NPBA January 2013 Newsletter

Mission StatementThe North Peninsula Building Association

represents builders and associates of the building industry. We advocate constant improvement of

building and business practices to provide quality construction in our community.

Vol. 6, Issue 1 www.npba.info 360-452-8160 PO Box 748 • 3430 E. Highway 101, Ste. #1, Port Angeles, WA 98362 January 2013

NPBA Silent Auction Chair, Donna Knifsend of Lawsuit Prevention & Management, would like to send a special thank you to all of those who contributed auction items and bid generously at the NPBA Silent Auction & Holiday Gala which took place on Dec. 6. Thanks to our very generous members and community supporters, the auction raised $2,300 for the NPBA Community Support Fund! Stay tuned to our February newsletter to see where funds were distributed. If you would like to be a part of the fun this year, e-mail [email protected].

NPBA Silent Auction Raises $2,300!

by Dr. Elliot Eisenberg

� e mortgage interest deduc-tion (MID) cost the U.S. Treasury $88.8 billion in 2011, making it the second largest tax break for indi-viduals. � at is precisely why Con-gress has its sights set on it. However, there is much de-bate about how to reduce its costs to the Treasury and by how much.

No matter what happens, reduc-ing the MID will lower some house prices. � at being said, how Congress reduces the MID will determine how much how many houses lose value. And since so many of us own a home, sell homes or build homes, the MID will not be singled out for special treatment. Rather, Congress will cap or phase out the value of all deductions and in that way avoid favoring one deduction over an-other.

While there are several possible approaches, the � scal cli� compro-mise bill passed into law on Jan. 2 of this year phases out itemized deductions for households with incomes over $300,000. While at � rst blush this may appear to be quite damaging, I think hom-

eowners, realtors, builders and the entire housing industry have all dodged a bullet and should sleep well for quite a while, or at least until Congress reopens debate on the tax code sometime in the fu-ture.

Phasing out Schedule A de-ductions for cou-ples with incomes over $300,000 limits the impact to buyers of only the most expen-sive houses. For example, with a 10 percent down-payment on a $1.5 million house, mortgage interest would be $54,000/year, property

taxes would average $16,500, and insurance would be about $8,000, totaling $78,500 in annual housing-related expenses. To � -nance that mortgage, the $78,500 should ideally not be more than 30 percent of gross income, which means qualifying requires hav-ing an annual income of roughly $260,000; comfortably below the income level at which deductions start phasing out.

� at being said, how much will a house valued at $2 million decline? By very little! In theory it will fall by the one-time lump-sum amount necessary to com-

pensate buyers for the new income taxes they will pay due to their being at or above the phaseout threshold. With interest rates cur-rently at 4 percent, this means, and trust me on this, every $1,000 in added income taxes reduces the house price by ($1,000/4 percent or) $25,000. However, in reality, these impacts will be dramatically mitigated by tax avoidance strate-gies available to the very wealthy including systematically larger down-payments, cash purchases, corporate purchases and so on.

In short, few homeowners will be impacted by the new tax treat-ment of deductions including the MID. For households with in-comes below $300,000, there are no impacts stemming from this change and for those with higher incomes, the impacts will largely be mitigated by tax avoidance behavior. At worst, only homes worth well over a million dollars will be adversely a� ected.

With huge de� cits as far as the eye can see, the tax treatment of deductions is sure to continue to change and evolve. Enjoy the de-bate, but be aware that next time you may be on the menu.

Elliot Eisenberg, Ph.D. is presi-dent of GraphsandLaughs, LLC and can be reached at [email protected]. His daily 70 word economics and policy blog can be seen at www.econ70.com.

Builders & Buyers Bypass Budget Bullet

Dr. Elliot EisenbergSave the date for Expo 2013

April 6 & 7 at SHSCheck out the latest building products and meet

builders and remodelors who can help you with your projects! Enter to win one of four $250 gi� certi� cates during the shopping spree sponsored

by Angeles Millwork & Hartnagel Building Supply. For more info, visit sequimexpo.com.

Sponsored by:

contractor SPotLIGHt

Rely on the employee owned and operated stores that contractors rely on!

3111 Hwy 101 E, Port Angeles452-8933 • hartnagels.com

1601 S “C” St., Port Angeles 457-8581 • angelesmillwork.com

www.facebook.com/ AngelesMillwork.Hartnagel

Lumber and building materials for

all types of construction projects.

—————————— Contractor Spotlight is sponsored by ——————————

S N S Roofing, llc Lic. # SNSRORL918LC

(360) 681-2333

Sean Marshall began his career in the building industry as an assembler of mobile homes. He also worked for general and roofing contractors in Seattle, Spokane and locally for 15 years until colleagues who appreciated the quality of his work, encouraged him to start his own roofing business. In fact, they told him he “would be stupid not to.”

For the first three years, Sean and his wife Shawna worked together as a team on all of their roofing jobs. With the financial support of their good friend John Cross, Shawna quit her job to “take on the business full-time with Sean.” Now with a larger crew of five, they tackle all types of residential and commercial roofing, from composite and metal, to slate, tile, torchdown and TPO. Their trustworthy staff works well together and knows their goal is that “there shouldn’t be any reason to have to return to a jobsite.”

Sean enjoys working on steep roofs and challenging projects. Recently S-N-S reroofed a home that required a huge tear off of old clay tiles, ten new skylights, all new fascia and a new Snap-Loc weathered-copper metal roof. “Plus I get to meet a lot of nice people. That’s the part I like the most,” says Sean.

S-N-S purchases the majority of their roofing materials at Hartnagel Building Supply “where the customer service staff is easy to work with,” says Sean. “We are very family oriented and so are our employees. Family comes first, along with purchasing locally to to keep our money here,” adds Shawna.

Member

npba.info

“ We hired Sean to replace our roof. It was a big project with a huge tear off. He did everything he said he would do, and he didn’t cut corners. Even though it was summertime, he made sure he left the roof protected each night just in case of rain. He finished on time, was reasonable and the clean up was excellent.” — Jim Emerson, Sequim

Vol. 6, Issue 1 January 2013

?Topic: Employer Mandate – “Play or Pay Penalty”

Background: Employer Mandate to Provide A� ordable Health Insurance Options � e Play or Pay penalty which begins in 2014, states that large employers (those employing 50 or more full-time equivalent employees) will be subject to a penalty if one or more full-time employees receives a tax credit or cost-sharing reduction (a “Subsidy”) based on one of the following conditions:

1. � e employer doesn’t o� er coverage, or 2. � e coverage o� ered by the employer

either does not provide minimum value or is una� ordable to the employee.

Note: If you have less than 50 full time (or full time equivalent) employees, this require-ment does not pertain to you. Topic: Medical Loss Ratios or MLR

Background: � e A� ordable Care Act re-quires health insurance issuers to submit data on the proportion of premium revenues spent on clinical services and quality improvement

versus administration costs. Large group plans (over 50 Employees) must spend at least 85% of premium dollars on claims and activities to improve health care quality. Individual and small group insurers must spend at least 80% of premium dollars on claims and activities to improve health care quality. If they fail to meet these standards, they will be required to provide a rebate to their customers starting in 2012. Re-bates must be paid by August 1st each year.

Topic: Summary of Bene� t and Coverage (SBC)

Background: As directed by the A� ord-able Care Act, health insurance companies will soon provide consumers with documents detailing, simple and consistent information about health plan insurance policy bene� ts and coverage. � e goal is to help consum-ers better understand the coverage they have. Health insurance companies will be required to make available a uniform glossary of health-coverage and medical terms commonly used in those documents, such as “deductible” and “co-pay”.

HEALTH CARE REFORMQUICK FACTS: WHAT IT MEANS TO YOU

Topic: Pre Existing Conditions Background: Under the A� ordable Care

Act, if you have a pre-existing condition, in-surance companies will not be allowed to deny you coverage based on that condition. For chil-dren under the age of 19, this protection was phased in beginning on September 23, 2010. For adults aged 19 and older, it will be phased in beginning on January 1, 2014. Insurers will have to accept everyone who wants to purchase a plan, regardless of their health status.

Topic: Dependent Coverage For Children Up Until The Age of 26

Background: Plans that provide coverage for dependents are required to extend the cover-age of dependents to age 26, regardless of their eligibility for other insurance coverage, e� ec-tive Sept. 23, 2010. Plans must provide cover-age to all eligible dependents, including those who are not enrolled in school, not depen-dents on their parents’ tax returns, and those who are married.

800-545-7011 www.epkbene� ts.com

Navigating Your Health Care Reform

� e A� ordable Care Act is reshaping the manner in which all of us think about health care and health insur-ance. Over the next few months and years, as the various pieces of the A� ordable Care Act take e� ect, it will be important for everyone to understand how the changes being made a� ect you, your employees and your business. � e class will cover speci� c pieces of the regulations that everyone needs to be made aware of and strategies on how to best prepare for the up-coming changes. Join Will Compton of EPK & Associates/Capital Bene� t Services at the Gardiner Community Center from 4-6 p.m. Feb. 20 to learn more. � ere is no charge for the class but you must register by visiting www.biaw.com/Education_ClassRegister.aspx?sID=29813 or by calling Amanda with the BIAW at 360-352-7800 ext. 114.

Vol. 6, Issue 1 January 2013

Donna L. Knifsend

DearDonna

Clallam PUD - Your Partner in Conservation

www.clallampud.net/conservationCalendar of Events

Dear Donna:Question: It is that time of year when most of us make

New Year resolutions and hope that the econ-omy picks up for the new year. What should we do to prepare our construction business for 2013?

Answer: � ere are so many tips that could be writ-

ten, but getting your legal a� airs in order would top my list. With many new laws en-acted as of Jan. 1, it is important to consult with your attorney to make sure that your business contracts and policies are compliant with state and federal laws. A few of the new laws include:

• Mandatory carbon monoxide alarms in residential homes/apartments;

• Minimum wage increases to $9.19 in Washington. (Note: � e federal minimum wage remains at $7.25 an hour.)

• Compact fl uorescent bulbs containing mercury must be recycled.

• Th e Underground Utilities Damage Pre-vention Act commonly known as Washing-ton’s so-called dig law assigns new responsi-bilities to local governments and contractors when soil is to be excavated. Sti� er penalties are in e� ect for violation of this law.

• Federal estate tax exemptions decrease to $1 million this year;

• Social media liability remains unresolved in many areas of law.

More importantly, remember that laws pre-2013 remain in e� ect. For example, all con-tractors must provide a written disclosure to consumers for residential improvements and

construction over $1,000. � is regulation has been in place for several years, but it is sur-prising how many contractors are unaware of this requirement. Contractors also must have the consumer sign the disclosure and retain the document for three (3) years. Why is this document important? Besides avoiding La-bor & Industry sanctions, this disclosure is a pre-requisite to � ling a mechanic’s lien. � is disclosure is in addition to other require-ments and is necessary even if you are in di-rect contract with the owner (as opposed to the preliminary notice). A model disclosure form is available on the Labor & Industries website.

In addition to new laws, many court deci-sions and regulatory rulings have an e� ect on how you conduct your business. Be proactive and remember that legal contracts are “living documents” that need to be reviewed no less than annually for compliance. To make legal advice a� ordable, consider:

• Alternative fee arrangements with your attorney. Review your legal invoices to de-termine whether a fl at retainer or modifi ed retainer is cost e� ective compared to hourly fees;

• Have counsel review your contracts in ad-vance of signing them because it is cheaper more cost e� ective to keep most clients out of a lawsuit then to get them out;

• Educate yourself. Understand what claus-es are in your contract. It is your responsibil-ity to understand what your rights and obli-gations are under the contract.

• Be proactive by incorporating mediation and dispute resolution procedures in your business. Customers may not always be right, but they are the foundation of your bottom line. Remember this Donnaism: “It is o� en not what you say, but how you say it!” Good communication skills by owners and employ-ees can save thousands of dollars every year in lawsuit avoidance.

Disclaimer: � e advice given herein is strictly for informational purposes only and does not refl ect advice to the readers. If you have a legal issue, see an attorney for full eval-uation and advice.

Presently, those seeking a building permit can apply for mitigation credits at the permit counter in the Department of Community Development. � ere are many details that are being worked out and � nalized. Be sure to mark your calendars for the Public Open House/Workshop from 4-7 p.m., � ursday, Jan. 17, at John Wayne Marina, that will cover how to obtain mitigation credits for building permits.

� e Olympic Resource Protection Council is accepting pledges to present a legal chal-lenge against the rule. Visit its website at olympicresoucepc.org for more information.

Dungeness Water Rule Now in Effect

Jan. 19 NPBA Annual Planning Meeting Jan. 24 General Membership Meeting, Eagles Club Port Angeles, 6 p.m.Jan. 30 NPBA Program at Sequim Association of RealtorsFeb. 8 Directory Update Form Due for 2013 NPBA DirectoryFeb. 14 NPBA Board of Directors Meeting, Midway Business CenterFeb. 20 Healthcare Reform Seminar, Gardiner Community Center, 4-6 p.m.Feb. 23 NPBA 4th Annual Bowling Tournament, Laurel Lanes, 6 p.m.Feb. 25-27 BIAW Winter Board of Directors Meeting, Olympia

CODE CORNERClallam and Je� erson County, Port Angeles, Port Townsend, Sequim, Juan de Fuca Chapter of ICC

Building a set of stairs off your deck? Keep stair geometry in mind:

� e maximum riser height shall be 7¾ inches. While the riser height can vary slightly, the greatest riser height shall not exceed the smallest by more than 3/8 inch. Open risers are permitted provided that the opening between the treads does not ex-ceed 4 inches. � e minimum tread depth shall be 10 inches. � e tread depth can vary but not more than 3/8 inch. � ere shall be a minimum of 80 inches of headroom over the stairs measured vertically from the nosing. In addition, there shall be provided a minimum of 36 inches of clear width above the handrails. Handrails are required when there are four or more risers and can be installed on only one side but must be located between 34 inches and 38 inches above the nosing.

For more deck construction codes, stay tuned.

Vol. 6, Issue 1 January 2013

For a part-time Membership Coordinator. To see complete job description and requirements, visit: NPBA.info/news. Please submit resume and cover letter via e-mail to [email protected].

NPBA is hiring!

Thank you renewing members!

Team McAleer Re/Max Fifth AvenueSecurity Services Northwest

Horizon Excavating IncAllform Welding Inc

NW Inside Out Painting IncLawsuit Prevention & Management

contractor SPotLIGHt

Rely on the employee owned and operated stores that contractors rely on!

3111 Hwy 101 E, Port Angeles452-8933 • hartnagels.com

3111 Hwy 101 E, Port Angeles1601 S “C” St., Port Angeles 457-8581 • angelesmillwork.com

www.facebook.com/ AngelesMillwork.Hartnagel

Lumber and building materials for

all types of construction projects.

—————————— Contractor Spotlight is sponsored by ——————————

S N S Roofing, llc Lic. # SNSRORL918LC

(360) 681-2333

Sean Marshall began his career in the building industry as an assembler of mobile homes. He also worked for general and roofing contractors in Seattle, Spokane and locally for 15 years until colleagues who appreciated the quality of his work, encouraged him to start his own roofing business. In fact, they told him he “would be stupid not to.”

For the first three years, Sean and his wife Shawna worked together as a team on all of their roofing jobs. With the financial support of their good friend John Cross, Shawna quit her job to “take on the business full-time with Sean.” Now with a larger crew of five, they tackle all types of residential and commercial roofing, from composite and metal, to slate, tile, torchdown and TPO. Their trustworthy staff works well together and knows their goal is that “there shouldn’t be any reason to have to return to a jobsite.”

Sean enjoys working on steep roofs and challenging projects. Recently S-N-S reroofed a home that required a huge tear off of old clay tiles, ten new skylights, all new fascia and a new Snap-Loc weathered-copper metal roof. “Plus I get to meet a lot of nice people. That’s the part I like the most,” says Sean.

S-N-S purchases the majority of their roofing materials at Hartnagel Building Supply “where the customer service staff is easy to work with,” says Sean. “We are very family oriented and so are our employees. Family comes first, along with purchasing locally to to keep our money here,” adds Shawna.

Member

npba.info

“ We hired Sean to replace our roof. It was a big project with a huge tear off. He did everything he said he would do, and he didn’t cut corners. Even though it was summertime, he made sure he left the roof protected each night just in case of rain. He finished on time, was reasonable and the clean up was excellent.” — Jim Emerson, Sequim

Member News!Custom home sales professional at-tends 3-day building related training

Nell Clausen of Estes Builders recently completed a three-day class focused on the art and science of new home construction.

“� ere was a great deal of im-portant information presented in these three training days,” said Clausen. “I will share what I learned about construc-tion terms, home site prepara-tion and the array of available � nancing options out there

with my clients.” Sponsored by the Building Industry Association of Washington, the class “taught me skills to help our customers un-derstand the building process and feel more involved in the construction of their custom home,” said Clausen. � e training was held in Tacoma.

Do you have news that you would like to share with your fellow members? Please email [email protected] or call us at 452-8160 to have your latest happenings pub-lished in our monthly newsletter or weekly Building Bulletin.

Learn how to use a free marketing tool to reach

potential customers! Get your New Year marketing plan started

o� right by learning how to use Facebook to reach potential customers and create a free web presence (especially if you don’t have a traditional website) or would like to interface it with your existing site.

Join the NPBA and social media expert Mi-chael Howe at our next General Membership Meeting to learn about what social media is and why it should matter to you. Examples of local industry professionals who are using Facebook for marketing will be showcased along with 7 Simple Tips that you can take away and implement right away! E-mail or call us at 452-8160 to RSVP to save your place at 6 p.m. � ursday, Jan. 24, at the Eagles Club in Port Angeles. Cost is $15.

� e 2013 O� cers will also installed at this meeting.

Garret DelaBarre, DelaBarre Construction PresidentAnnie O’Rourke, Dra� ing Solutions Secretary/State DirectorJulie Myers, First Federal TreasurerBill Feeley, Feeley Construction 1st Vice PresidentGreg McCarry, Westerra Homes 2nd Vice PresidentRick Gross, Estes Builders LLC Immediate Past President/State DirectorMark Smith, Mark Smith State DirectorLarry Hanna, LP Hanna Construction Builder DirectorScott Schwagler, J & J Construction Builder Director/State DirectorDan Donovan, Allform Welding, Inc.

Associate DirectorTracy Gudgel, Zenovic & Associates Associate DirectorKelly Raymond, Cherry Creek Mortgage Associate DirectorRoger Wheeler, RJ Services, Inc. Associate DirectorBill Roberds, Excel Utility Construction Inc. Life Director

2013 NPBA BOARD OF DIRECTORS & STAFF

Reminder!2013 NPBA Directory Update forms

are due back in the of� ce by no later than Feb. 8! Be sure to review the form that you received, either by e-mail or regular mail to ensure that your informa-tion is presented as you would like it to appear. Once again, our directory will be included as the cen-ter section of our Expo Program Guide which is distributed via the Sequim Gazette and Peninsula Daily News the week prior to Expo.