stated that exact time frame.

The nine-page report was compiled in 2005 by now-retired city employee John Neal, the former special projects coordinator for the city manager. The topic is annexation, and breaks down assumptions about the growth of the city, the calculations and the revenue generated. ABC-7 staff and management who read the report did not find a time frame to recoup the cost of new development.

Former city Rep. Susie Byrd, who debated with Adauto of the break-even year live on ABC-7 Xtra on March 16, reacted to the findings.

"To me, when you can't support your policy direction with real facts and you have to make things up, obviously that's not the best policy direction for our community," she said.

Byrd also told ABC-7 she doesn't know why Adauto would not refer to the report she presented on Xtra, which was done by the National Association of Home Builders and commissioned by the EPAB. The report shows that local governments in El Paso don't recoup the cost of new developments until 26 years after they're built.

Byrd said she hopes the city revisits the issue of imposing higher impact fees on developers who create neighborhoods on the city's fringes sooner than the City Council agreed to March 11, which was in a year.

"They've been misled," said Byrd. "They've been provided poor information about what the real costs of growth are in our community, and I think they have an obligation to the tax payer and the rate payer to revisit the discussion."

ABC-7 called and emailed Adauto but didn't get a response. An ABC-7 staff member spotted him at Friday night's UTEP women's basketball game and asked him for comment. He declined, saying, "It's over with. I'd rather not talk about it. This wasn't supposed to be a debate anyway."

ABC-7 contacted city Rep. Dr. Michiel Noe, who also participated in the Xtra panel regarding impact fees. He said he wants to sit down with Adauto to find out where he was getting his data and plans to spend the next year finding out why the city isn't recouping the cost on new growth quicker.

"If it takes that long, we're doing it wrong," he said.


El Paso City Council may have voted to not raise impact fees on developers looking to create new homes in the city's outskirts, but the issue is still causing tension.

Impact fees were the topic of ABC-7 Xtra Sunday night. A debate broke out on set about the time it takes for the city to recoup the cost of new development. ABC-7 decided to fact check the arguments made during that tense discussion.

The fireworks flew after former city Rep. Susie Byrd cited a report that she said the El Paso Association of Builders commissioned in 2009 about the impact of home building.

"The costs don't catch up with the revenues until year 27," Byrd said.

"Year seven, let's get that straight," interrupted Ray Adauto, Executive Vice President of the El Paso Association of Builders.

The problem: Byrd and Adauto are referencing two separate reports. First, Byrd's report. "The Local Impact of Home Building in El Paso County" is from the National Association of Home Builders, prepared by the Housing Policy Department in 2009.

The debate continued, with Byrd telling ABC-7 Xtra host Maria Garcia, "This is the report, and I'll provide it to you and make it available to the public."

"It's a public issue," said Adauto.

"It says 27 years in this report," said Byrd.

A graph in the NAHB report shows it would actually take 26 years for the cost of the development to equal its revenue. And the NAHB takes into account the cost to provide education and health services to the new developments -- services not paid for by the city.

"Well- the report that was provided, if I can finish my statement --" said Byrd. 

"Absolutely," said Adauto, "but make the correct statement." 

Byrd turned to Adauto. "I'm using your report --"

"You're not using my report," said Adauto. "My report says seven years."

ABC-7 asked Adauto for a copy of the report to examine the data. But Adauto told ABC-7 he doesn't have a copy.

After two days of working with city staff -- Mathew McElroy, the director of the City Development Department, told ABC-7 it was likely boxed up during the move ahead of City Hall's demolition in 2013. McElroy also said he is asking for it to be pulled from the city's archives.

As for what was in the report Adauto is citing, McElroy said, "He's referring to a study that was done by the city, assigned by the city manager as a special project to look at annexations and whether annexations covered their capital costs."

McElroy said that study is outdated and doesn't pertain to the impact fees debate since it is dealing with annexation.

"The most recent and comprehensive one of those (reports) is the one done by the builders association," said McElroy.

When asked where Adauto may have gotten the seven-year figure he has cited in television and newspaper interviews, and op-ed columns, McElroy simply said, "I'm not sure."

McElroy added that Texas state law only allows for local governments to use impact fees to recoup the cost of water and waste water infrastructure for new developments, not all the costs included in the NAHB study.

Adauto didn't want to comment on this story, only saying in a phone conversation, "This current City Council took a long look at impact fees and decided to leave it as it is for another year, and the builders association agrees with the decision."

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