In the latest round between builders and the city over development issues, Mayor John Cook cast the tie breaking vote Tuesday night to impose impact fees to recover part of cost the $226 million cost for water and wastewater infrastructure to serve newly developed areas.

That price tag is based on the city’s forecast that 60,482 people will move to El Paso in the next decade and that 23,667 homes and businesses will built for them.

The level of impact fees City Council approved Tuesday will only generate 16.6 percent of the 10-year cost – or about $37.5 million – for off-site water and wastewater infrastructure, such as off-site water towers and wastewater treatment facilities.

City Council's 5-4 vote to approve the use of impact fees came at a rare evening meeting after more than three hours of discussion and was presented as a compromise that homebuilders did not see as one.

The vote fell along familiar lines, with city Reps. Ann Lilly, Susie Byrd, Steve Ortega and Beto O’Rourke voting yes on impact fees and Emma Acosta, Melina Castro, Rachel Quintana and Eddie Holguin voting no.

The outcome was a victory for the El Paso Public Service Board, which first sought impact fees in 1994. City Council, after studying the issue and a contentious fray with developers, voted the proposal down a year or so later.

The Council chambers were packed by more than 150 people including builders and developers who have resisted impact fees and neighborhood groups, resident representatives and people connected with city government who have supported them.

Commonly used in other cities but never in El Paso, impact fees are assessed on new construction to “make new development pay for itself,” as proponents say, rather than have existing taxpayers or ratepayers citywide pay the costs of providing major infrastructure needed to serve new subdivisions and commercial developments.

The state-mandated process that led to Tuesday’s vote took two years and included the involvement of a nine-member citizens’ advisory committee comprised of developer representatives – five in this case – and others.

Like the council, the advisory committee voted 5-4 earlier this month to recommend impact fees set at half the maximum rate the state would allow, averaging $2,050 per unit in the Westside, Northeast and Eastside areas that would require new water-related infrastructure.

Mayor John Cook, knowing the council was evenly divided over the issue, pretty much determined the action the council would take by saying he would not vote for no impact fees or the 50 percent rate or the maximum.

“If it’s 75 percent, I will vote yes,” Cook said.

That led city Rep. Susie Byrd, who had already offered her motion to approve the 100 percent impact fee allowed by state law, to amend her motion, calling for a compromise at 75 percent.

Among the builders who implored the council to defeat the impact fee proposal, or to go with the 50 percent level at most, was Bob Bowling of Tropicana Homes.

“We have a system that works very well right now,” Bowling said, referring to way developers and builders install the streets and water and sewer lines in their subdivisions while the city and Public Service Board – or other developers – install the improvements leading to their developments.

El Paso is one of few large cities, particularly in the West and Southwest, that uses such a system, and, Bowling observed, it has not adversely affected PSB’s rates, which are among the lowest in Texas and the Southwest.

Referring to the 50 percent impact fee rate of about $1,000 per residential or commercial water hook-up, Bowling said the citywide cost to raise that money would be about $8.50 per home per year or an insignificant 70 cents a month.

But adding $1,000 or more to the cost of a new house would eliminate scores of prospective homebuyers, especially in today’s recession when credit is particularly hard to come by.

Bowling, who began his presentation with an apology to Byrd for a political flyer aimed at her that builders sent out, said, “The industry has reached miles an accommodation with the winners of the last election.

“We ask you to compromise.”

Ray Adauto, the executive director of the 400-member El Paso Association of Builders, came to the microphone after listening to the city’s presentation and said, “I have to say, I feel like I went to a fertilizer convention.”

He later apologized for the remark. But it, along with the recent election campaign, revealed the rancor on builders’ part for the new fees, subdivision regulations and park requirements that have come out of City Hall since the showdown election of 2005 in which strongly pro-developer council members were swept out of office.

Adauto noted that El Paso is near the bottom of home affordability in Texas and the southern half of the nation and is last on the border.

He warned that imposing impact fees and raising home prices now is the worst of all times to do so.

Impact fees will send the message, he said, that the city is treating new homebuyers, including the incoming soldiers, differently than in the past.

David Osborn, chairman of the Greater El Paso Chamber of Commerce, echoed Adauto in expressing the chambers opposition to impact fees.

“It puts the stress on those who can least afford to pay,” Osborn said.

But city Rep. Beto O’Rourke said rising water bills will also hit those trying to get by in the homes they have and who are poorer by far than people in the market to buy a new house.

“We want to move the cost to those who are getting the benefit,” said O’Rourke, who later added that in a choice between residents and developers, he would vote for residents anytime.

A series of neighborhood association presidents came to the mic to voice their support for the maximum impact fees the city could charge.

Charlie Wakeem, president of the Coronado Neighborhood Association and one of the advisory board members, said he wold like to see the city adopt smart-growth credits to give builders and developers who follow smart growth principles a break on impact fees.

“Ratepayers are your constituents,” he told the council.

City Rep. Melina Castro challenged the truth of an email sent to various people in which Wakeem asserted that El Pasoans pick up a $2,000 tab for off-site infrastructure on every new house that is built.

El Pasoan John Neal, a special assistant to the city, and consultant Rick Giardino assured the council and the audience that Wakeem’s number was correct as stated.

"I would say he is right," Giardino said.

From Castro’s comments, it was clear she had understood Wakeem's message to say every new house costs each of El Paso's 650,000 residents $2,000 for infrastructure and that she wanted to hold him accountable for the inaccuracy.

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To reach David Crowder, write to dcrowder@epmediagroup.com or call (915) 351-0605, ext. 30