Congratulations to the 2011 Award Winners!

(Click on a photo thumbnail below to see a larger version)

Rick Kot, R.A. Kot Homes
Advocacy Award
With Keith Kylmala 2012 BAM President

Kot has been a member of the builders association for over 20 years and a very active leader. He currently serves as a member of BAM’s Executive Committee, the BAM GR Committee and the Legal Action Committee of which he’s a founding member. Kot actively advocates for the industry at  both the state and national capitols and has served on multiple task forces put together by the Minnesota Department of Labor and Industry.

George Cundy, Cundy, Santine and Associates Architects LCC
Advocacy Award

Cundy has been a member for over 20 years and very active in the association. He currently serves on BAM’s Board of Directors and Government Relations Committee. He’s been a strong voice advocating for the association and industry and the state and national capitols and has served many years on both the BAM GR Committee and his local association’s (Builders Association of the Twin Cities) GR committees.

Rochester Area Builders
Local Association of the Year Award
Pictured: Rory Lenton, President of RAB & John Eischen, Executive Officer of RAB

The local association of the year award is presented to the local association that’s proven exceptional in membership growth, retention and participation the past year. RAB has, in the past year, expanded the number of networking events they provide to members in an effort to continually improve on their programs, events and services. RAB has over 30 working committees involving close to 400 members.

Knutson Construction Services of Rochester, MN
Distinguished Business of the Year Award
Pictured: Mike Larson & Nick Leimer of Knutson with presenter Donna Herriott, Ferguson Enterprises 2009 Distinguished Business

Knutston was presented with the distinguished business of the year award because they’ve been an active member of their local association, RAB, for almost 10 years and in that time the company has had several active employees participating in 10 different association committees and in leadership roles as well. Knutson says it believes involvement in the association, “Is great for our industry, our community and our employee’s personal and professional growth.”

Bryan Schoenberger, Modern Living Concepts
President’s Award
With 2011 BAM President Todd Bjerstedt

Schoenberger has been a member of the association since 2008 and in just four years has served as president of his local association, Lakes Region Builders Association, and currently serves as a director of BAM’s board. Schoenberger also served on the 2011 Unlicensed Contractor Task Force. Bjerstedt said, “Because of members like Bryan I know there is a bright future for the association and the industry.”

Rosemary Brenden, Hawkinson Companies
Rising Star Award
With Nick Leimer 2009 Rising Star

Brenden was presented with the Rising Star Award given to a member who has committed themselves to the service of BAM or their local association at an accelerated level in the past year. Brenden attended the 2011 BAM Leadership Conference and filled many leadership roles the past year at her local association, Northern Minnesota Builders Association (NMBA). She brought in several new members and actively participated in six association committees. “Her spirit and enthusiasm make her an excellent leader for the association,” said Larry Curtiss, president of NMBA.

Keven Dunlap, Liberty Savings Bank
Associate of the Year Award

Dunlap was presented with the prestigious Associate of the Year Award given to an associate member based on their service to the local, state and national associations and the community. Dunlap has been a member of the association for 24 years and is very involved in the association and his community serving on several local organization boards including the Salvation Army. “Keven has proven to be an invaluable board member through his experience and leadership skills,” said Nick Preusser, president of the Central Minnesota Builders Association.

Kathe Ostrom, CN Ostrom & Son
Remodeler of the Year Award
With Ron Nesvold 2010 Remodeler of the Year

Ostrom has been a member of the association since 2000 and has served on the board of directors and numerous committees of her local (BATC), state and national builders associations. She’s held many leadership positions including 2008 BAM President. Remodeler of the Year is given to a remodeler based on their service to the local, state and national associations and their involvement in the community.

Terry Hammack, Anderson Hammack Construction
Builder of the Year Award

Hammack was presented with the prestigious Builder of the Year Award because of his service to his local (Arrowhead Builders Association), state and national associations and his commitment to quality construction. Hammack has been a member for over 10 years and has been very active serving on numerous committees in addition to the board of directors of BAM and his local association. “Terry is a supportive and practical voice for the association and industry and is respected by his colleagues and fellow association members,” said Pam Perri, BAM Executive Vice President.

Larry Cramer, L. Cramer Designers + Builders
Hall of Fame Inductee

Cramer with inducted into the Minnesota Building Industry Hall of Fame, the highest honor BAM can bestow on a member of the industry. Cramer has over 40 years of custom home experience and has been a member of the association for 25 years. He sat on the Minnesota State Building Code Appeals Board, was president of the Minneapolis Builders Association, and is a senior life director of the National Association of Home Builders.

Sandy Friend, Retired Executive Officer of Rochester Area Builders
Hall of Fame Inductee

Friend was inducted into the Hall of Fame for her significant and lasting contribution to the housing industry in Minnesota. Friend served the industry for nearly 25 years and committed countless hours of her time and energy to the advancement of the association. “Sandy is widely respected by all in the association statewide. As retired executive officer, her legacy lives on with the successful association she managed,” said Todd Bjerstedt, 2011 BAM president.

Kathe Ostrom, CN Ostrom & Son
Hall of Fame Inductee

Ostrom was inducted into the Hall of Fame because, “Kathe has a strong voice and is a strong advocate for the industry. She is dedicated to the remodeling industry at the local, state and national levels, and she’s personable, knowledgeable and does outstanding work,” says Todd Bjerstedt 2011 BAM president. Ostrom has earned numerous awards from industry groups. And she’s served on the Minnesota Department of Labor and Industry’s Construction Codes Advisory Council, Warranty Task Force and Employee Misclassification Task Force.

Marvin Windows & Doors
First Company to be inducted into the
Hall of Fame
Pictured: Jake Marvin, Chairman of the Board and CEO of Marvin Lumber and Cedar

Marvin is the first company to be inducted into the Hall of Fame and was chosen because it has consistently supported Minnesota’s home building industry and builders associations. With well respected representatives across the state such as Daryl Doehr, John Taylor, and Tom Sinning, Marvin has volunteered countless hours in support of the association and industry.

The NAHB Construction Codes and Standards Committee meeting held on Tuesday February 7th was available for viewing as a webinar. I monitored the event and the time was well spent. The software was easy to download and worked without a hitch. But what was really impressive was the prep work that NAHB codes staff put into the interactive agenda. Every agenda item had a link that immediately brought you to the topic being discussed. Slick! If I was interested in any of the materials on click and it was downloaded and saved. At the bottom of the agenda was a list of acronyms. Brilliant! Such a simple things but it really helps non-code geeks enter and better understand the world of codes and standards. The technical competence of this webinar set the bar high… I’ve got some revamping to do to make our statewide Task Force Skype calls more user friendly.

I heard some really important issue updates that will help us in Minnesota with our code adoption process.

First and foremost I am not crazy… NAHB provide it. The assumptions used to justify the R-value increases int he 2009 and 2012 International Energy Code just don’t exist. NAHB sued the Department of Energy (DOE) to release the modeling. Their answer was “it is proprietary.” What a pathetic was to craft public policy as important as a model energy code. Thank you NAHB legal staff for exposing that process and making sure future code proposals are based on transparent assumptions. I haven’t read the multi-page NAHB legal team memo to DOE but by just skimming it I know it will help me with the “need and reasonableness” statements required by Minnesota’s code adoption process.

Second, I am not alone and I have friends in high places. Minnesota is the first state in climate zone seven to consider adopting the 2012 IECC. That means we have to get the ugly out to make sure the R-value increases don’t lead to durability issues in foundations. Been there, rotted that, not going backwards. It is good to know state staff are not alone… even us code geeks.

Third, the NAHB Research Center needs home builders in zones six and seven (Minnesota) who install rigid insulation on exterior above grade walls to participate in a moisture study. The research involves placing moisture sensors in walls to gather post-construction data. The morning after the code meeting I used the link from the NAHB Research Center and sent it to one of our associate members that distributes rigid insulation. Done and done.

Fourth, it was great to visually see the standing ovation that Ed Sutton, NAHB Construction Codes and Standards Director, received from everyone in the room when he announced his retirement effective in mid-March. I have had the privilege of working with many of Ed’s staff over the past decade I’ve been in the code trenches: John, Larry, Steve, Don, Jeff, and too many others to list. These people have some of the most difficult jobs at NAHB. The fact that he kept such competent people fighting the codes fight for so long says a lot about Ed’s legacy. Ed, you couldn’t hear my, but I was clapping in Minnesota. Happy retirement, you earned it and then some.

What would I have changed? Granted the agenda was packed. But I would have loved to hear more discussion and debate about the issues. Hopefully that happened at the subcommittee level. I will definitely listen remotely to the next CCSC webinar.

See the data here.

The graph below show Minnesota civilian fire deaths 1998-2010 in single-family homes by decade of construction. The second graph is of civilian fire deaths by year of construction overlaid with changes to the Minnesota State Building Code. In 1995 the State Building Code started requiring the installation of smoke alarms that are hardwired with battery back-up. In 2003 the State Building Code began requiring smoke alarms that are hardwired with battery back up and are interconnected, meaning when one detects smoke all alarms are activated.

Click on graph thumbnails below for full images.

Kathe Ostrom, of CN Ostrom & Son, received the Robert L. Hanson Industry Service Award created in 2006 to honor BATC members for their service to the home building industry. Winners are selected by previous winners from nominations made by association members and leadership.

Jeff Schoenwetter, owner of JMS Custom Homes, was awarded Builder of the Year. Jon Coty, of Fullerton Choice/A Fullerton Company, received Associate of the Year. BATC’s Builder and Associate of the Year Awards are selected by the companies with which they do business for their excellence in the areas of “trust, communications, and business ethics,” and is touted as the association’s most coveted awards.

BAM extends a big congratulations to all three award winners!

“Effective October 3, 2011, every license, registration and certification now includes a two-character license class code (such as “BC” for residential building contractor) followed by a six-digit number (123456). This change was necessary to implement the new standardized and simplified license application and online renewal processes for all licenses, certifications and registrations (pursuant to Minnesota Statutes 326B.091 to 326B.098).”

With regard to how the new number must be used DLI stated:

“Your new license or certificate number must be included on all communication with the department and on all contracts, effective immediately.”

The letter states license or certificate numbers on all printed materials and advertisements including website and vehicles need to be changed to the new number “as soon as practicable.”

Renewing licenses online can now be done at www.dli.mn.gov/paycenter.asp and clicking on “Renew Your License.”

But there it was.  The old guard at its finest. Not gracious, not political and not even well informed.

There were a few voices trying to explain the work of the task force but to no avail.  Some suggested the task force report recommendations be taken as a whole but the intention was still transparent.  Anyone worth their salt knows that a package of controversial changes without the opportunity to mold and shape them is a losing proposition.

Then again, as I was told before the Task Force even began its work; any attempt to make structural changes at NAHB would be met with the fiercest of opposition.

Naïve me. I thought facts, the economy, and time would motivate members to act.

Facts like:

44% of local associations in 2010 did not send any members to represent them at NAHB on the Board of Directors. That is up from 32% from the previous year.

I don’t know about my state colleagues but if 44% of local associations decided to ignore their seats on the State Board I would be in a political panic.  I need 100% participation at the State level from the local associations to be successful.  They are the industry’s political base.  Is that not true at national as well?

I can understand a small percentage of locals not participating in NAHB.  But 44%?  Is that not a warning bell?

What number will get the national leadership’s attention?

NAHB’s membership has declined by over 36% in just four years.

And instead of dealing with the fact that the industry is shrinking, the board complains of locals withholding dues.  Hey guys, I got news for you. Withholding dues might be a problem but it isn’t the BIG UGLY problem. The BIG UGLY problem is that the organization has had its arms cut off by the housing depression and the heads can’t quite figure out it doesn’t have arms anymore.

Oddly enough the big statistic thrown around here today is that less than 1% of the members opened and acted on an email alert to move the membership to connect with Congress about the Mortgage Interest Deduction.

Leadership scolded everyone in the room. Less than 1%!  And by the way, we know which members are and are NOT responding to these alerts. Congratulations State Reps, 33% of you responded.  I couldn’t tell if there was there a thinly veiled threat that you better respond if you expect to get appointed to some committee chairmanship. If there wasn’t maybe there should have been. It makes sense to me. Even so 1% of the membership isn’t enough and what does that tell you?

And because of that lack of interest from the membership, the NAHB CEO announced that they may have to embark on a very expensive grassroots effort rather than spending money on PR and messaging since relying on the membership is not an option.

And oh, by the way, the IBS Show may be coming in at only 75% of projected revenues so be prepared everyone for more deficit spending.

And the reason the leadership of the organization doesn’t want to spend time on solidifying their infrastructure is because they are all consumed with the fight on Capitol Hill?

Sounds like a few alarm bells are going off but hey, if it ain’t broke don’t fix it.

Is the irony of this getting lost?  OK.  Let me be clear and not ironic.

Strengthen your infrastructure and you will strengthen you grassroots base.

Consolidate and you will expand.

Focus your efforts and you will thrive.

An EO colleague of mine told me at the onset of the Task Force discussion that no changes will come about in NAHB unless the Senior Officers actually put their own proposal for change on the table.

While I agreed with his premise, I also believed vetting concepts with the membership would get the dialogue rolling, especially in this economic environment. The Task Fore recommendations should not be the ending point, they should be the starting point. And debate should be vigorous and difficult.

The moral of the story is don’t waste NAHB resources on any more Task Forces.  Just keep doing the same thing over and over with the same people switching committee titles.

And good luck with that 1% who open their emails when NAHB is in a political crisis.  Without thoughtful changes NAHB will not get that 1% much higher but I will predict  the 44% non participation rate will be up over 50% by 2012.

How coincidental, it will be the same time they will just be getting around to discussing the task force report. And maybe a dues increase to boot.

Bold leadership must come from the top, and, in my opinion, current leadership does not have the stomach for it.

As predicted, the looming debt ceiling deadline produced a bipartisan debt-limit compromise this weekend.  This morning, the details of the deal were released, and Congressional Democrats and Republicans are being briefed throughout the day.  As Congressional leaders build support for the deal, the exact timing of House and Senate votes is fluid.  At this point, I expect the House to vote sometime this evening after the markets close.  That means the Senate probably will not vote until late tonight or tomorrow.

Up to 100 House Republicans may oppose the deal, which means 90 to 100 House Democrat votes will be needed.  In the Senate, Senators on both sides have promised not to obstruct the bill. The expectation is the deal will pass and be signed by the President.

Like the bill passed last week by the House, it creates a two-step process for lifting the debt limit.  The second step focuses on a newly-created Select Committee of six Democrats and six Republicans, which is charged with finding an additional $1.5 trillion in deficit savings.  Unlike the Select Committee that was created under Harry Reid’s proposal, the final deal does not explicitly authorize the Select Committee to consider tax reform or revenue increases; however, it does not explicitly prohibit them from doing so either.  So, there is some debate about whether tax hikes will be part of the Select Committee’s focus.  Not surprisingly, the President is already calling for the Select Committee to include tax measures in their proposal, which is consistent with his position the past several weeks.  That said, while it is unlikely that tax reform will play a role in this Select Committee, it is looking more and more likely that the Finance and Ways and Means Committee will press tax reform next year instead of waiting for 2013.

A breakdown of the deal is included below.

Budget Control Act of 2011

Basics

• Upon passage, the President can request an immediate $400 billion increase in the debt limit, to be followed by a further $500 billion increase if a resolution of disapproval is not enacted.
• This $900 billion increase comes with over $900 billion in CBO scored savings through discretionary caps , enforceable with across-the-board spending cuts that Congress would have to affirmatively vote to turn off.
• The bill establishes a Joint Select Committee that is tasked with reducing the deficit by at least $1.5 trillion.  The Committee is made up of 12 members of Congress, equally divided with 3 each of House Republicans, House Democrats, Senate Republicans, and Senate Democrats.  By November 23 of this year, the Select Committee must vote on legislation (simple majority for passage).
• Any legislation reported from the Select Committee will receive expedited consideration in both Chambers and will be voted on by December 23.  If the Select Committee produces a bill enacted into law that achieves $1.2 trillion or greater in savings, that would trigger the President’s authority to request a debt limit increase of equal amount (subject to disapproval & veto), capped at $1.5 trillion.
• The bill requires Congress to vote on a balanced budget amendment (BBA) no sooner than October 1, 2011, and no later than December 31, 2011.  If one chamber passed an amendment, the other chamber would be required to consider it.
• If a balanced budget amendment is sent to the states, that would trigger the President’s authority to request a debt limit increase of $1.5 trillion, subject to disapproval and veto, regardless of the success or failure of the Select Committee.

Trigger

• If the Select Committee does not produce enacted savings of at least $1.2 trillion, and a balanced budget amendment has not been sent to the states, then the President is given the authority to request a $1.2 trillion debt limit increase (subject to disapproval and veto).
• That $1.2 trillion would be recouped by a combination of whatever savings were enacted pursuant to the Select Committee process, if any, and an across the board spending cut (sequester).  If the Select Committee process fails to enact any savings at all, then the full $1.2 trillion would be recovered via the sequester.  The sequester process would remain in place even if a BBA were sent to the states.
• The sequester would hit defense and non-defense spending in equal dollar amounts.  The non-defense category is comprised primarily of non-defense discretionary, a limited amount of Medicare and some mandatory spending.  To the extent that the Select Committee succeeds in enacting any savings, these would reduce – or entirely obviate – the sequester.

Bottom Line

• The maximum the debt ceiling can be raised is $2.4 trillion (if the Select Committee has enacted at least $1.5 trillion in savings or if a BBA has been sent to the States).  The minimum the debt ceiling can be raised is $2.1 trillion (if the Select Committee fails to meet its target).  In both circumstances, there would be dollar for dollar cuts coupled with the debt ceiling increase.
• The trigger does not allow for increased revenues.  The trigger can only result in spending cuts through caps and sequesters, not tax increases.
• The sequester is designed to dig deep enough into programs cherished by both parties that the Select Committee would have a significant incentive to succeed.
• Because of CBO scoring conventions, the Select Committee would not be able to achieve deficit reduction through individual rate increases.
• If the Select Committee fails, then the total debt limit increase is capped at $2.1 trillion, which raises the prospect of having to raise it again before the election (depending on the health of the economy).
• As a practical matter, if the full amount of the sequester were to be triggered, it would force a debate on what spending cuts could replace amounts being proposed to be sequestered during the course of the annual appropriations process.

This morning Governor Mark Dayton signed into law 12 budget and spending bills 57 days after the close of regular session May 23, bringing an end to the 20-day government shutdown that was the longest in state, history.

After a budget agreement was made between Governor Dayton and Republican leadership last Thursday July 14th the bills were drafted and agencies began preparing to reopen.

Tuesday July 19th the Governor called a special session that began at 3:00 p.m. and after 13 hours both the House and the Senate passed all 12 bills including budget bills, a pension bill, a bonding bill and the Legacy bill and adjourned at 4:00 a.m. Wednesday morning.

The bills were signed into law by Dayton this morning, officially ending the shutdown.

Restart of Government
It will take a day before the appropriated money will officially flow to state agencies and operation will begin to get back online, said Dayton. State workers have been called back, and state parks, he said, could reopen as soon as tomorrow.

According to the state’s agreement with its employees, workers have up to three days to return to work, but Dayton said he expects most will be back Thursday. A full resumption of services could take weeks administration official explained in a conference call Tuesday. A website is set up for information on which agencies are open: www.bereadymn.com

“Restarting the state’s operations now will be no small task… calling for patience — more patience — from Minnesotans… Still, the prospect of reopening Minnesota was cheered by many.” – New York Times article on Minnesota’s government shutdown.

The budget deal was a compromise between the Governor and GOP legislative leaders Senate Majority Leader Amy Koch and Speaker of the House Kurt Zellers and was finally agreed upon after months of wrangling over the best way to balance the budget. Dayton wanted to increase income taxes on Minnesota’s top earners and Republicans said the deficit could be erased through spending cuts alone.

Even though Dayton negotiated the deal, his DFL colleagues in the Legislature criticized it. Not a single Democrat voted for the tax bill the K-12 bill or the Health and Human Service bill.

“While the budget agree[ment] was not the most ideal to anyone, it was time to compromise, end the shutdown and put Minnesota back to work,” Deputy Majority Leader Geoff Michel said in a statement.

Speaker of the House Kurt Zellers said, “This budget accomplishes what we set out to do: it does not raise taxes, cuts projected spending by $2.5 billion and bends the cost curve of unsustainable state spending. Our economy will be stronger as a result of not increasing taxes  on business and job creators.”

All special session bills can be found here:

Transportation

Public Safety/Judiciary

Legacy

Jobs

Higher Education

Environment

Pensions

Bonding

Education

State Government

Tax

Health and Human Services

Governor Mark Dayton called a special session today to begin at 3:00 p.m. this afternoon. The official proclamation was posted summoning members of the Legislature to convene.

Terms of the special session were agreed upon and a document was signed by the Governor, Speaker of the House Kurt Zellers, Senate Majority Leader Amy Koch, Senate Minority Leader Tom Bakk and House Minority Leader Paul Thissen.

The document states the Special Session will place all bills before the senate and house on their third and final reading, which is a suspension of House, Senate and State Constitution rules. No amendments will be permitted, the session will conclude within two session days and the bodies will adjourn. The session will be limited to the following items:

1. Taxes Omnibus Finance Bill
2. Education Omnibus Finance Bill
3. Capital Investment Bill
4. Health and Human Services Omnibus Finance Bill
5. State Government, Innovations and Veterans Omnibus Finance Bill
6. Transportation Omnibus Finance Bill
7. Judiciary and Public Safety Omnibus Finance Bill
8. Jobs and Economic Growth Omnibus Finance Bill
9. Environment/Energy/Commerce Omnibus Bill
10. Higher Education Omnibus Finance Bill
11. Pensions Bill
12. Legacy Bill

To watch the special session at 3pm visit: http://www.house.leg.state.mn.us/htv/schedule.asp and follow the link listed next to “Watch.”

By Pam Perri:

The residential construction industry is over-regulated. There is no doubt about it. But this week the industry had a victory.

And we need to celebrate the small regulatory victories. Let’s be honest, in the regulatory arena, our playbook is almost always running defense. The wins are about the REALLY BAD things we’re able to PREVENT from happening. There are very few times we play offense. Think about it, we don’t want to increase regulation on ourselves.

Unfortunately for us, most of the latest regulation has come from the federal government and not necessarily the state government. The new OSHA rules came from the Federal Department of Labor and the Environmental Protection Agency gave us both the stormwater regulations and those nasty lead rules.

So the WIN this week came regarding the lead rule and the EPA.

At NAHB’s request this regulation was selected for review by the EPA under the Presidential Executive Order for Regulatory Review concerning the impact of federal rules on small businesses and job creation.

The REALLY BAD thing NAHB prevented was a requirement that would have forced contractors to hire EPA-accredited dust samplers to collect several samples after a renovation and send them to an EPA-accredited lab for lead testing.

Wow, can we get more inefficient?

Because of the cost of this, as well as the waiting period for test results, and the limited number of accredited labs nationwide, professional remodelers were very concerned about homeowners’ willingness to undergo the process. The Federal EPA rejected the proposal as a result of NAHB’s request for review.

Hooray for NAHB!!!

Several problems with the rule still remain:

The EPA has yet to recognize an efficient, low-cost lead test kit that meets the requirements of the regulation.

And last year the agency removed a key consumer choice measure – the opt-out provision – which allowed homeowners with no children or pregnant women in residence to waive the rule’s requirement.

In this down economy, consumers are still balking at the extra costs of the rule and often choose to reduce the amount of work done on their homes, hire uncertified contractors, or endanger themselves by attempting the work themselves.