Strober-Haddonfield J.H. Brubaker, Inc. Lezzer Lumber MRD Lumber Co. Irwin Builders Supply Group All Locations All Locations Both Locations Irwin Easton 800-723-5546 www.lezzerlumber.com 570-366-0578 www.ibspa.com 610-252-6190 800-326-9562 724-863-5200 Kohl Building Products Shelly’s Lumber The Lumber Yard All 8 Locations Moyer Lumber Building Supplies All Locations www.kohlbp.com Bethlehem All Locations www.thelumberyard.com 800-578-5645 610-868-2010 215-723-5108
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Set yourself apart and earn more business, regardless of the economy.
19 Bringing the past back to life
PBA President Stephen Black discusses problems PBA solved for its members in 2007.
State eyes home restoration program that would breathe new life into Pennsylvania’s historic homes.
7 Value: Your membership pays
20 Covering your costs
Cutting through the baloney repeated in association myths.
Improve your business through better pricing and estimating jobs.
10 Green success After one year, 100 ‘green’ homes underway in southeast Pennsylvania.
12 Recycle, reuse, restore Scrapping old ideas on construction waste.
23 Member spotlight Perry Cisney of Perry L. Cisney Custom Builders finds niche in active adult market.
24 Disaster preparedness Is your business prepared for a disaster?
15 Homeowner ‘pop in’ Homesite visitation policy must strike balance between customers’ rights and safety.
17 Homeowner associations
26 Final word Hey, do you have a license for that? Builder wonders what carpenter used an adjustable level? Dancing, beauty contests and more!
Setting up a homeowners association so it shines after you turn it over.
Member Insider Member briefs . . . . . . . . . . . . . . . . . . . . . . A On the hill. . . . . . . . . . . . . . . . . . . . . . . . . . . B Truth be told. . . . . . . . . . . . . . . . . . . . . . . . C PA Housing and Land Development Conference. . . . . D, E Premier Partners . . . . . . . . . . . . . . . . . . . . F Employee costs. . . . . . . . . . . . . . . . . . . . . . G Management pitfalls. . . . . . . . . . . . . . . . . H
Keystone Builder cover designed by Chris Anderson
Keystone Builder
4 Taking away the pain
Volume 4 • Issue 6 • November/December 2007
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Jump out from the crowd
Secretary Gene Kreitzer, Lebanon County BA Treasurer Richard Clawson, Indiana-Armstrong BA Immediate Past President Bradford H. Elliott HBA of Bucks and Montgomery Counties executive vice President David Martin Editor Eric C. Wise Associate Editor Chris Anderson Assistant Editor/Publication Director Jennifer McDermitt Advertising Sales Jeff Pinwar Graphic Design Jason Gabel Address Correspondence To: Keystone Builder 600 North Twelfth Street, Suite 200 Lemoyne, PA 17043 Phone: 800-692-7339 or 717-730-4380 Fax: 717-730-4396 Web: www.pabuilders.org Advertising does not imply acceptance or endorsement of the products contained in the publication.
For information on advertising in the Keystone Builder please contact Jeff Pinwar at 800-935-1592. Please support the advertisers who have made this publication possible. Publishing and advertising sales services provided by:
2929 Davison Rd. • Flint, MI 48506 Phone: 800-935-1592 • Fax: 810-239-2231 An Exclusive Publication of the PBA Keystone Builder magazine is published six times a year by the Pennsylvania Builders Association®, Editorial Offices, 600 North Twelfth Street, Lemoyne, PA 17043. With the exception of official association announcements, the statements of fact and opinion that are made herein are the responsibility of the authors alone and do not reflect an opinion or philosophy of the officers or the membership of the PBA. Materials may not be reproduced without written permission from the PBA headquarters. Keystone BUILDER is published six times per year by the Pennsylvania Builders Association, Editorial Offices, 600 North Twelfth Street, Suite 200, Lemoyne, PA 17043. POSTMASTER: Send address changes to Pennsylvania Builders Association, 600 North Twelfth Street, Lemoyne, PA 17043. SUBSCRIPTIONS: Subscriptions available through membership to the Pennsylvania Builders Association.
I Keystone Builder • November/December 2007
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any companies tout their products as items that will “take away the pain” — in other words, remove hassles from people’s lives. These firms promote the ability of their products to make people’s lives simpler and easier. PBA offers this same benefit. We work to take away the pain! During my year as PBA president, I’ve emphasized the theme of PBA as a problem-solver for our members. Consider a few of the challenges addressed this year alone. • Members came to PBA asking for help with the onerous anchorbolt requirements in the 2006 International Construction Code. PBA took action. By late June, this requirement was fixed in the state’s Uniform Construction Code as the governor signed these changes into law. • Our members are frustrated by local government delays providing building inspections, which drives up their costs. PBA is filing a brief in a current state Supreme Court case that will open the door for marketplace competition by letting any certified building inspectors provide this service. • The theft of copper and other metals from work sites has been a growing headache for our members. PBA has worked with lawmakers to draft legislation that will, for the first time, regulate the state’s recycling industry. • Members complained about government’s imposition of regulations that are supported by incomplete or outdated scientific research. Working in cooperation with our locals in southeastern Pennsylvania, we helped draft the Data Quality Act, which passed the state Senate in June. We are continuing efforts to win House approval and the governor’s signature needed to make this bill a law. • Members asked PBA for cost-effective options for their insurance needs. Your association has delivered. The PBA-endorsed Builders Benefits health insurance program is the first-ever self-insured plan of its type in Pennsylvania and continues to expand its network of providers. Our workers’ comp program through E.K. McConkey has grown to more than $9 million thanks to its highly competitive rates. Additionally, PBA is endorsing a new general liability insurance program poised to launch this fall, giving our members more choices. On a daily basis, PBA is helping members with a myriad of problems just like these. Your association is actively working to “take away the pain.” Your dues, and your active involvement in PBA events, are what make this all possible. Thank you for the opportunity to serve the association in 2007. Please know that I will continue to stress that PBA remain a member problem-solver next year while serving as your past president. s
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On a daily basis, PBA is helping members with a myriad of problems just like these. Your association is actively working to “take away the pain.” Your dues, and your active involvement in PBA events, are what make this all possible.
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PBA Associate Vice President Rob Jones, Central Susquehanna HBA
President’s message
President Elect Ray Fertig, York County BA
By Stephen Black • PBA President
President Stephen D. Black, BIA of Lancaster County
Taking away the pain
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November/December 2007 • Keystone Builder
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Debunking 10 myths of builders association membership Myth 7: “Members have to attend too many meetings.”
by Richard Ensman ou’ve heard ‘em all before — the myths of builders association membership. You might have even believed them! So next time you hear a colleague attempting to explain why he won’t join your association or become involved with an upcoming project, raise your head, open your mouth, and begin debunking.
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Myth 1: “It takes too much time.” Leaders in many industries say that if you spend 5 percent of your work time engaged in professional development, you’ll be well on the way toward long-term success. For most people, 5 percent means 100 to 125 hours a year. And guess what? Heavy association involvement — including a convention, a few regional or committee meetings, and some behind-the-scenes telephone work — will probably consume much less than that. But in the end, you decide how much time you want to commit, whether it’s two hours a year or 50.
Myth 2: “Membership costs too much.” With rebates, discount workers’ compensation insurance, industry representation and a three-tiered membership, builders association dues represent one of the best investments you can make in your business. Dozens of members have found that PBA’s Member Rebate Program itself covers more than the cost of dues. More important, just one good idea gleaned from your membership can be worth thousands — or tens of thousands — of dollars.
Myth 3: “I already know the people in my industry.” Sure you do. But you don’t know everyone. And you don’t know the people who will join next week — or next month — or next year. And you don’t have exposure to the ideas, knowledge and enthusiasm these newcomers bring to the table. Guess what? Anytime you participate in an association event, you can always get to know someone a little better and learn something new.
Myth 4: “I’m just one person. I don’t really make a difference.” Are you kidding? All it takes is one person to set your association on an aggressive new course of legislative advocacy. All it takes is one person to organize a committee dealing with new industry standards. All it takes is one person to energize an association group with new ideas and enthusiasm. Yes, one person can be lost in the crowd. But one person can also be the impetus for exciting new initiatives.
Myth 5: “I’ve already learned what I need to know in my profession.” Even if you have full command of the knowledge in your field, in this day and age, it changes constantly. There is no finer resource than your association in keeping yourself abreast of research, news and trends. Builders with lots of experience share their knowledge while learning about generational differences and customers’ changing expectations.
Myth 6: “Association issues don’t concern me.” Just about everything your association does concerns you in some way. The building code dispute raging in another community today might affect you tomorrow. The new technology being developed in another part of the state by PBA members might help you preserve jobs and profit five years from now. Or the sales trends in a nearby community might well be on their way toward you. PBA membership alerts you to what’s going on around the state — and the nation.
Sure, associations schedule many meetings: local association meetings, committee meetings, regional meetings, special events. But ultimately, you decide what you’re going to attend and how deeply you’ll participate. When you’re not able to attend, you can still learn about meetings highlights through your local association newsletter or magazine, Keystone Builder or your colleagues. Whenever you can’t attend a meeting, you can rest secure in the knowledge that great work is still being done on your behalf.
Myth 8: “The association just helps my competition.” Long ago, even back in the time of the medieval guilds, competitors recognized that they had common interests. These included certification, product standards, industry-wide promotion, training and education, legislative advocacy and more. Only by working together could individuals pursue those interests and aggressively ensure the health and future of their industries.
Myth 9: “The association’s not really interested in me.” PBA, NAHB and local builders associations are first and foremost democratic membership organizations. Members like you select the officers and board members. On your behalf, they set the industry agenda, select the staff that serves you and establish the programs that help you become better at what you do. Nowhere else in the world (other than your own home or business) can you call, write or e-mail with a question or concern and be welcomed with such undivided attention.
Myth 10: “It’s just all too tiring.” Trade and professional associations are one of the greatest energy builders of our age. Just sit in a lively association seminar or committee meeting for an hour. You’ll feel the air thick with energy, excitement and ideas — always enough to recharge your batteries for weeks or months to come! s November/December 2007 • Keystone Builder
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Jump out from the crowd
Set yourself apart and earn more business, regardless of the economy Telling tales
by Katie Zimmerman and Eric C. Wise hen business is strong and steady, it’s easy to get lazy and complacent. But that doesn’t help you grow, at least not as much as your business could grow, if you wanted to work for it. And it doesn’t prepare you to earn and keep steady business through troubled economic times. Setting your business apart is the difference between being one of many contractors a customer may call to being the first contractor customers call in your area.
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Consult with the best consultants The best consultants that you could possibly use are readily available but seldom used. They know what you do well and where you could improve. Most importantly, they can provide the key to finding success — where you should concentrate your business to excel. Fortunately, these consultants are cheap and they are ready to give exclusive advice for your business. They are your existing and prior customers.
I Keystone Builder • November/December 2007
A contributor to “The Big Moo,” a book of pithy business advice from 33 experts, said business owners could learn a lot from sex therapists. It’s simple: Find out what your partner wants, and do that. Then do it again. With any luck, you will soon find your niche, your ticket to earning more business.
Spreading the word about your business starts with those same customers. You hope they tell their friends about you. People tend to trust customer endorsements more than ads or gimmicks. To get people talking, give them something to talk about. One universal request links practically everyone from virtually every culture and age group. Business people attending a conference, churchgoers listening to a sermon and readers buying a book or magazine want the same thing. They want what a young boy tells his grandpa when they sit down with a book: “Tell me a good story.” What are you doing to get customers to tell positive stories about you? In the September Keystone Builder, readers learned how Ray Fertig listened to a family’s needs so they could properly care for their daughter in their new home. Fertig listened and even arranged for them to visit a home in Maryland with a suitable floor plan. The family’s comments in the article show the endorsement they are likely giving their friends about Fertig and his company, Richard D. Poole LLC.
Ralph Luttrell, retired owner and president of Luttrell Homes in Elizabethtown, gave area residents something to talk about when he led a project resulting in his distinction as the largest donator to the Children’s Miracle Network. Luttrell considered and rejected an idea of donating the sale of a home in his development as too expensive. Later, with the help of his suppliers and subcontractors, he made it happen, donating a home a year. By doing so, Luttrell created an appealing story for the community and local media. “There was so much publicity it was pathetic,� he said. Through his efforts, Luttrell helped build awareness of the fledgling Children’s Miracle Network and for his company.
Earning trust through public outreach Other companies, including Waynebased Dewey Homes, also go above and beyond the call of duty to cater to their customers. Dewey Homes introduced Dewey University to educate customers about the building process and help them feel confident making decisions associated with buying a home. Dewey staff holds free seminars four times a year that explain the process from financing and paperwork to the building of the home and service after completion. Dewey is upfront and honest about the home buying and building processes, especially the importance of getting your money’s worth With Dewey University, the company earns trust from a pool of customers in a competitive market in southeastern Pennsylvania.
With this initiative, Altieri reinvented the customer’s buying experience. Homeowners get something extra with the help of design professionals. Tammy Brill, director of the design center, says that, “Customers really find it to be an enjoyable experience, and it definitely improves our customer satisfaction.� The design center helps the company to stay on track when completing a project. “When customers pick out things from the design center, everything is documented,� Brill said. “So when we
W W W N O R A N D E X R E Y N O L D S C O M
A story worth much more than the investment
begin building a home, it helps us to be more efficient since there are lists of everything and where it should be.�
Hoping for more ideas? PBA’s Eric Wise is available to speak about business ideas that break the mold at local builders association meetings in Pennsylvania. Contact him at (800) 692-7339, ext. 3003, or by e-mail at ewise@pabuilders.org for more information. s
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A new customer experience Altieri Homes broke the mold for customer care with the implementation of a design center. Customers make an appointment to visit the design center after they sign a contract for a home in an Altieri development. The new homeowners spend a few hours picking out the options for their home, including countertops, cabinets, lighting fixtures and trim — all with the assistance of an on-staff interior designer.
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November/December 2007 • Keystone Builder
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After one year, 100 ‘green’ homes underway in southeast Pennsylvania by Colleen DiMeglio uilders are in the process of constructing 100 environmentally friendly and affordable homes in southeastern Pennsylvania as an industry-driven green building program starts its second year. Members of the Home Builders Association of Bucks and Montgomery Counties created the Keystone Building Initiative to bring more economical and ecosystem-friendly homes to suburban Philadelphia. The program, which certifies homes at three levels of excellence in green building, officially began in September 2006 after two years of planning. “While the program started with Bucks and Montgomery Counties, members from all local associations in southeast Pennsylvania may participate,” Howard Cooper, the local’s executive vice president, said. The program uses standards adapted from NAHB’s model green building guidelines. These guidelines outline six primary standards including lot preparation and design, resource efficiency, energy efficiency, water conservation and efficiency, occupancy comfort and indoor environmental quality, and operation, maintenance and education. Inspectors confirm the standards of green homes and allow builders to mark their products with an identifiable, honorable seal of approval. Reshetar Custom Homes celebrated in July the grand opening of Bucks County’s first certified green community at Springtown Knoll in Springtown. Megan Reshetar, a sales associate, said the homes feature upgraded HVAC systems, spray foam insulation, Energy Star appliances, efficient lighting fixtures and lights and sustainable building products. Under the program guidelines, green homes also may feature a Cistern system to recycle rain water along with insulated foam panels in the construction of foundations, high-efficiency windows and solar panels. To build homes that earn green certification, subcontractors may have to brush up on green-building techniques. Since the veins and organs of a green home are different, learning techniques like resource efficient framing, construction waste management and the engineering of HVAC systems are vital. It may take longer to build the first green home or two, but subcontractors’ proficiency should increase quickly. After gaining some experience, subcontractors will find green homebuilding becomes routine, and builders should expect high efficiency and quality. Reshetar said in Springtown Knoll, buyers are willing to pay a premium on green homes. “They are seeing benefits for their families’ health and their monthly utility bills cut 40-50 percent.” More green building also means lower costs. “The costs for the builder will slowly reduce as the green supply-chain aspect of the home building industry matures and becomes more competitive to the vendors and suppliers,” David Hartke of Stampfl Hartke Associates, chairman of the program, said. “Developers can control costs by incorporating green elements of site design and focusing on storm water management early in the development process." s
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I Keystone Builder • November/December 2007
Photo credit: Dennis Good
Scrapping old ideas on construction waste by Kim Barger t’s simple enough: Calculate the square footage and add 10 percent for waste. Builders still use variations of this basic formula to determine how much material their construction projects will require. What’s not so simple, however, is finding a home for those leftover scraps once the project is completed. According to Pennsylvania Department of Environmental Protection records, the building industry sent 2.25 million tons of refuse to municipal and other landfills in 2005, representing about 17.5 percent of the state’s municipal waste stream. While the environmental cost is obvious, there’s an economic price as well: Disposing of construction waste can add as much as 6 percent to the project cost. The good news is that changing attitudes about recycling coupled with rising tipping fees at landfills have created new opportunities to cut disposal costs while building valuable goodwill in the community. Builders may start by trying to reduce waste, but there are other options.
everyone wins when builders donate reusable materials. “Donors receive tax write-offs based on the value they apply to the donations,” he notes. “They also save money in disposal and hauling costs.” Restore will even pick up donations if given a few days notice, saving the builder more time and money. “Local families benefit by the creation and availability of decent, affordable housing,” Harris adds, “and everyone gains through reduced landfill volumes and the preservation of raw materials not used to produce new products.” As The Loading Dock, a Baltimore-based nonprofit distributor of reusable building materials, notes, “You could build a house with what people throw away.” The Loading Dock has partnered with more than 200 manufacturers and distributors as well as 1,300 contractors and individuals in the mid-Atlantic region. Its donors receive tax breaks and reduced waste disposal charges, while the community benefits through the creation of affordable housing and a lowered volume of refuse headed to landfills.
It’s not ‘waste’
Put it back
Remodeling projects typically produce a host of reusable items. Cabinets, fixtures and studs from removed partitions can all be reused. So, why not donate them? George Harris, manager of Habitat for Humanity’s Lancaster Restore, says
Wallboard accounts for roughly 15 percent of all construction waste. Its primary components are paper and gypsum, a compound also used in agriculture as a soil conditioner. USAGypsum, based in Reinholds, Lancaster County, advises builders that they can
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I Keystone Builder • November/December 2007
both save money and establish themselves as environmentally conscious by not “dumping tons of easily recycled wallboard into our area’s already overflowing landfills.” Terry Weaver, USA-Gypsum president, says builders save money twice by using his company’s recycling service. “When the drywall hangers are finished, they typically stack scraps and leftovers in a bedroom or garage. At that point, our people come to the site, load the wallboard on a truck and haul it away. The builder doesn’t have to move it to a rolloff container, which saves payroll time, and we charge less than a hauler would to take it to a landfill.” The reclaimed wallboard is crushed, screened and sold as a soil amendment to replace mined gypsum products. The separated paper is sold as animal bedding. The process saves money for the builder through reduced tipping fees, and farmers pay less than they would for comparable mined gypsum products and animal bedding products such as wood shavings.
Foster tomorrow’s employees A quick glance at a typical toy box proves what parent’s already know: Tools, trucks and raw materials fascinate children. Many childcare and early education facilities tap that interest to teach children about the world around them and to provide early exposure to crafts and trades. These facilities gladly accept material donations to use in their programs. The child care center at Masonic Village in Elizabethtown is among the facilities offering woodworking experiences to its daily activities. “Companies who donate leftover materials to programs like ours are helping to form solid foundations with future builders,” director Rose Snyder said. “In the not so distant future, those companies will be working with these children.” The Lancaster County facility accepts non-treated wood scraps, plywood and nails, as well as and nuts and bolts. “The children enjoy working with tools and materials,” Snyder adds. “For us, it’s an opportunity to expose them to reallife experiences while teaching important safety practices.” She also stresses that positive connections in the community are valuable business assets. “The parents are all potential customers,” she said. s
LAST CHANCe TO ReGISTeR
YOU MUST CONTACT PBA BY NOV. 8 TO ATTeNd! A distinguished tradition will begin at Nemacolin Woodlands Resort Nov. 16. PBA is pleased to announce a prestigious awards ceremony honoring the best in Pennsylvania’s homebuilding industry: the firstever Builders Gala. This event is black-tie optional. Complete the registration form below
Registration fee
CONTACT INFORMATION
$75 per person, includes dinner, entertainment, music and one complimentary drink
Name(s) ______________________________________________________ Address _______________________________________________________ City ___________________ State _______________ Zip _____________ Phone __________________ E-mail _______________________________ PAYMENT OPTIONS Check (payable to PBA) _____ Visa _____ MasterCard _____ Cardholder’s name ______________________________________________ Card No. ________________ CRV No. ________ Exp. date ________
Registration deadline Thursday, Nov. 8, 2007
Additional details/questions Please contact Chris Anderson at PBA at (800) 692-7339 or visit http://BuildersGala.PaBuilders.org
Signature ______________________________________________________ Billing address __________________________________________________ _______________________________________________________________ Please return this form to PBA at 600 N. 12th St., Lemoyne PA 17043 or fax to (717) 730-4396.
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MemberInsider November/December 2007
Member briefs
PBA wins latest court decision striking down mandatory fire sprinklers In another big win for PBA members and new home consumers, the state’s Commonwealth Court issued a ruling Sept. 6 confirming a lower court decision against Schuylkill Township’s proposed ordinance requiring fire sprinklers in new residential construction. The ordinance also would have required sprinklers in structural alterations of 1,000 square feet or more. Schuylkill Township is in Chester County. PBA has been involved in litigation with the township since it first proposed this ordinance in March 2005. Members’ financial support has enabled the association to continue a lengthy court battle against governmentmandated fire sprinklers, which are not required in the state’s Uniform Construction Code. This court decision protects the UCC against needless local variations in the state’s building code that weaken its uniformity.
Poll shows discontent with homeowners associations A recent study by ServiceMagic reported 60 percent of more than 3,000 respondents have avoided, or will avoid, buying a home under the jurisdiction of a homeowner association. Three of four respondents said associations infringe on homeowner rights, while about half said they considered homeowners associations to be a “major headache.” ServiceMagic is a web site that 300,000 consumers use each month to find pre-screened, qualified local contractors for all types of home improvements.
Taxes push closing costs much higher in PA Pennsylvania homebuyers pay more than twice the national average in their closing costs, Bankrate has reported. In Pennsylvania, title insurance averages $1,372, while the national average is $707. Bankrate said government fees in Pennsylvania average $6,270, more than four times the national average of less than $1,500. If closing costs are limited to lender fees, Pennsylvania
homebuyers face the fourth-highest closing costs among the 50 states (New York claims the highest, but its government fees are charged to lenders and reported as a lender fee for comparison).
Pennsylvania executive officers honored The Executive Officers Council of the National Association of Home Builders announced the winners of their annual Awards of Excellence during their annual meeting in Long Beach, Calif., during the week of Aug. 7-12. Several Pennsylvania executive officers won awards including Howard Cooper of Bucks and Montgomery Counties HBA for best member recognition program and Richard Brown of Building Industry Association of Lancaster for best special event publication. Both men were named to the Executive Officers Council Board of Directors for Region A. Other executive officers who won awards include Ron Rohrbach of Berks County HBA for best public relations program and Nicole Foleno of Pocono BA for best directory published. Lori Gillon of York County BA received an award for best special interest web site, and Bette Eagan of Pike County BA obtained the award for best fundraising program to a targeted specialty group.
Citizens group drops zoning challenge, moratorium averted A group of concerned citizens has dropped its challenge to the legality of North Cornwall Township’s zoning, land-development and subdivision ordinances, which is expected to end a building moratorium in this region of Lebanon County. The township had said no building permits would be issued until the supervisors considered and re-adopted the ordinances in October, and the ban had been in effect for 39 days. This recent development should lift the building moratorium. PBA staff attended an August meeting of the supervisors with members of the Lebanon County Builders Association to speak out against the building permit stoppage. s
Member Insider • Keystone Builder
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Registration concerns grow in fall session
On the hill
As legislators returned for their fall session, the issue of contractor registration returned as well as a new development, a bill that proposes registration of new homebuilders — based on problems with one homebuilder. Background: PBA will not oppose the registration of home improvement contractors under the provisions of SB 100, which was successfully negotiated with Sen. Robert Tomlinson, R-Bucks, and Attorney General Tom Corbett. PBA objects to a guaranty fund established in a similar measure from the state House of Representatives, HB 507. Proposal: Following media coverage of homebuyers’ allegations against a builder in northeast Pennsylvania, Rep. Frank Shimkus, D-Lackawanna, introduced HB 1821, which calls for registration of new homebuilders. Reaction: PBA questions whether fraud by new homebuilders is a widespread problem. In addition, PBA members identify a difference between hiring a contractor to seal a driveway and signing a contract for a new home — the documentation. While Tomlinson’s bill helps authorities track down con artists and requires consumers to sign written contracts for home improvements, building a new home requires extensive contractual paperwork and building inspections. Update: PBA opposes expanding the contractor registration bills to include new homebuilders and opposes the unneeded HB 1821. What builders are saying: “The concept of contractor registration isn’t altogether bad, but the devil is always in the details, and in this case, it’s in the ‘guaranty fund,’” builder Jim Hutchins said.
Renewed interest in impact fees discouraging to builders Legislators continue their struggle to fulfill campaign promises and reverse rising school district property taxes by shifting the tax burden. Despite a housing recession, antigrowth legislators support laws to allow school districts showing modest growth during the past five years to impose fees of thousands of dollars for each new home in the district. Proposal: Rep. Rich Grucela, D-Northampton, introduced HB 71 to allow “growing” districts to impose educational impact fees. Update: As details of the deteriorating status of Pennsylvania’s highways and bridges have emerged, some legislators have discussed expanding developers’ responsibilities for paying for transportation improvements, including expanded use of transportation impact fees. What builders are saying: “Impact fees are a clever way for government agencies to charge a small group of people for improvements that benefit everyone,” Roger Zimmer of Zimmer Grove Homes said. “State tax dollars should be used for school and transportation improvements, but no one wants to raise taxes. Consumers may not want their taxes raised, but when they go to buy a home five years down the road and they can’t believe how much it costs, we have to explain to them how impact fees raise the costs of homes. The truth is, when PBA fights against these fees, they are essentially fighting for the consumer.”
PBA balks at stalling tactic: Local officials want moratorium to revise comprehensive plan Some municipal officials are supporting a bill that would allow them to decree a building moratorium for up three years while they develop a new comprehensive land-use plan. Proposal: HB 904 would allow local government to stall development ostensibly in order to develop a new comprehensive land-use plan, subdivision and land development ordinance or zoning ordinance. Reaction: PBA members oppose efforts to halt homebuilding, an industry that generates millions of dollars annually for the state’s economy. PBA members assert that elected officials’ failure to act in the past does not prove a moratorium is needed, especially since few municipalities use the municipalities planning code to its full potential. What builders are saying: “As a past planning commission member and a current zoning board member, I do not understand why we would ever need to take a ‘timeout,’ because that is essentially what this is,” former PBA President Scott Cannon said. “If we are doing our jobs, we would already be reviewing these things on a constant basis, so what makes a stoppage relevant?” s
I Keystone Builder • Member Insider
9
things your
customers will never tell you
by Richard Ensman ake a serious mistake, and your customer will let you know about it — fast. Payment errors, quality defects and other obvious problems will motivate your customer to call quickly. But what happens when your customer perceives a less obvious, intangible problem involving your communication style, temperament or personal behavior? Will your customer call you? Not likely. If your customer perceives the problem as serious enough, he might even fail to buy from you in the future — and never tell you why. Worse, even if your customer generally likes the way you do business, he might happen upon an alternative supplier who offers something you don’t and quickly change his buying habits.
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What won’t your customers tell you?
1.
You patronize me. I don’t like the simplistic way you describe your product. I feel as if you’re talking down to me. Lesson: Always ask your customer whether she wants more or less detail. You don’t keep up with trends. I want to be able to send questions and product queries by e-mail, but I’ve discovered you’re not “wired.” That makes me think you might not be up on other things as well. Or: You always seem a step behind the latest product developments. Lesson: Each year, identify three of the top business and technological trends in your field, and develop a plan to stay current. Equally important, let your customers know you’re staying current. I’d buy more if you asked me. I have so many needs, but you don’t seem to recognize them. Maybe you provide services or have options I would like, but I have no way of knowing. Lesson: Instead of simply describing your products to your customers, ask how you can help them. I don’t like your manners. I don’t like the way you try to do two things at once while you’re talking to me. Or: You interrupt me when I’m talking to you. Or: Your failure to use formal titles bothers me. Lesson: Mind your manners.
2. 3. 4.
5.
Your style upsets me. I don’t like the salty language you use in my presence. Or: Things always seem disorganized in your office or shop. I can’t help but wonder if you’re all that organized. Or: I’m bothered by what I see as a lack of professionalism in your habits. Or: Your procedures appear overly bureaucratic (or not formal enough). And the list could go on and on. Lesson: Watch your customers’ interpersonal and professional demeanor. Respect it by watching your demeanor. You’re inconsistent. Ninety percent of the time I know you’ll do exactly what you promised. But it’s the other 10 percent that I’m never sure about. Lesson: Aim for 100 percent consistency. If you’re not going to be able to meet the customer’s terms, let her know the minute you realize there might be a problem.
6.
What happens when your customer perceives a less obvious, intangible problem involving your communication style, temperament or personal behavior?
7.
You don’t respect my time. I have to wait on the telephone or in person when I want to talk with you. When I leave a message, you don’t call back promptly, and this inconveniences me. Lesson: Save your customer’s time before you save your own. You were rude to my employees or family. All she wanted was some simple delivery information. She didn’t deserve the run-around you gave her. Lesson: Treat customers’ employees or family members just as you’d treat your customers. I’m talking to the competition all the time. Face it: It’s a dog-eat-dog world out there. I want to save money and time, and get the best deal I can, so it’s only natural that I keep looking for other suppliers of goods and services. Lesson: Ask your customers to provide regular feedback to you. Bottom line: Listen to anything your customers tell you. But equally important, stay attuned to what they don’t tell you. The result: valuable clues that can keep those all-important customer relationships intact for a long time. s
8. 9.
Member Insider • Keystone Builder
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Eden Resort, Lancaster, PA
E C N E
6.5 Hours Approved by AIA and PA Dept. of Labor & Industry for UCC
Day-1 Housing
January 23
Day 1 of the conference focuses on building technical issues related to the delivery of houses. Plan on attending this year’s conference to get the latest information on emerging technologies and learn how to resolve problems facing the industry. This conference is intended to bring together all sections of the housing industry including builders, remodelers, code officials, educators, design professionals and modular and HUD code builders. Topics may include: • Emerging Green Building and Energy Efficiency Issues • Green Building Design • Solar Systems that Work • Energy Code Enforcement – Lessons from the Field • Federal Energy Efficiency Tax Credit for Builders • Wall Bracing • Common Building Failures • Deck Construction and Inspection • Insulating Basement Slabs • Inspecting Modular Homes • Foundation Systems for Relocated Manufactured Houses • Modular Homes and Energy Star
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Continuing Education
Register by December 14th and save $10 Limited Available Space
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January 24
Day 2 of the conference will focus on issues on emerging planning, design, and regulatory issues affecting the land development industry in Pennsylvania. Come hear about challenges facing the industry and network with other development professionals. This day’s programs are intended for anyone involved in land development activities including builders, developers, design professionals, planners and regulatory officials. Topics may include:
January 23 & 24, 2008
F N O C
PA HOUSING & LAND DEVELOPMENT
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• Stormwater BMPs and PA’s Residential Site Development Standards • Cost Evaluation of Decentralized vs. Centralized Stormwater BMPs • Innovations in Sediment and Erosion Control • Nitrogen limits in Chesapeake Bay Watersheds • Update on PA Residential Site Development Standards. • Residential Street Pavement – How to Increase Performance and Reduce Cost • Cost Savings and Environmental Benefits of Alternative Cul-De-Sac Designs • Innovative Traffic Calming Designs for Residential Streets • What’s Behind the Rise in Costs of Housing?
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Continuing Education 6.5 Hours Approved by AIA and PA Dept. of Labor & Industry for UCC.
PROGRAM SELECTION ❏ DAY 1 – HOUSING ( January 23, 2008) ❏ DAY 2 – LAND DEVELOPMENT (January 24, 2008) ❏ BOTH DAYS – HOUSING & LAND DEVELOPMENT
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PBA Premier Partners Gold level sponsors Wells Fargo Home Mortgage By utilizing our extended rate lock products, we offer our builder partners the opportunity to eliminate market risk, easing buyer concerns and allowing us to sell more homes more profitably. Contact Frank DiMaio at (610) 564-8105 for more information. Builders Total Control — American Home Bank Builder’s Total Control (BTC), a division of American Home Bank, was formed to help builders sell more homes. BTC allows builders to meet the customer demand for one-stop shopping, gain control of the mortgage finance process and share in the economic rewards of a mortgage company. Contact Yana Peifer at (717) 285-6688.
Silver level sponsors Strober Building Supply Strober Building Supply, a Pro Build Company, is dedicated to the building industry. Strober is always on the cutting edge of new products and services, as well as providing technical and building industry knowledge. Our involvement at the national, state and local builders association is extremely important to Strober. For more information, please contact Michael Kurpiel, market development manager, at (800) 883-8800 ext 665. Residential Warranty Company LLC By providing an RWC-insured warranty on your new or remodeled homes, you distinguish your company from the competition. Only highly qualified, financially sound, ethical builders become RWC members. RWC’s warranty also provides the benefit of an effective dispute process including free mediation and binding arbitration, if necessary. RWC offers a variety of warranty choices including our exclusive Customized State Warranty, providing structural coverage from day of closing at a low, flat rate for homes priced up to $1 million. Please contact Lori Fetterhoff, account executive, at (800) 247-1812 extension 2147 for more information. Comcast Imagine if you walked into your brand new home and found the cable TV service already activated — and you didn’t even have to pick up your phone? We can make it happen for your customers when you participate in Comcast’s Advanced Connected Homes Project, at no cost and little effort on your part. For more information, contact the representative in your area: Western PA: Don Jones or Heather Krause (866) 926-3463 Eastern PA (Philly Metro): Jim Jenkinson (215) 642-6489 Central PA East: Dave Fouse (800) 332-7947 (Lancaster, Lebanon, Berks, Schuylkill, Scranton) Central PA West: Bryant McAfee (800) 332-7947 (Harrisburg, York, Gettysburg, Hanover, Chambersburg, State College) Chase Chase is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset and wealth management and private equity. Contact (877) CHASEPC for more information.
I Keystone Builder • Member Insider
Ferguson Ferguson is one of the leading distributors of plumbing supplies and heating and cooling equipment in the United States. Contact (610) 715-1479 for more information. Builders Land Transfer Builders Land Transfer, a division of Affiliated Settlement Services Group LLP, is a full-service national title insurance agency committed to excellence in service for our builder clients, their customers and lenders. We are dedicated to providing the most comprehensive and trusted title work for the area counties, including but not limited to: Cumberland, Dauphin, York, Adams, Lebanon, Perry, Lancaster and Franklin for over 32 years. Contact Wayne Keech at (717) 975-7839. Weyerhauser The world’s largest integrated wood products company is also the largest engineered wood products producer and supplier to the residential construction market with manufacturing, delivery and technical support teams all integrated under the Ilevel brand. Please Contact Fernando Garcia, customer service representative, at (800) 732-0200, ext. 221, with questions or for more information on our full line of residential wood products.
Bronze level sponsors 2-10 Home Buyers Warranty Watch profits go up and inventory come down when you offer the protection of 2-10 Home Buyers Warranty! Ask about our new home, pre-owned home and remodeler’s warranty programs. The Lumber Yard The Lumber Yard is known for providing contractors with competitive prices, quality products, professional services and customer attention that is second to none. Pennsylvania Housing Finance Agency Do you ever have potential customers say they’d love to do business with you but they don’t have the extra money? Learn about Pennsylvania Housing Finance Agency’s homeownership programs and their new Renovate and Repair home repair program. PM Computing PM Computing offers the ultimate next generation of home technologies for in-home connectivity and control. s
Visit
at www.pabuilders.org
Commit to providing a good workplace and your employees will stay and save you money
by Colleen DiMeglio eplacing an employee can be an expensive and extensive task. Employee turnover creates intangible problems that cut productivity and profits. Lack of intellectual resources, slacking productivity due to a heavier burdened and motivationally drained staff, and the cost of hiring and training a new associate contribute to company losses. Turnover can cost a business anywhere between 50-150 percent of the employee’s base salary, according to Bliss and Associates, an executive business consulting firm from Butler, N.J. While turnover is inevitable, companies can prepare for the hit. First, a company should have a plan of action to anticipate the unavoidable. The best maneuver is to immediately work on recruiting a new hire for the empty position. Sometimes this can be done within the company, but if not, it is best to try to avoid a recruitment process flooded with arbitrary steps and requirements. The more stages added, the more time and money a business loses. The bottom line: Make the recruitment and hiring processes straightforward. If the candidates do not stand out at interviews, it may be to a business’ advantage to use an employment agency. Mike Murtha, global division manager of JFC Staffing in Camp Hill, said that a staffing agency is one of the fastest growing industries. “Companies want to focus on the core of the business and want to leave hiring to specialists,” Murtha said. An employment agency will incur costs for replacement, but will save a tremendous amount of time by allowing a company quick access to qualified candidates. When an employee is hired, one way to speed his or her learning is to hold employee seminars, which help familiarize the new hire with the business, co-workers and their job. Informal, short sessions acquaint new hires with other workers and their roles while providing personal connections.
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Robert Gudgel, professor of human resources at Penn College of Technology in Williamsport, said companies who host these seminars are far better at retaining their employees. More importantly, training yields immediate productivity gains. “Companies that spend money and time to continue training employees have better financial results than those who do not,” Gudgel said. Hosting training seminars shows the new employee that the business cares about him or her, building trust with the company. Despite best efforts to keep employees, all businesses eventually must make a transition to a new employee. During employee transitions, managers must react to avoid losing customer loyalty. First, they should alert customers to the change, providing a contact for the transition. Second, they should introduce the new member of the team so customers know the new contact. “We successfully handled (some transitions) by offering another competent resource, usually ‘free’ for a short period of time in an effort to minimize the cost of the transition period,” said Lori Daniels, principal of Momentum Business and Technologies consulting firm. To minimize the effects of a transition, employers should use cross-training to help patch the gap left during transitions. When employees are cross-trained, it’s easier for them to temporarily replace the lost employee with a familiar face from within the same company, keeping the customer’s sense of trust with the business. Finally, it’s important for business owners and managers to be understanding and patient, both with clientele and staff, for the unexpected during the transition. s Member Insider • Keystone Builder
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Avoid these management pitfalls by Richard Ensman f you’ve been in the business of managing people for even a short period of time, you’re well aware of the human relations problems that can so easily befall you, including employee dissatisfaction and complaints, compensation disputes, sudden resignations, maddeningly poor performance and lawsuits and regulatory complaints. Ask yourself if any of the following apply to you and consider ways to improve. Better management boosts productivity and efficiency, so it’s well worth the time.
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Micromanaging your employees Workplaces are full with stories of managers who insist on prescribing every move that employees make — right down to the minute they take coffee breaks. There’s nothing wrong with providing hands-on guidance and training, but many employees feel more comfortable if a peer or mentor, not the supervisor, provides training. The lesson: Devise a formal training program for your people. Involve their respected peers.
and coaching. Quality supervision is one of the prerequisites of employee satisfaction and longevity. The lesson: Establish a periodic (such as once-weekly) supervisory meeting. Allow your employee to set the agenda for the first part of the meeting, and bring up whatever is on his mind.
Discriminating against your employees While you should always rely on advice of legal counsel in defining and combating discrimination, a good rule of thumb is that any policy or practice that treats members of one demographically ordered employee group different than others may constitute discrimination. Preferred assignments or compensation going to one age, racial, or ethnic group, for example, could land you in regulatory or legal trouble. The lesson: Base employee decisions and assignments on skill and experience, and say so in your policies.
Failure to train
Employees should be encouraged to be “self-starters.” But even the most highly skilled and motivated employees need support. More than anything else, employees need to know that someone is interested in their work and striving to help them become part of the workplace community. The lesson: Check in with employees, especially new employees, on a regular schedule — weekly, or even daily, if necessary.
True, you try to hire employees who have all of the skill sets you need for superior performance. And true, you have the right to expect that each employee will display those skills within a reasonable period of time. But if you assume that your employee knows everything — or has the inherent capacity to learn it — you’re setting yourself up for disappointment. The lesson: Engage each employee in an orientation to your place of work and to routine processes and procedures. If you observe a few skill deficiencies, be sure to suggest or prescribe additional training.
Failing to supervise
Failure to listen
Supervision is not the same as training or providing guidance. While many styles of supervision exist, all involve establishment of objectives, performance management, problem-solving
Just as it’s too easy to assume that employees should know everything, it’s equally easy to assume that they don’t know enough. New employees in particular often notice things that long-
Ignoring your employees
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I Keystone Builder • Member Insider
Better management boosts productivity and efficiency, so it’s well worth the time. standing employees don’t: inefficient routines, waste and hidden opportunities. The lesson: Listen carefully when a new employee brings you an idea or observation. Better yet, make it a point to sit down with your new people at periodical intervals over the first year, just to solicit their observations and suggestions.
Ignoring accomplishments In today’s busy work world, it’s very easy to focus attention on things that don’t go right — and to forget the things that are going well. Yet business strength and growth is often predicated on the ability of managers to celebrate success, and build on it. The lesson: Thank and congratulate employees who have done something well. And if you’re trying to encourage top-flight performance, make it a point to recognize employees who exhibit the behavior and accomplishments you’re trying to foster. The result will be a workplace increasingly marked by a culture of success. s
Illustration by Samantha Dellinger
Handling the homeowner ‘pop in’ Homesite visitation policy must strike balance between customers’ rights and safety by Jennifer McDermitt hether a customer is building a $100,000 home or a $500,000 home, the construction process brings about a mix of excitement, curiosity and anxiety. One way many customers ease the anxiety and satisfy that curiosity is to visit the homesite — often. But what may seem as a harmless visit could turn into disaster, because the truth is, homesites are dangerous places full of safety hazards of which the average consumer is unaware and untrained to avoid.
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Learning lessons the hard way Joe Mackey of Target Homes feels that a well-defined homesite visitation policy is a builder’s responsibility to the
customer. “Homesites are full of potential hazards, and if they visit the site without anyone around, they may have questions and not get the right answers, which creates a lot of anxiety,” he said. Mackey requires all his customers schedule their visits and be accompanied by a job foreman. Mackey admits, however, that his strict policy is sometimes questioned by the customer, and one customer, in particular, had to learn the hard way why he crafted such a policy. “I had one guy who really didn’t like the policy, but after visiting another builder’s site who didn’t have a visitation policy, he became trapped under a stack of drywall. That shook him up and he told me he now understood why I feel so strongly.”
Some builders have been forced to create homesite visitation policies in their contracts as a direct result of incidents on the site. Greg Grigalonis, president of Alexander Custom Homes, started to think about his policy after his wife was injured. “She was walking right next to me and stepped on a nail, which went right through her foot. I thought, ‘If this could happen to my wife when I am right there, what could happen to a customer, or a customer’s five-year-old kid, if I am not?’” he said. Grigalonis says the horror stories told by other builders at his local association meetings, the Lehigh Valley BA, are also enough to make a builder think twice about having a visitation policy. Continued on page 16
November/December 2007 • Keystone Builder
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homeowner ‘pop in’ Continued from page 15
I have a right to be here Some builders choose not to have a visitation policy simply because they feel it is off putting to the customer. Stephen Black, PBA president, said, “Here you are, making the sale and signing the contract, and you have to tell them that they can only visit their site when you say it is okay. They feel that they have every right to be there, because you are building their home.” Black instead uses a contract that tells the customer that they are responsible for any injuries incurred on the site, but he allows homeowners to visit any time they like. “I believe a carefully constructed contract that has been reviewed by a lawyer is a builder’s best defense,” he said. Frank Mittman, president of Endless Mountain Construction, agrees. “I don’t like to put any restrictions, but I do stop what I am doing whenever they visit and
personally walk them through in case they have any questions.”
Outthinking the clever customer Unaccompanied homeowner visits not only create safety hazards, but also some customers use the opportunity to try to make changes. Some may try to do something themselves, like installing stereo cables, while others may try to give orders to subcontractors. Black said, “I had a customer tell an electrician that they had discussed making some changes with me, and they tried to get him to do it.” As with a liability clause, Black says clear language in the contract that explains the process for making changes is key to avoiding problems. He also feels that good communication with subcontractors is important. “My subs tell me right away if a customer is interested in making changes, and I can then contact
Strober Building Supply MORRISVILLE, PA (800) 234-2581
EAGLE, PA (610) 321-0970
EASTON, PA (610) 252-3142
To find our other locations, visit us at www.strober.com
16
I Keystone Builder • November/December 2007
the customer and go through the proper change order process.” Grigalonis said that even the potential customer can pull one over on a subcontractor. “One time, a couple was interested in a spec home I was building. They talked a subcontractor into giving them the combination to the lockbox on the front door, telling him I said it was okay. I caught them wandering through the home when I drove by one evening, and they were pretty embarrassed. Needless to say, I had a pretty serious talk with my subs after that!” While many of these stories make great anecdotes, Mackey points out that not having a visitation policy or liability statement in the contract can be devastating. “Builders need to take this seriously, because you never need a seatbelt until you need one,” said Mackey. “Something like this could destroy the business you worked so hard to build.” s
Setting up a homeowners association so it shines after you turn it over
Photo by Farhan Amoor
by Kim Barger n 2006, an estimated 286,000 association-governed communities contained 23.1 million housing units and 57 million residents in the United States. With these numbers still on the rise, developers are striving to learn more and more about the world of homeowners associations. Here is some information that will help you ensure that your next homeowners association project goes as smoothly as possible.
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Where should you start? According to Steven Brumfield, assistant director of community associations with Toll Brothers in Horsham, the first step you should take is to hire a good outside counselor who knows the laws in your state. An experienced community association attorney can draft a good set of governing documents that will be essential throughout the process. These documents should be unique for your community and should address all the specific situations your community may encounter. “Don’t be afraid to spend money,” Brumfield advises.
Once you have hired an outside counselor, Brumfield recommends hiring a good, proactive property management company and enlisting in its services very early on. The management company can assist with items such as comprehensive budgets and challenges that may not occur to the developer. Brumfield again advises developers not to be afraid of spending money in this area. “Pay for the experience, and you will get the dividends,” he said. The earlier you can get a management company involved, the better, he added. Budgeting is another crucial early stage of setting up a homeowners association. A report developed in partnership by the Community Associations Institute and the National Association of Home Builders states that, “The developer and the management company preparing the budget should emphasize that the budget is based on proposed plans and developer estimates and is always subject to change.” Brumfield adds that, “Budgets should be drafted as though the community is fully completed, and then work backward.” Continued on page 18 November/December 2007 • Keystone Builder
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homeowners association Continued from page 17
Transition is key
By definition, planned communities offer a more efficient use of land than unplanned areas in which developments leapfrog over each other into any available space. — Frank Rathbun, vice president of communications and public relations for CAI in Alexandria, Va.
While there are numerous definitions for transition, Brumfield defines transition as the point when the association is completely controlled by its membership (the homeowners). Frank Rathbun, vice president of communications and public relations for CAI in Alexandria, Va., said the transition process is an absolutely crucial period for the longterm stability and viability of the community. “It is critical that there is a lot of coordination,” he states. The best transitions exist when all parties’ interests have been accurately communicated to one another. The CAI/NAHB report states, “During the developer control period, a successful communications system can forestall the development of cliques and factions, enable the association to provide services that owners want, and help owners develop a sense of trust in the developer, reducing or eliminating the acrimony that often follows the transition to owner control.” The report also adds that an effective communications program includes homeowners, a realtor/on-site sales force, managers, developers and attorneys. Both Brumfield and Rathbun agree that the transition process starts from the day the first shovel goes into the ground. From the start, you should begin to operate the association as though it were 20 years down the road. A final aspect of the transition process to which it is important to devote attention is the amenities. You should always make sure that the amenities have been completed satisfactorily and deeded properly to the association. “Just because an amenity package has been completed, does not mean it has been officially deeded,” Brumfield states.
Educate the members To make the transition as smooth as possible, the developer can educate members of a young association so they can effectively assume control. The key is involving the members in the process early on. Ultimately, the homeowners will be respon-
sible for the association, so the earlier you can involve them, the better. Not to mention, having members involved early on can take some work off of the developer’s shoulders. Brumfield recommends enlisting members’ help on committees to get them involved. “The developer can’t make a community; the community has to make itself,” he states.
Special situations
As baby boomers age, “55+” communities are gaining popularity. “We’re all going to be building them at some point,” Brumfield said. One thing to consider when working with a 55+ community is that the membership is generally more sophisticated. This can mean that the members possibly have more time to analyze the operation of the association, which can lend more scrutiny to the process. Because of this, 55+ communities can be more challenging than the average association. Brumfield recommends having experienced managers who are great communicators. An ideal situation is to find a management company that has experience with active adult communities.
Developers can benefit from homeowners associations An effective and functional homeowners association can greatly benefit a developer. Toll Brothers views the community association as an integral part of the products they sell, Brumfield says. A key selling point of homeowners associations is the lifestyle they offer. Homeowners associations usually offer a detailed amenity package and a staff that coordinates social activities. Services are also a big plus. Associations offer a unique experience because they offer services such as grass cutting and exterior maintenance. According to Rathbun, “Community associations exist because they offer choices, lifestyles, amenities and efficiencies that people value.” Another way developers can benefit from homeowners associations is in their efficient use of land. “By definition, planned communities offer a more efficient use of land than unplanned areas in which developments leapfrog over each other into any available space,” Rathbun states.
Are you ready to get started? Residential Specialists 14324 Guinston Forge Rd., Airville, PA. 17302
Office (717) 927-8829 (717) 755-1444 Email: americanplumbing@hughes.net Sam Arnold, Owner
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I Keystone Builder • November/December 2007
“It’s all about good, effective planning, and that must begin before the first home is sold,” Rathbun says. “That will make the community more successful for the developer and for the eventual homeowners.” “Just as you hire experts to develop your property and build your homes, you should use experts to plan and ultimately manage the community,” Brumfield said. “There is really no substitution for management and legal expertise, both during construction and sales and during the transition to homeowner control.” s
Bringing the past back to life
State eyes home restoration program that would breathe new life into Pennsylvania’s historic homes by Jennifer McDermitt ttention remodelers: If you had the opportunity to live in a historic home tax and rent-free in return for restoring it, would you do it? Many say they would, and a recent New York Times article reported that curatorship programs that have been developed in states around the nation are proving to not only be successful, but also are helping to preserve and restore some of our nation’s most beautiful properties. According to the Aug. 30 article, these programs have been created because many state governments own more houses of historical interest than they can afford to maintain, mainly on farms acquired decades ago and converted to parkland. Now states have begun turning these properties, along with some of the surrounding land, over to live-in curators, who take on restoration responsibilities in lieu of paying rent or taxes. Pennsylvania faces the same situation as many of these states in having several historic homes in desperate need of renovation, but lacking the funds to do so. The New York Times article also stated that Pennsylvania parks officials met to discuss the establishment of the park system’s first curatorship in an 18th-century farmhouse outside Philadelphia. Terry Brady, deputy press secretary of the Pennsylvania Department of Conservation and Natural Resources, says a meeting did occur, however, the building being considered would not have been a good candidate for this type of program and the project was rejected. “The state is well aware of these other programs, however, and they are conducting the proper studies to bring a similar program to Pennsylvania,” he said.
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The ins and outs of the program According to the article, as part of the arduous application process, potential resident curators are asked to submit
A curatorship program could preserve a historic home like this one in Sellersville, Bucks County. The house was built in the 1770s, a classic Pennsylvania fieldstone farmhouse. The house was used as a residence until 1991 when Marty Simon and his wife, Dr. Vera Cole, purchased the property for use as the offices for The Simon Group, a business-to-business marketing communications agency.
detailed restoration plans and budgets (usually at least $150,000), and to sign long leases (in Massachusetts, typically for 25 years, with options to renew; in Maryland and Delaware, for the life of the leaseholder). A state inspector visits at least once a year to monitor the work — exteriors have to be brought back to their period look, and vintage interior features cannot be drastically altered — and the projects can last many years. Lynn Wenger, president of Jonestown Bank and Trust, is in the middle of his second historic home restoration and sees the benefit of having the state involved in the restoration process. “Sometimes, people, even when they have good intentions, butcher a home in an effort to restore them,” he said, “It’s nice to give them some guidelines.”
Existing tax credit a good start Pennsylvania is not without any incentives to encourage historic home preservation. A federal 20 percent tax credit, the Rehabilitation Investment Tax Credit, was created in 1976, and since then, 2,147 certified restoration projects have totaled $3.8 billion in investment dollars in Pennsylvania communities, according to Bonnie Wilkinson-Mark, historical architect for the Pennsylvania Historical and Museum Commission. Historic buildings must meet five criteria to earn the credit:
• The building needs to be listed on the national register as historical. • The building must be used for an income producing purpose, i.e. commercial. • The building must meet the Secretary of the Interior’s requirements on restoration. • The amount spent on the restoration must exceed the value of the building at the beginning of the rehabilition. • The rehabilitator must own the home for five years following restoration. Wilkinson-Mark notes that there are other limitations to the tax credit, and anyone interested should work with an accountant to ensure eligibility.
Bringing it home Brady said the state will continue to study these other programs and implement a similar program in Pennsylvania sometime in the future. “This is not a dead issue,” he said. “We just need to take our time to consider all the legalities that come with leasing to make sure it is a solid program that benefits everyone.” Wenger hopes the program comes through. He feels that curatorships are a great way to get people involved in home restoration, which is important for a state like Pennsylvania. He said, “If we lose these homes, we lose our connection to the past, and there will be no sense of ownership in our neighborhoods anymore.” s
November/December 2007 • Keystone Builder
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Covering your costs Improve your business through better pricing and estimating jobs
by Kim Barger ow would you like to increase your profitability by two to five percent? Charles C. Shinn of Shinn Consulting said you can achieve this increase improving estimating and purchasing. A frequent speaker on this topic, Shinn shows how good estimating and purchasing practices are essential to obtaining superior profitability. Is your company on track to increase your profitability? Here are a few tips to keep in mind when it comes to pricing for profit. Make sure you’re charging enough. According to Mike Graham, a remodelor from Mercer County and member of PBA, a 50 percent markup is the minimum for the remodeling industry. If your markup is any less, you’re generally asking for problems, he said. Graham also pointed out that a common mistake is meeting your competitor’s price. Make sure your estimate is accurate. Shinn said that an accurate estimate is the first step in controlling construction costs. Ideally, you should aim for a variance of one percent or less. Not only is an accurate estimate critical for cash flow, but it is also key to the acceptance of purchase orders. Don’t leave anything out. If you can count on one hand the number of items that you typically figure into the price of your jobs, then you’re probably not factoring in enough. A few costs to consider include: • Materials • Theft • Payroll • Vacation • Holidays • Unemployment • Health insurance • Retirement • Advertising • Vehicles • Legal fees • Office utilities • Interest on debt • Rental equipment
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Track your labor costs. Shinn said knowledge of your costs is key to improving your profits. It is a good idea to track costs for each category of work that you do, and have your employees keep timesheets that show what they worked on. This way you can compare different jobs and see where you are making the most profit. 20
I Keystone Builder • November/December 2007
Maintain good records. If you’re not already keeping good records of your estimate workup, now is a great time to start. Shinn recommended recording items such as calculations, telephone logs, bidder tracking, quotes, bid analysis, dates for anticipated price increases and required lead times and durations. Negotiate! It is perfectly acceptable to negotiate some of your purchases in order to provide a more competitive estimate. Shinn suggested negotiating possibilities such as price, terms and conditions, payment discounts, cooperative advertising, manufacturer rebates and training. By negotiating your purchases, you may be able to lower your estimate without sacrificing profit. Change things up. Doing things the same way while expecting different results can be a costly mistake. Graham is a big fan of making changes. It doesn’t matter what the change is, he stated,
as long as it’s a change. One change Graham likes to make with his employees is to offer bonuses instead of raises. Raises can drive you out of business, he claimed. He added that a bonus system that shows productivity or profits is a great alternate to raises. He recommended keeping a timesheet to see who worked how many hours on each job, and award each employee correspondingly. This way you can show your employees that what they do is important to you, which can go a long way in maintaining and even increasing your productivity and ultimately your profitability. No matter what stage of business you are in, there are always ways to increase your profitability. These are just a few tips to get you started. By keeping these tips in mind for future estimating and pricing jobs, you’re already on your way to increasing your profitability. The next step is up to you. s
Make sure you’re charging enough. According to Mike Graham, a remodelor from Mercer County and member of PBA, a 50 percent markup is the minimum for the remodeling industry.
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I Keystone Builder • November/December 2007
Member spotlight
Perry L. Cisney Custom Builders Builder finds niche in active adult market by Jennifer McDermitt f there’s one thing Perry Cisney of Perry L. Cisney Custom Builders has always been able to trust, it’s his instincts. Cisney’s instincts have told him when it’s time to start a business endeavor — and when it’s time to move on. Cisney has also been able to trust his instincts to identify which markets are hot — and which are not — which is why he has been so successful with his newest development, Laurel Vistas. Laurel Vistas is a 55+ active-adult community featuring 170 quality-built and designed single-family homes located in York County. “With the growing baby boomers demographic, the active adult market is a hot market to get into,” said Cisney. “It is not without its challenges, however. On one hand, this generation is more financially secure. However, they don’t necessarily need a new home, so you need to sell them more than that. We sell them not only a home, but also a lifestyle.”
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Building a career one business at a time Cisney began his career in the building industry in 1969, when he entered Williamson Trade School in Media after high school graduation. Cisney studied carpentry for two years. After graduation, Cisney spent a year as a framing foreman for a custom homebuilder and in 1972 joined his oldest brother in the family remodeling business, Cisney and O’Donnell. Cisney served as vice president in the family business for 20 years. In 1992, Cisney sold his interest in the family remodeling business and moved to Lancaster County, where he co-founded a custom homebuilding company that became one of the largest homebuilding companies in York and Lancaster counties. Cisney served as construction manager, director of operations and director of construction services while at this company. However, after eight years with this company, he found he no longer had the desire to continue in the fastpaced, high-volume, production homebuilding business. His instincts told him it was time to resign and fulfill his lifelong dream of owning his own custom homebuilding company.
Creating an ‘easy living’ lifestyle When Cisney talks about selling his customers more than just a “house,” he isn’t kidding. The homes in Laurel Vistas, incorporate universal and “Easy Living” design and visitability features, giving customers the ability to age in place in their dream homes. Some of the features include stepless entries, main floor living, wider halls and doorways, lever handled door hardware, floor-level bathtubs, raised appliances and more. Laurel Vistas homeowners can also enjoy the “easy living” lifestyle because their homes are maintenance free, and the community offers a clubhouse with a whirlpool spa, fitness center, indoor heated pool and recreation area. For the fans of the outdoors, the community’s prop-
erty features several picturesque walking trails. Cisney says it’s all about knowing the customer and giving them what they may not even know they want. “Today’s active adult is a lot different than past generations,” he said. “They are educated consumers who want it all, and thanks to today’s technology, we can give it to them.” Others in the industry are taking notice of Cisney’s innovative design. In late September, Perry L. Cisney Custom Builders swept the York County Builders Association awards winning “Grand Award,” “Best of Division,” “Best Decorated,” “Best Interior,” “Best Kitchen,” and “Best Bath” for their Laurel Vistas model, the Dogwood. The award-winning Dogwood model was featured in the 13th annual Parade of Homes sponsored by the York County Builders Association.
Giving back to the industry Cisney believes that after 36 successful years in this industry, he should give something back to ensure its future success. This is why he is so involved with his local association, the York County Builders Association, and the state association. Cisney is currently the secretary/treasurer of the York County BA, a PBA director and a NAHB director. In the past, Cisney served on the BIA of Lancaster County board of directors for four years and has also chaired the education and membership committees. Cisney’s association involvement also extends to the educational realm, as he has taught remodelers courses around the state, covering sales and marketing and design/build. Cisney was the first remodeler in Huntingdon County to receive the Certified Graduate Remodeler Award from the NAHB and one of only 19 statewide to receive such designation in 1991. In addition, Cisney was chosen as one of the professional judges for York County Builders Association’s first-ever Remodeling Awards of Excellence in 1991. Cisney says his association involvement is all part of his business plan. He said, “Maintaining a high level of ethics with my customers along with my association involvement are what I believe have been the key to my success through three decades and three companies.” s November/December 2007 • Keystone Builder
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Is your W business prepared
Courtesy of ARAcontent hen it comes to disaster readiness, can you ever be too prepared? According the Association of Small Business Development Centers, the effects of a disaster can be quite profound: More than one in four businesses will experience a significant crisis in a given year, and of those businesses that experience a disaster and have no emergency plan, 43 percent never reopen. Is your small business vulnerable? A new national survey of 2,500 small businesses conducted by TNS NFO for Office Depot found: • Three-quarters (71 percent) of small business owners do not have a disaster preparedness plan. • While 52 percent claim to burn important files on a removable media device in order to keep data secure, only 11 percent keep copies at an off-site location. “Not having a plan or back-up system in place can result in a More than one in business closing for good,” says Tom Serio, director, global busifour businesses will ness continuity management for experience a significant Office Depot. “Just as you would crisis in a given year, and prepare your home and family for a potential disaster, it’s of those businesses that important that you also ready experience a disaster your business. There are simple and have no emergency and affordable solutions that will help protect you, your employees plan, 43 percent and your business.” never reopen. Having weathered four major hurricanes in 2005 at the company’s corporate headquarters and its Gulf Coast store locations, Office Depot is using its real world experience to educate small businesses about disaster preparation. The company is offering a free brochure entitled “Expecting the Unexpected: Disaster Preparedness Strategies for Small Business,” which provides tips and product recommendations. According to Serio, the key to effective planning is to protect your most valuable assets: your people and your data. He recommends following these tips:
for a disaster? 24
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Keystone Builder • November/December 2007
• Build solid contact lists: Keep contact information for employees, local emergency services, and key vendor and supplier information updated and easily accessible. Establish a clear process for communicating with one another. • Back up data: Protect your business from faltering after a disaster by backing-up key data at least once a week. Copy data to removable media, including CD-R and DVD-R discs, or a portable USB drive. • Secure your data: Move back-up software to a secure off-site location. Store copies and documents you use in day-to-day operations in a secure and fire-proof location. Periodically review stored data to ensure that the correct data is being copied and that it can be restored. • Organize supplies: Make sure you have the right supplies to withstand any interruption. This includes having access to important business tools like a laptop computer and car charger as well as the basic office supplies needed to run your business. “You’ve worked hard to build your business. Don’t leave its future to chance,” adds Serio. s
Final word
View from PBA
Hey, do you have a license for that? by Stephen Black, PBA President f you’re getting a haircut, Pennsylvania has you covered. Likewise, when you need an auctioneer or a landscape architect, you’re protected. At least you’re safe if you think a state-issued license protects you. State legislators have proposed laws to license tanning salons, plumbers, private detectives, home inspectors and interior designers. Is there any protection? Consumer advocates regularly point out that home improvement contractors, like other construction jobs, are not licensed in our state. But does the public benefit when people get haircuts from a licensed barber? In construction, the faulty logic of licensing is obvious. If the state required home repairs conform to the Uniform Construction Code, consumers would benefit. It doesn’t. In contrast, licensing plumbers fails to set a standard for their work. Instead of wasting money with new licenses, the state government should evaluate how the public benefits from its current array of licenses. The Reason Foundation recently investigated the state policies for licensed jobs. The study shows arbitrary differences among states. Few agree on which jobs to regulate, and even fewer on how to regulate them. Pennsylvania residents appear to get along without licensing fortune tellers, beekeepers, chimney sweeps and florists. Other states function without spending so much time regulating cemeteries and campgrounds. Few people would argue against licensing medical professionals, for which the state issues 20 different licenses in fields such as midwifery, acupuncture and athletic training. The Pennsylvania Builders Association would simply like to know how the public benefits from existing and proposed occupational licenses. Let’s consider why we need regulators overseeing six types of auctioneer licenses before we send agents after the interior designer who ordered hideous colors of paint. s
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Builder wonders what carpenter used
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ob Spencer, the retired former owner of Spencer Remodeling, came across a few unusual items when remodeling a building in New Albany in 1969. The building was built between the mid to late 1800s and was used for selling dry goods. During the project, Spencer came across two novel levels inside a wall. Spencer is unsure of the use for the shorter level, but suspects that it may have been used for laying railroad track. The longer level was manufactured by Tallman Manufacturing and Oliver Manufacturing, both of Shelbyville, Ill., and has an adjustable post on the end with a thumb screw, allowing the user to set it from plumb to level. Other items discovered were clay marbles with stripes that had been hardened and an old bicycle catalog from about 1900. The catalog features pictures of bicycles and parts. Have you encountered something unusual while remodeling a home or excavating a building site? Contact Eric Wise at (800) 692-7339, ext. 3003, or by e-mail at ewise@pabuilders.org. s
Dancing, beauty contests and more! Local associations draw crowds with innovative ideas for meetings and fundraisers
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ocal associations developed fun ideas, from dancing to beauty pageants, and business programming to keep members active during 2007. Lawrence County Builders Association will host “Dancing with the Builder” for its annual Christmas party. Three teachers from Dance Implosion in New Castle will teach members line, ballroom and swing dance Dec. 14 at the St. Mary Mother of Hope Parish Center, New Castle. A beauty contest featuring nine builders dressed in drag drew 120 members to an Aug. 15 fundraiser for a builders association political action committee. The Home Builders Association Chester and Delaware Counties raised $5,000 through “Miss HBA” at the Edgmont Country Club. The Lehigh Valley Builders Association has focused its meetings on providing useful business information for its members, recognizing the economic climate is challenging for his members. At one recent meeting, Chuck Hamilton, executive officer, invited representatives from different green building programs to discuss issues with green building and how members may earn certification through each program. s 26
I Keystone Builder • November/December 2007
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