elpasospeak

This is from Jerry Kurtkya:

EL PASO – AFFORDABLE STEPS TO RENEWAL

# 3 – Socialize the Benefits of Growth

I have been outlining the local game that has been played out for years now which is to privatize the benefits of El Paso’s growth while socializing its costs onto the tax base. My ideas have included several low cost strategies to instead privatize the costs of growth and save the land as an environmental resource.

In this installment, I will emphasize that the city needs to see its way through to creatively recapturing the now socialized costs of development with fees that pay for the ancillary costs of development, e.g., parks and libraries and public safety. The recent “victory” of the Builders Association in city council effectively removes much of the master planning initiative instituted by a prior council. As a result, the PSB will go back to the bad old days of piecemeal lot sales and development, endangering not only our future water supply, but the natural environment, too.

Whether there is master-planned or piecemeal development, the city has to find a way to force builders to pay for the costs of development that will otherwise be loaded onto the taxpayer. If we’re going to have growth, then let’s find a way to socialize its benefits instead of privatizing them as the current model does. The council’s recent decision to allow the Monticello development to assess fees to property is one example of how this can be done using a private sector model.

Impact fees, as previously described, are difficult in Texas because such fees are explicitly identified to incremental development, i.e., the city has to use the fees for their intended purpose or risk recapture by the builder. This is only fair but it requires a level of planning-to-action that city hall is incompetent to do. Need I say, “San Jacinto Plaza?” Then again, can you imagine the outcry from the builders if realistic impact fees of $10K to $20K per lot were charged? The impact fee route may not be politically feasible here.

But another form that we could consider is for the PSB to levy a surcharge on property sales that is not specific to ancillary infrastructure, as with impact fees. In this scenario, the PSB could simply estimate the number of housing units that might be built on a parcel and add, say, $20K per unit to the price of the property. Since the PSB owns the property being sold, they are just asking the purchaser to pay a higher price on a take-it-or-leave-it basis, not as an impact fee. This “extra” money can then be deposited into a fund for the city to use for the otherwise unfunded infrastructure, but not specifically tied to the sold parcel and, hence, not legally an impact fee. I hope.

Whether with higher impact fees or a PSB surcharge this is what has to be done in some form or we just keep getting poorer in spite of our growth as costs are transferred from builders onto taxpayers. Will housing costs go up? Of course, but that is not a bad thing. Housing is too cheap here now because of massive overbuilding for many years.

Finally, I have a cynical take on why the council deconstructed the PSB’s master plan strategy and it is more than just campaign contributions from the builders. Several on council, namely Niland and Acosta, have political ambitions beyond their current offices. They will soon be facing the reality of rising city taxes to pay for all the luxuries they voted for in the stadium, downtown spending, bond issue and trolley (its operating cost), in addition to the continued giveaway of tax abatements. This is not going to sit well with the voters, so how do they pay for these things without raising taxes?

How about forcing the PSB to sell its land and the city pocketing all the proceeds? IMHO, that is what the current strategy is moving toward and why the council’s hostility toward the PSB. They, and especially Rep. Niland, are looking for a way to force the sale of PSB lands to fund their spending spree as it hits the tax roll. This is like selling the family ranch to pay off the credit cards but not stopping the spending binge. If the city can capture the revenues from sale of PSB land, the coming credit card bill is not so scary. Look for more efforts in the near future to merge the PSB back into the city.

What do you think?

NEXT – #4 A Public Sector Bank

A couple of weeks ago we heard about the west side pool project being delayed because of under-funding.

The quality of life bonds that we passed allocated $8 million to the pool and now the architects are telling us that the cost will be in excess of $13 million.

Word on the street is that many of the quality of life projects were underfunded.  The story is that our former city manager did not engage construction professionals in the estimating process.  She and her colleagues evidently decided how much everything should cost.  A five million dollar miss on an eight million dollar project sounds like something that our former chief financial officer could have come up with.

Then city council gave us a potential answer to the problem when they voted not to put restrooms in San Jacinto Plaza.

Should we build the west side pool without restrooms?

After all …

We deserve better

Brutus