Summer 2011 by Annie Rubens

www.wisbuild.org

Summer 2011

d e t i b i h o r P s e g n a h C e d o C Expensive t p m e x E n o i t c u r t s n o C l a i t n Reside e g a W g n i l i a v From Pre d e t a n i m i l E e e Conversion F y t r e p o r P t n e Perman d e v o r p p A e z e Tax Fre

Delivered to you as a benefit of membership

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features

Summer 2011 Volume 28 • Issue 2

Best of Legal Hotline........................................................... 8 Robert Procter, Axley Brynelson, LLP, answers the most commonly asked questions by members who seek legal advice from the WBA Legal & Building Code Hotline.

Capitol Corner.................................................................... 10 Governor Scott Walker discusses how the budget protects middle class taxpayers and future generations.

One for the History Books................................................. 12 An overview of the last six months, which have seen more than their share of drama at the State Capitol in Madison.

departments President’s Perspective................................................................................. 3 Out-of-season election season upon us. Local Happenings.......................................................................................... 4 Photos and details of WBA local association events around the state. Member Matters............................................................................................ 6 WBA professional contracts are your member benefit. News & Events.............................................................................................. 15

12 Mission Statement

A professional trade association, WBA advances the housing industry for members and consumers through government involvement, education and promotion.

Wisconsin Badger Builder, (ISSN 004-232) is a bi-monthly publication of the Wisconsin shelter industry. It is the official publication of the Wisconsin Builders Association® (WBA) and is published by WBA, 4868 High Crossing Blvd., Madison, WI 53704. Periodicals postage paid at Madison, WI 53701 and additional mailing offices. All advertising is subject to acceptance by the Wisconsin Badger Builder editorial review committee. The publication of any advertisement is not to be construed as an endorsement of the product or service offered. The contents of all material available in this publication are copyrighted by WBA unless otherwise indicated. All rights are reserved by WBA, and content may not be reproduced, disseminated, published or transferred in any form or by any means except with the prior written permission of the Wisconsin Builders Association®. POSTMASTER: Send address changes to Wisconsin Badger Builder, 4868 High Crossing Blvd., Madison, WI 53704. SUBSCRIPTIONS: Subscriptions available through membership in the Wisconsin Builders Association®.

Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

Vision Statement

Affordable, innovative and environmentally conscious homes accessible to all.

Motto

“Dedicated to preserving and promoting the American Dream”

Out-of-Season Election Season Upon Us

2011-12 SENIOR OFFICERS President Don Esposito, Madison, (Madison Area BA) President-Elect Gary Roehrig, New Holstein, (Mid-Shores HBA) Treasurer Craig Rakowski, Wauwatosa, (Metropolitan BA) Secretary Brandon Bartow, Manitowoc, (Manitowoc County HBA) Immediate Past President Jim Kubasta, Oshkosh (Winnebago) Associate Vice President Monica Sommerfeldt Lewis, Chippewa Falls (Chippewa Valley) Associate Advisor to the Senior Officers Sean Kelly, East Troy (Mid-Shores HBA)

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ting

Area Vice-Presidents

Southeast Area Wolf Korndoerfer (Metropolitan) Darryl Spang (Racine-Kenosha) Northwest Area Clint Doege (Heart of the North) Monica Sommerfeldt Lewis (Chippewa Valley) Southwest Area Tony Szak (La Crosse Area) Brett Werner (La Crosse Area) Northeast Area Steve Atkins (Brown Co.) Scott Browne (Brown Co.) South Area Brian McKee (Madison Area) Bob Renforth (Madison Area) East Central Area Ed Schmidt (Valley) Stan Martenson (Valley) North Area Pam Jewell (Golden Sands) Mike Richie (Wausau Area) East Shore Area Brad TenPas (Sheboygan) Sean Kelly (Mid-Shores) State Representative to NAHB Ron Derrick (St. Croix Valley) Area 10 Chairman Wayne Foster

President’s by Don Esposito, by WBA President 2011 lection season is upon us! The candidates are gearing up for a final push towards the primaries and, ultimately, Election Day. Election ads are up and running on TV, radio and in the print media. The political pundits and news media are fully engaged, and barely a day goes by without election-related news reported on the local news stations. All that remains is for a Dane County Circuit Court judge to rule on the lawsuits filed on behalf of the candidates for the July and August elections to be held. What? Wait! Elections in July and August? A Dane County judge is still to rule on whether those elections will happen? But it is late June; we building professionals should be thinking about our prime building season and trying to squeeze in some vacation time, not elections! Well folks, like it or not, election season really is upon us. Wisconsin is about to hold recall elections for a historically unprecedented nine state senators. Republicans facing recall elections are Rob Cowles of Green Bay, Alberta Darling of River Hills, Sheila Harsdorf of River Falls, Randy Hopper of Fond du Lac, Dan Kapanke of La Crosse and Luther Olsen of Ripon. The targeted Democrats are Dave Hansen of Green Bay, Jim Holperin of Conover and Bob Wirch of Pleasant Prairie. The six Republican incumbents will be challenged first, with Democratic primaries on July 12 followed by general elections on Aug. 9. The three Democratic incumbents will face their challenges a week later with Republican primaries on July 19 and the general election on Aug. 16. Confused yet? Think how our Green Bay members probably feel with election days on four of six Tuesdays in July and August split between two different Senate districts! Oh, and what about that Dane County Circuit Court ruling where initial briefs are due on June 29 with final arguments on July 7. Not to worry; Judge Richard Niess has

perspective I urge all members residing in the recall districts to

GET OUT AND VOTE. already stated he anticipates ruling based on those submissions without any oral arguments or additional testimony and “the electorate should proceed on the basis that the elections will go forward”. Hmmmmm … sounds like the case has already been decided. What is at stake? Nothing more than control of the Wisconsin State Senate. If the Democrats successfully pick up three net seats, they will gain majority control in the Senate and effectively stalemate proposals from Gov. Walker and/or the Republican controlled Assembly. These recall elections are extremely politically charged, and true believers from both parties already have boots on the ground in all nine recall districts. Conventional wisdom says these nine elections will be decided more by those who show up to vote than the traditional political makeup of the districts. So, with that, I urge all members residing in the recall districts to GET OUT AND VOTE. So rearrange that vacation, make sure you are around for the recall voting days and let your voices be heard. For members not in a recall district; I urge you to vote early and often with your time, your talent and with your contributions. The friends of our industry need our help and our votes. Do not let them down. We need to keep our industry and our association moving forward together — united as one. X

Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

Local Happenings WBA Staff 4868 High Crossing Blvd., Madison, WI 53704 • (608) 242-5151 Executive Vice President Jerry Deschane, CAE, ext. 11 jdeschane@wisbuild.org Director of Political & Government Affairs Brad Boycks, ext. 16 bboycks@wisbuild.org Director of Communications Annie Rubens, ext. 19 arubens@wisbuild.org

South Central WI BA Members working Pub Crawl raised more than $3,600 for Project 16:49 for homeless teens in Rock County.

Valley HBA VHBA’s Political Action FUNdraising Night welcomed 118 members and guests to VHBA member Ridgeway Country Club.

Director of Accounting Services Kathy Johnsen, ext. 12 kjohnsen@wisbuild.org Accounting & Political Affairs Assistant Mark Nelson, ext. 25 mnelson@wisbuild.org Event Coordinator Kimberly Fay, ext. 10 kfay@wisbuild.org

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Mid Shores HBA Congressman Tom Petri visited Mid-Shores HBA member Kiel Building Supply (KBS) on June 29 to congratulate them for receiving two major business awards both nationally and regionally.

WBA Insurance Services

Brown Co. HBA Mayor Schmitt thanks BCHBA for their candidate endorsement.

Chief Operating Officer Megan Taylor ext. 24 mtaylor@wisbuild.org

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Published by

Publisher............................ Kevin Naughton Supervising Editor............ Jennifer McDermitt Graphic Designer...................... Jason Gabel

Marsha Suwienski

(800) 935-1592, ext. 106 • marshas@wildblue.net

Publication Sales Manager........ Brenda Poe (800) 935-1592, ext. 115 • bpoe@printcomm.com

LaCrosse Area BA La Crosse Area Builders Association members enjoying the annual picnic. Sun, rain, fun, sun, rain, fun!

Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

THERE’S GOOD ENOUGH. AND THEN THERE’S MARVIN ®. advanced Window & Door solutions 2929 Hubertus Rd. Hubertus 1-800-686-7267 AWADS.biz

How good is good enough? Let’s see … how often does your customer plan to replace their windows? Helping homeowners understand the value of quality windows and doors isn’t always easy. We’d like to give you the tools to help. Ten things set Marvin apart from other windows and doors. Our commitment to sustainability, industry-leading energy-efficient solutions and engineering for performance that lasts are just a few. To see all 10 reasons why Marvin windows and doors are an exceptional value, visit marvin.com/10. For more information and to discuss solutions for your next project, contact your local Marvin dealer today.

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Hellenbrand Glass, llc 211 Moravian Valley Rd. Waunakee 608-849-8675 HellenbrandGlass.com

arrow building center 500 E Park Chippewa Falls 715-723-4716 ABC-CLC.com

lake Geneva Window & Door 202 N. Elkhorn Rd. Williams Bay 262-245-5597 LakeGenevaWindowAndDoor.com

bay lakes manufacturing co., inc. 2736 Hillsdale Ct. Green Bay 920-434-0881 1-800-236-9595

lisbon storm screen & Door 5006 W Lisbon Ave. Milwaukee 414-445-8899 LisbonStorm.com

bliffert lumber & Fuel co. Milwaukee – Southside 414-383-4900 Milwaukee – Eastside 414-264-5700 Waukesha 262-542-6666 BliffertLumber.com

stans lumber 202 E Main St. Twin Lakes 262-877-2181

Dunn lumber & true Value Hardware 826 North St. Lake Geneva 262-248-4459 DunnLBR.com Fond du lac Distributors, inc. 1160 W Scott St. Fond du Lac 920-921-1600 FDLDistributors.com H&H lumber, inc. 1302 Oakes Ave. Superior 715-392-2238

Vans lumber & custom builders, inc. E176 Cty. Rd. S Dyckesville 920-866-2351 VansLumber.com Window & Door central 1120 N Perkins St. Appleton 920-739-9080 WindowAndDoorCentral.com Zuern building Products Allenton – 262-629-5551 Cedarburg – 262-375-9400 Watertown – 920-261-5676 Zuerns.com

Membership Matters

WBA Professional Contracts Are Your Member Benefit

our business is just a download away from taking a huge professional leap forward by utilizing a professional contract. With price structure options and key support forms, the WBA Home Construction, Home Improvement and Home Remodeling Contracts are one of many ways WBA is working to support the business needs of our members. WBA achieved a number of goals with the new contracts, including: 1 (and foremost) Available to members for no charge! 2 Increased professionalism in the residential building industry 3 Creating user friendly documents 4 Fair and reasonable risk allocation 5 Setting fair and reasonable default standards for its members and within the industry 6 Short form option for simple remodeling projects It is WBA’s goal to have its members use these contracts as their standard form. This will not only serve to raise the level of professionalism from members providing building services, but also increasingly gain momentum with the public at large so they will be as comfortable using it as the standard WB-11 Residential Offer to Purchase is used in residential real estate purchases. “This contract and a number of other forms we have planned will help set industry standards that govern the relationship between builders and owners,” said attorney Robert Procter from Axley Brynelson. Procter and other attorneys with collectively over 100 years of experience scrutinized the contract throughout its entire development. Content was formulated directly from the input of builders and members of the WBA Local Officers Council. Hiring even half of this legal expertise to develop your own contract would easily cost over $2,500! Do the math and you can quickly see one use gives an outstanding return on your investment in membership.

User Friendly The contracts are very user-friendly downloadable PDFs with interactive fields, so a user will be able to type in the information in specific fields. Each section is distinct and self contained so that an addendum or revision to a specific section will not cause inconsistencies throughout the document. Members simply need to log into the members side of www.wisbuild.org, go to “Contracts & forms” and choose “Construction or Remodeling” to get a link.

Three versions Three versions of the contracts are available, a Lump Sum Contract, Time & Materials or a short form. With the Lump Sum contract, the owner agrees to pay the builder a lump sum price for the completion of work subject to any defined allowances. Allowances are generally only estimates that can change the Contract Price. In the Time & Materials version, the owner agrees to pay the builder the actual costs incurred in materials and labor to complete the work plus an additional defined percentage fee of the cost of the work. There is also a new “short form” contract for less complicated Home Improvement projects.

Fair and Reasonable Risk Allocation The contracts attempt to allocate the contractual risks to whichever party has the specific knowledge or skill to address 6

Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

the risk and who is in the best position to bear the risk. For example, the builder is responsible for notifying the owner of all required permits necessary to do the work, but the owner is responsible for any delays and additional costs incurred as a result of differing site conditions.

Fair and Reasonable Default Standards This provision attempts to set a standard that is more objective than having experts opine as to what the industry standard requires. It utilizes the Construction Industry Quality Standards of the Wisconsin Builders Association to define the term “construction defect.” Furthermore, the contract provides for the schedule of payments unless a separate escrow agreement exists. This section requires that the builder only provide partial lien waivers and that the lien waivers are “null and void if payment in good funds is not received within three days.” Most form lien waivers are not conditioned on the receipt of good funds, and are acknowledgements that the builder has received the funds and waived its rights. These types of lien waivers will generally waive the lien rights even if they turn out not to be accurate (i.e., if the funds were not actually received, etc.).

Change Orders The Home Construction contract requires change orders; however, it does not require that the change orders be in writing. This provision recognizes the fact that oral change orders are a way of life in residential building.

Warranty & Right to Cure The Warranty provision is intended to be the exclusive remedy for alleged Construction Defects. The contracts also incorporate Wisconsin’s Right to Cure Law as a part of its dispute resolution method.

Insurance The need for insurance and the type of insurance is one of the most important and neglected issues included in residential Continued on page 11

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Hiring Minors for Summer Work

Best of the Legal Hotline

by Robert Procter, Axley Brynelson, LLP

A: There are two main sources of law that address minors that are hired for summer help: (1) The Wisconsin Department of Workforce Development; and (2) the U.S. Department of Labor. There are specific requirements relating to the hours a minor may work and specific regulations as to the type of work (for example, prohibitions as to hazardous work) that they may do. If you hire a minor, you are required to post the state-approved poster regarding the hours that a minor may work. Information about the poster and the poster may be obtained at the following website: http://dwd.wisconsin.gov/dwd/posters.htm The poster provides information on what hours a minor may work in Wisconsin. Hours and days of the week minors may work: http://dwd.wisconsin.gov/ dwd/publications/erd/pdf/erd_9212_p.pdf In Wisconsin, employers must have a work permit on file for the minor being employed before they may allow the minor to begin work. To obtain information about obtaining a work permit for a minor worker, you can call (608) 266-6860. It is the responsibility of the work permit officer to check to see that the job for which the minor is being hired is one that the minor is legally allowed to do. The permit will not be issued if the work is prohibited by law for the minor. The best way to ensure that you do not hire a minor to do prohibited work is to accurately and completely inform the work permit officer of the scope of duties the minor will have, and to ensure that the minor stays within that scope of duties. Some of the prohibitions that affect minors in the construction industry include a prohibition against work that involves a potential exposure to asbestos, certain excavating work, assisting in the operation of cranes, hoists, and high-lift trucks, operating, assisting, repair, oiling, etc., of circular or band saws, corner cutters, mitering machine, etc. The prohibitions against hazardous work are very broad and can lead to significant liabilities. You should make sure you work closely with the work permit officer to ensure that any duties that a minor may have do not violate the prohibitions. You can review information about Wisconsin employment laws for

Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

minors at the Wisconsin Department of Workforce Development: http://dwd. wisconsin.gov/er/labor_standards_ bureau/child_labor_laws.htm You can review information about the Federal Government’s employment laws for minors at the U.S. Department of Labor’s website: http://www.youthrules. dol.gov/jobs.htm

Is a Builder Liable for Construction Defects to a Homeowner Who Is Not the Original Owner? A: There are a number of assumptions that we will make to answer this question. First, we will assume that the general contractor is not also the developer. Second, we will assume that the general contractor did not provide a warranty to the third party that purchased the unit from the developer. Third, we will assume that the developer did not legally assign any warranty that the builder gave to the developer to the homeowner. We will use the following fact pattern to generalize our answer. Assume that a developer hires a builder to build a ten-unit condominium building. The developer is a limited liability company that accepts the completed building from the builder with a one-year standard warranty. The developer then sells the completed condominium units to individual buyers using a standard form offer to purchase. There is no contract between the builder and the condominium unit buyers. After the developer finishes selling the units, the developer dissolves his or her limited liability company. A number of years pass, and there is an alleged construction defect. The developer is no longer a viable entity, and the condominium unit owners cannot look to the developer to repair the alleged defect. However, the builder is still a viable entity, so the unit owners (or the association) pursue a claim against the builder. There are significant obstacles to the condominium unit owner (or the association) making such a claim against the builder. First, there is not a contract between the builder and the individual unit owner, so the unit owner cannot claim that the builder breached the terms of the contract or the terms of the warranty. Second, without a valid contract claim, the unit owner would need to make either a negligence or

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strict liability claim against the builder; however, the Economic Loss Doctrine precludes a purchaser of a condominium unit from employing negligence or strict liability theories to recover from the builder loss, which is solely economic (i.e., money damages). The reason for the Economic Loss Doctrine is that the purchaser has the power to allocate the risk of economic loss as part of his or her contract to purchase the unit. Thus, the courts are reluctant to allow persons that purchase products via contract other legal avenues to pursue claims outside of the terms of the contracts. In other words, the courts have said that if you enter into a contract to purchase a product such as a house, then you need to look to the contract itself when alleging a claim for damages. In this case, the unit owner’s (or the association’s) most valid claim is a contract claim against the developer. This is not to say that some creative claims could not be made against a builder based on the specific facts of a situation; however, there would be significant hurdles for the homeowner to overcome to make the customary claims against the builder.

Challenging the Denial of a Building Permit

A: You have asked the WBA Legal Hotline whether a code officer may deny a building permit to construct a full kitchen in the basement of a singlefamily residence because the code officer is of the opinion that adding the second kitchen would turn the single-family residence into a duplex, which is prohibited in the applicable zoning district. The answer to this question generally turns on the language of the zoning ordinance — in this case, the definition of a “single-family residence” as compared to a “duplex.” Using the City of Appleton ordinances as an example, a single-family dwelling is defined as “a residential building containing one dwelling unit.” A two-family dwelling (i.e., a “duplex”) is defined as “a residential building containing two dwelling units.” A dwelling unit is defined as “a residential building or portion thereof intended for occupancy by one family … “ (emphasis added). Under the above definition, intent becomes an important part of the code

officer’s determination. Specifically, the dwelling unit must be intended for occupancy by more than one family to constitute a duplex. As a practical matter, the applicant would have to demonstrate how the remodeled house is not intended for use by two families. In practice, this is done by demonstrating that the current design of the house prevents its use as a two-family dwelling, taking steps in the design or construction of the home improvement that would discourage its use as a two-family dwelling (i.e., ensuring there are not separate doors and stairwells that allow for private use of one section of the house) or by entering into an agreement with the municipality whereby the homeowner agrees to restrict the prohibited use. Once the applicant demonstrates the house will not or cannot be used for the prohibited use, the code officer must issue the permit, provided all requirements of the applicable ordinances have been met. If the code officer does not issue the permit despite the applicant meeting all of the ordinance requirements, the next step in the process would be to get the basis for the denial in writing and timely appeal that decision to the board of appeals (if the decision is by a municipality with zoning powers) or the board of adjustment (if the decision is by a county). CAUTION: There are strict timelines that must be followed in making such an appeal, and you should immediately seek legal advice and review the applicable ordinances. It is important to take this step to preserve any potential appeal rights to the court. If the board of appeals or board of adjustment rules against the applicant, the next step is to file a certiorari appeal with the circuit court. There is a strict deadline from the date the board of appeals or the board of adjustment files its decision to appeal that decision to the circuit court. If the appeal is not filed within that time period, the circuit court will not hear the matter, and the decision of the board of appeals or board of adjustment will be final. Finally, it is our experience that trying to work with the municipal officials is often more effective than going through an appeal process. Generally, the applicant must identify the concerns of the code officer and to address those concerns. This has the benefit of not taking up a significant amount of time and expense in the appeals process.

The Wisconsin Builders Association Legal & Building Code Hotline is a service provided for WBA by the law firm of Axley Brynelson, LLP. Legal Hotline answers should be considered a general statement of applicable legal information. Given this format, it is impossible to fully address all potential legal issues that might apply in any particular situation. A determination of any individual’s legal rights in a transaction can only be obtained after a complete analysis of the law and its applicability to the particular fact situation. Please contact the WBA Legal Hotline if additional information is needed, or private counsel, if legal advice is needed. X

Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

Budget Protects Middle Class Taxpayers, Future Generations Capitol

corner

by Governor Scott Walker oing into 2011, Wisconsin faced serious challenges that threatened to rob future generations of growing up in a state greater than the Wisconsin in which you and I grew up. While we are beginning to show signs of economic recovery, the state’s fiscal situation suffered from years of poor choices and faulty budget practices. No one party is to blame. Republicans and Democrats alike have caused the problem. Unfortunately for all of us, honest budgeting was one area where both political parties agreed to look the other way and rely on one time money, fund raids, and budgeting tricks and gimmicks. This reckless budgeting was exposed by a failing national economy and caused troubled times in state government that require tough decisions. Together, we were presented with a choice. We could take the easy road and pass on the crushing burden of debt to our children and grandchildren, or we could confront the problem now so that future generations won’t have to face the problems of today. As the father of two teenage sons, the answer was simple. Our budget is the first step toward putting Wisconsin back on solid ground and off of the mountain of debt that could have easily plagued future generations. We balanced the state’s $3.6 billion deficit without raising your taxes, without the massive layoffs or furloughs that other states are facing, and while protecting the core services that we rely on. When you look at state spending as a whole, you’ll also see that our top priority remains public education. Public K-12 schools are the largest expenditure in the budget. My two sons go to public schools, so I know first-hand how important our schools and our teachers are to shaping the next generation of Wisconsin leaders. Our schools are also benefiting from the reforms we’ve proposed. For example, the Kaukauna School District says our reforms allow it to hire more teachers and to lower class sizes. The district’s operating budget has now gone from a deficit of $400,000 to a $1.5 million surplus. Other school systems that are taking advantage of our reforms can see similar results. Our budget also supports critical services like BadgerCare, Medical Assistance and SeniorCare. Over the next two years, nearly all new revenue that the state receives will go to the Department of Health Services to ensure that families who rely on these programs will continue to receive the medical care they need. Supporting critical service includes fully funding programs like the state’s Well Woman Program. The Well Woman Program

Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

provides cancer screenings for low income women. In the last year alone, nearly 9,000 women benefited from these life-saving screenings. Because we made the tough choices, this critical service will continue. In a victory for property taxpayers from Superior to Kenosha, this budget also freezes your property taxes. The average property taxpayer will save $700. As my youngest son, Alex, would say “that’s real money.” It makes me think about the 60-year-old school custodian who wrote to me in January about his property taxes. He noted they went up $500 last year. When he retires he said, “My property tax bill will be my highest expense next to health insurance. I will have to find a part-time job just to live normally.” It’s my hope that due to this budget, thousands of Wisconsinites like that custodian can breathe just a little bit easier and not worry about how they’re going to stay in the home they love. I hope that when he finally gets to retire, he won’t need a second job to pay his taxes. During my job interview to be your next governor, I overwhelmingly heard one consistent message from people all across this state: we need to get Wisconsin back to work. Following my call for a special session on jobs on day 1, the legislature in a bi-partisan manner passed, and I signed, the most aggressive legislation focused on job creation in the country. As a result, we enacted significant tort reform measures to provide a fair and competitive legal climate for employers and manufacturers, lowered healthcare costs for small businesses and employees, reduced taxes for job creators, and created the framework for the new Wisconsin Economic Development Corporation, focused completely on economic development. We have already made a positive difference on the road to creating 250,000 jobs by 2015. During the first five months of this year, Wisconsin has added some 26,400 new private-sector jobs. Of those, 13,100 were in manufacturing. In May, Chief Executive Magazine conducted its annual survey of CEOs across the country on the best states in which to do business. In the largest jump in the survey’s history, Wisconsin climbed 17 spots from being ranked 41 in 2010 to 24 in 2011. Wisconsin is heading in the right direction to get back to work and back to building. Getting Wisconsin back to building is vital to getting our state’s economy back on track. That is why there are a number of provisions included in the budget designed to grow our state’s building industry and to help our state’s builders. Our budget aggressively addresses these issues, such as the working lands initiative that repealed the conversion fee for rezoning from farmland preservation zoning districts; changes to prevailing wage law to eliminate prevailing wage requirements on residential subdivisions, private construction projects, funded by public dollars, and donated labor in the construction or repair of

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municipal projects; the ban on code legislation that increases the cost of housing by $1,000; and the inclusion of a permanent cap on property taxes. Unfortunately, we are not out of the woods yet. The national recovery has been slower than we’d like, which is why it’s so important that we lead the nation in implementing an agenda focused on job creation. Wisconsin will help lead the rest of the country on the road to recovery, because our national renewal won’t happen without robust job creation initiatives coming from the states. Our budget chooses to fix our problems now, so that our children and our grandchildren don’t face the same challenges we face today. I want them to grow up in a Wisconsin even better than the Wisconsin I grew up in — that’s what this budget sets out to do. X Capitol Corner is a regular feature for Badger Builder. In this space, a Wisconsin legislator will provide perspective on an issue. Each guest columnist is offered the opportunity to select their primary issue of concern and present their views independent from any guidelines imposed by the Wisconsin Builders Association®. The views expressed by the columnist are solely their opinion and do not necessarily reflect the views of the WBA, NAHB, the locals, or the members. The Badger Builder editorial department welcomes reader feedback to the issues featured in this section in the spirit of promoting continued discussion on the important issues affecting our daily lives. To submit comments, please send them to Badger Builder Editor Annie Rubens, arubens@ wisbuild.org. Only comments in writing will be considered for reprint.

membership matters

Continued from page 6 construction contracts. Section 15 and attachments attempt to provide guidance as to the proper insurance, and to encourage both builder and owner to seek professional guidance.

Remodeling Needs Addressed The Home Remodeling & Home Improvement contracts are compliant with DATCP 110, have a defensible penalty for breach by owner and include specific sections for Wisconsin Right to Cure and Lien laws. “We are very excited about the release of these contracts as a benefit to our members. It is our goal to provide our members with the essential tools to succeed in their business,” said Jerry Deschane, CAE, executive vice president of WBA. Go to www.wisbuild.org now to download the contracts you need and incorporate it into your next project. Laying a solid contractual foundation for both you and your customer will benefit all involved. X

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Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

One for the History Books

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G g sa A tu Administrative Rule Reform signed into law in June.

Gov. Scott Walker at February Board Day.

Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

he last six months have seen more than their share of drama at the State Capitol in Madison. Protestors by the tens of thousands and police officers by the hundreds occupied the Capitol and attention of the media from January into this summer. Newly-elected Governor Scott Walker and new Republican majorities in both houses of the Legislature attacked the power of public employee unions, stripping away union privileges that had been accepted as a given since the 1970s in Wisconsin bureaucracies, schools and local governments. It was a recipe for gridlock, and no one would be surprised to learn that the rest of the business of government had come to a grinding halt. Except that it didn’t. “While all that noise was going on, things still got done. We had, undoubtedly, one of the most productive legislative sessions in the 63-year history of the Wisconsin Builders Association,” reported WBA Chief Lobbyist Brad Boycks. “Members will be stunned when they see everything that they accomplished so far.” Boycks points to a white board propped up against the couch in his office. There are two lists on that board: one lists things that WBA members wanted to accomplish in the 201112 budget, and the other lists things that WBA wants to get done before the end of the session next Spring. With one small exception, everything on the budget list has been checked off as completed. Most of the items on the “rest of session” list have been drafted or initial meetings have been held. “We have accomplished a great deal in a short amount of time to start this legislative session,” said WBA Government Affairs Chair Chad Wuebben. “WBA members started planning our

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legislative agenda back in June of 2010, and I think few at the table that day would have believed we would be able to accomplish this much this quickly.”

A Law Prohibiting Expensive Code Changes It will be much more difficult for the state to impose costly building code changes on home buyers, thanks to two precedentbreaking changes in the way state administrative rules are written. First, the governor’s budget bill includes language that prohibits the state from adopting any change or package of changes that would add more than $1,000 to the cost of a home. Such a change would have to be adopted by the state legislature — a much more complicated process than simply adopting a rule. Second, the Legislature passed a law requiring any new or revised rules to have the specific approval of the governor before they can be adopted. In the past, agencies like the DNR and Department of Commerce have been relatively free to adopt new rules, as long as those rules were signed off by the secretary of the agency. Under new legislation, those rules would have to also be reviewed and approved by the governor. When proposing the change at the beginning of the year, Governor Walker pointed out that the governor is accountable for the actions of his agencies. “The people elect the governor; not the bureaucracy,” said Governor Scott Walker. “Elected state officials from the governor on down are the ones who should have the final say in whether something becomes effectively law or not.” Administrative rules, although not acted on by the full legislature, have the same force and effect as laws.

No More Penalty for Creating New Homes The legislature eliminated an onerous and aggravating “conversion fee” for converting farmland into another use. The conversion fee was imposed on landowners during the last legislative session as a means to pay for a new program allowing the state to buy development rights on farmland. The fee ranged in price from a minimum of $680 per acre on up. Farmers and developers alike opposed the fee, seeing it as little more than a money grab. “The conversion fee was an added tax being forced on willing buyers and willing sellers by a third party who wanted the money for a pet project,” said freshman legislator André Jacque (R-Bellevue). Jacque and veteran state Senator Dale Schultz (R-Richland Center) introduced separate legislation to kill the fee, in case it was not eliminated in the budget. “Wisconsin should treat its landowners more fairly than that.”

Prevailing Wage Provision Killed The budget also wipes out a requirement that residential developers would have to pay “prevailing wages,” (code for “union wages”) to workers who install the streets, sewer systems and other infrastructure supporting a new subdivision. In a late-night amendment added to the budget bill over Memorial Day weekend in 2009, developers would have been required to impose the added labor and record-keeping costs on all contractors involved in work that would become city property. This change upended decades of business practices for both developers and municipal governments, and both were outraged. “We heard loud and clear from local governments that they opposed that change made by the previous legislature,” said the

state representative co-chair of the budget-writing Joint Finance committee, Robin Vos (R-Rochester). “Forcing higher costs and more red tape on businesses during one of the worst real estate recessions in history made no sense at all, and I’m glad we were able to clear that up quickly.” Continued on page 14

State Assembly member Michelle Litjens (R-Oshkosh) joined the WBA GA committee in April.

More Than She Expected When WBA member Michelle Litjens (R-Oshkosh) threw her hat into the political ring last year, her focus was on getting the state’s financial house in order. “A high school economics student could have told you what the problem was,” said Litjens. “Our government had been spending more than it was earning for a decade, and government was broke. My priority was to get involved and change that.” Litjens was one of more than two dozen new legislators elected in November of 2010 on a similar platform. They came to Madison from successful private sector careers. And they were focused. “I was not and am not concerned about re-election,” she told us. “I don’t see myself as a career politician. This is about the future of our state and what kind of future we are leaving to our children.” Michelle Litjens and her husband develop and own rental property in the Fox Valley. They are members of the Winnebago Home Builders Association. She describes her first few weeks in office as, “interesting, frustrating, and fascinating.” And then, Governor Walker introduced his budget adjustment bill and everything changed. “The atmosphere in the State Capitol became incendiary,” said Michelle. “Being led by police escort through mobs of protestors to your office, to committee rooms or to the floor of the Assembly was a frightening experience. It’s one thing to read about history being made; it’s another thing to live through it — through the middle of it.” The anger of the mob was reflected in some of her colleagues, including shouts of “shame, shame, shame” after the late night passage of the budget repair bill. But Litjens has no regrets. “Change is hard,” recalls Litjens, “and we are making big changes to the power structure of Wisconsin government. I’m very proud of that, and I believe it was worth it.” Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

one for the history books

Continued from page 13

Tort Reform, Property Tax Limits, Deregulation of Elevators and Thermal Insulation Contractors, Oh My The list of improvements made to Wisconsin’s building climate stretches on. In January, the legislature restored limits on lawsuits, retreating from the “Alabama North,” label that the Wall Street Journal gave the state in 2005 when a prior legislature opened up the doors for lawsuits on everything from manufactured products to old paint. As part of the first balanced state budget in a decade, the governor and legislature adopted a cap on local property taxes. Local taxes may not increase at all for the foreseeable future after a partial veto by Governor Walker from language contained in the budget passed by the legislature. Joint finance co-chair Alberta Darling (R-River Hills) said the limits are needed to protect taxpayers and to send the message that fiscal discipline is the rule. “In these tough times, families need certainty,” said Darling. “Today, we stood up for the property taxpayers by saying ‘no’ to out-of-control taxing and spending.” The events that dominated the media’s attention in Wisconsin’s Capitol this year will make their way into history books. Wisconsin, as it has done several times before, has set itself at the leading edge of historic changes in government. The changes detailed above will probably not see that same sort of attention. But when it comes to the lives and businesses of Wisconsin’s housing providers, that is just fine. “We don’t need headlines,” said WBA President Don Esposito of Veridian Homes of Madison, “we just need government to stay out of the way.” X

C Commerce Secretary and head of the newly created Wisconsin Economic Development Corporation (WEDC) Paul Jadin speak to the Executive Committee in June.

M Robin Vos, co-chair of Joint Committee on Finance, came to the March Executive Committee meeting.

Left: DNR Secretary Cathy Stepp and Deputy Secretary Matt Moroney at February Board Day.

What Got Done Some of the key items for housing approved by the Wisconsin Legislature so far include: • Regulatory reform. Limits on building code changes and other administrative rules • Tort reform. Limits on lawsuits, including caps on punitive damages and standard rules for screening evidence. • Eliminated farmland conversion fee. • Permanent freeze on property taxes. • Elimination of prevailing wage on residential developments • A truly balanced budget. Wisconsin’s state budget has not been legitimately balanced in nearly a decade, often forcing budget problems into the next budget cycle and putting pressure on building permit and other fees. • Restoring commercial construction erosion control authority with the Division of Safety and Buildings • Elimination of burdensome regulations on residential elevator installers and HVAC contractors who install “thermal insulation.” 14

Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

Loc al Associa tion Brown County

Parade of Homes/Home Shows

Golf Outin g/BBW

Ot her Event s

Continuing Ed offered during some GMM’s

Central Wisconsin Chippewa Valley

Aug. 27-28, 2011 Remodelers Showcase of Homes * Feb. 24-26, 2012 Home & Garden Show * June 9-17, 2012 Parade of Homes

Door County HBA of Fond du Lac & Dodge Counties

BBW: Oct. 11, 2011 PAC auction and installation, Eau Claire Golf & Country Club

Aug. 9, 2011 Summer Picnic, Phoenix Park* Dec. 13, 2011 Holiday Party

Sept. 8, 2011 Golf outing & PAC auction

Dec. 8, 2011 Installation Aug 17, 2011 Family Picnic * Sept. 21, 2011 Installation

Sept. 30 - Oct. 8, 2011 Parade of Homes

Golden Sands

Sept 17-18, 24-25, 2011 Parade of Homes

see calendar at www.homebuildersfdldodge.com

www.headwatersbuilders.com Nov. 13, 2011 Installation

La Crosse Area Lakeland

See calendar at www.cvhomebuilders.com

Sept. 20, 2011 Installation August 26, 2011, Wildwood GC, Minocqua

Headwaters Heart of the North

Educ ation ABCs at the HBA 3rd Tues of month. Continuing Ed offered monthly at BCHBA

Sept. 17-18 & 22-25, 2011 Fall Showcase of New Homes * Jan. 19-22, 2012 Home Expo* Jan. 28-29, 2012 Tour of Remodeled Homes

Continuing Ed offered during some GMM’s

Sept. 20, 2011 Fall Fling & Installation July 30 & 31 and Aug 6 & 7, 2011 Parade of Homes

See calendar at www.lakelandba. com

Madison Area

See calendar at www.maba.org

Manitowoc County Commerce Approved 12-Hour Course DVD available. $130 for HBA members, $225 for non-members at www.MBAonline.org.

Metropolitan

Aug. 20-Sept. 11, 2011 Parade of Homes *Oct. 8-9, 2011 Fall Remodelers Tour *Jan. 5-8, 2012 Home Building & Remodeling Expo

Mid-Shores

Oct. 7-9, 2011 Parade of Homes

BBW: Dec. 2, 2011 Live auction, Millhome Supper Club, Kiel

Mid-Wisconsin

Feb. 17-19, 2012 Home Show, Glacier Canyon Convention Center at the Wilderness

Sept. 2011

Northland Area

March, 2012 Home Expo, Spooner

Racine-Kenosha

Sept. 10-11, 17-18, 24-25, 2011 Parade of Homes

Sheboygan County

Sept. 9-11, 16-18, 2011 Parade of Homes

South Central Wisconsin

Sept 10-11, 16-18, 2011 Parade of Homes

May 24, 2011 Voyager Village Golf Club (Webb Lake area)

Aug. 24, 2011 Trap Shoot, Outdoors, New Holstein * Dec 2, 2011 Holiday Party & Installation Banquet, Millhome Supper Club, Kiel

Networking Nights First Tuesday of the month Contact NABA office for location 5:30 pm Social Hour 6:30 pm Dinner with guest speaker to follow

Visit www.northlandareabuilders. com for details

Monthly Sept. 21, 2011 Installation

Monthly

BBW: Oct. 25, 2011

go to www.scwbaonline.com

July 18, 2011

Education classes posted on www. scvhba.com

South West Wisconsin St. Croix Valley Valley

Aug. 13-14, 17-21, 2011 Parade of Homes/ Condos * March 9-11, 2012 Home Expo & Parade of Remodeled Homes

Wausau Area

Feb. 3-5, 2012 Home Show

Winnebago

March 2012 Home & Garden Show, Sunnyview Expo Center, Oshkosh* April 29-May 1, May 5-8, 2011 Parade of Homes

BBW: Oct. 12, 2011 LaSure’s, Oshkosh

Sept. 14, 2011 Installation Fin ‘n Feather, Winneconne * Jan. 6, 2012 Holiday Party, Fin ‘n Feather, Winneconne

See calendar at www.whba.net

Wolf River

April 13-15, 2012 Home & Cottage Show

August 9, 2011

Oct. 11, 2011 Installation

See www.wolfriverbuilders.com

August 4, 2011, Ridgeway Country Club, Neenah

Networking events, first Tuesday of the month, visit vhba.com for details

Various -- visit www.vhba.com for schedule

Aug. 26, 2011 Sporting Clay Shoot

Wisconsin Badger Builder • Summer 2011 • www.wisbuild.org

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