Subcontractors, take note: you need a new permit to work

New state law in effect Jan. 1 requires all subcontractors to obtain an Independent Contractor Exemption Certificate

Work as a subcontractor? Hire subs to get your jobs done?
If you want to keep working in 2009, you’ll need to apply for a certificate to meet the requirements of a new state law.
Effective Jan. 1, all subcontractors must obtain an Independent Contractor Exemption Certificate (ICEC) from the Department of Labor and Industry. The cost is $150.
Without that document, the worker and the overseeing contractor can be fined up to $5,000. Plus, contractors will be required to pay back three years worth of unemployment insurance and worker’s compensation.
The new law is the government’s way of cracking down on those who are fraudulently working as independent contractors in order to avoid paying worker’s compensation, liability insurance and unemployment insurance, noted Dick Fredericks of aBest Tax Services.
Labor unions also supported the change in order to level the playing field and avoid losing bids to small companies that are able to undercut their prices, he added.
“If you work in the construction industry in the state of Minnesota and you are self-employed, you have to have this certificate,” noted Fredericks.
Are you a subcontractor?
The Internal Revenue Service (IRS) follows a nine-factor test to determine if a worker is an independent contractor or not (see sidebar on page ??).
It boils down to who is in charge. A subcontractor is given work to do, but not told when to do it, observed Fredericks. A subcontractor is paid by the job, rather than the number of hours it takes to finish the work.
Subs have their own insurance and their own equipment. They work per contract.
The Minnesota Department of Labor is beginning to actively seek out those who are dodging the law and cite them for violations, Fredericks noted.
Get incorporated
If you still have questions about whether you are a subcontractor or an employee, or if you don’t want to go through the hassle of obtaining the ICEC, Fredericks advises incorporating.
Businesses registered as limited liability companies or as corporations are exempt from the new law.
“Then there are no ifs, ands or buts if they are going to qualify for this exemption permit,” said Fredericks.
The cost of incorporating is a one-time fee of $160 to file with the state. (You do have to renew the incorporation every year at no cost, unless you’re late.) You must also pay to run a legal notice in a newspaper announcing your assumed name. The cost of hiring an accountant to handle setting up the corporation ranges from $250 to $1,000.
Fredericks noted that creating either an S corporation or limited liability corporation (LLC) would provide the same level of insulation for a subcontractor.
Clif Hilliard of Eagle Plumbing and Service in Cambridge chose to set up as a corporation rather than obtain the ICEC. When he started his company last spring, Fredericks advised him on his options.
“I just think it’s an easier way to go if you’re a contractor,” Hilliard said about his decision.
He doesn’t agree with the state’s decision to require this new permit, however, pointing out that operating as a sole proprietorship is a legal way to do business. “They should make it easier for people to be self-employed, not more difficult.”
Hilliard is facing the tough choice of not being able to continue hiring some of his subcontractors because they don’t have the certificate – and can’t afford to incorporate.
“This is going to affect a lot of people around here,” he noted.
Dave Oslund of Oslund Heating in Stanchfield has worked for decades as a local heater, obtaining jobs alone and through general contractors. His business is registered as a sole proprietorship. Each year, he pays the state a licensing fee to be a plumber, and he pays a fee to be bonded. He doesn’t understand why the state is requiring that he pay another fee and obtain yet one more license.
“I think it’s just another way for the state to get $150,” said Oslund.
Contractors can be fined
Contractors are responsible for checking to make sure that any subcontractor they hire has obtained the certificate. A list of those who have it is available online at www.doli.state.mn.us. Go to the Contractor License/Certificate Lookup Web page.
“If you have people not in compliance with the law, don’t let them work for you – just to protect yourself,” advised Fredericks. “It could easily cost you as much as you paid the person in salaries.”

To apply for the ICEC
To apply for the exemption certificate, contact the Department of Labor and Industry at dli.ic@state.mn.us or call 651-284-5074.
More information on obtaining the certificate is available at www.doli.state.mn.us. The certificate must be renewed every two years.

Who is affected?
Commercial and residential construction workers acting as independent contractors. For example, an individual who is roofing a house under contract with a licensed remodeling company would be affected. An individual roofing a house under a contract directly with the homeowner would not need an independent contractor exemption certificate.

Who does it not apply to:
Corporations, cooperatives, limited liability companies, or partnerships.

You are considered an independent contractor if you:
1) Maintain a separate business with your own office, equipment, materials, etc.
2) Hold a federal employer ID number or have filed business or self-employment taxes with the IRS.
3) Operate under contract to perform specific services for specific amounts of money.
4) Incur the major expenses related to the service being performed.
5) Are responsible for satisfactory completion of services.
6) Receive compensation for service performed under contract on a commission or per-job or competitive-bid basis only.
7) May realize a profit or suffer a loss.
8) Have continuing business liabilities or obligations.
9) Are successful or fail depending on the relationship of business receipts to expenses.

Get more info:
Browse www.doli.state.mn.us
Call 651-284-5074
Email dli.ic@state.mn.us

‘Punk kid’ retires as commissioner after successful 22-year career

Tom Pagel looks back with pride

When he joined the Isanti County Board of Commissioners in 1982, Tom Pagel was considered a punk kid who wanted to change everything.

He was 33 – half the age of everyone else on the board at the time.

He lived on a lake, not a farm. He’d been raised in the cities.

When he asked for copies of the county letterhead to respond to constituents, fellow commissioner Lloyd Stavem told him straight up, “I don’t know that I want my name on the same letterhead as you.”

It was a rocky start to a 22-year career as commissioner.

Looking back, Pagel laughs and recalls how much he learned from those first board members that he served with: Glenn Johnson, Robert Hupfer (“what a mentor he was”), Frank Weisbrod and Lloyd Stavem.

It was then as it continued to be through the years. “You discuss the issues, and you can disagree,” said Pagel. “When you’re done you still may feel like you don’t agree with the person, but it’s not personal.”

Isanti County Board members have always treated each other with respect despite being from diverse backgrounds, noted Pagel.

Pagel himself was a stay-at-home dad for a time, ran a management company, and worked for Elerby Architects. He now handles investments and has residential property in Florida, Texas and Arizona.

WHAT DOES A COMMISSIONER DO?

It’s not uncommon for Pagel to fence the question: “What does a commissioner do?”

Being a county commissioner is a time-consuming position, according to Pagel. There’s no set schedule. You attend meetings during the day, evenings and weekends – often with an hour notice. You go to funerals and birthday parties, and any other gathering a constituent asks you to attend.

“It’s easy to question what government does, but when you dig a little deeper it becomes apparent that someone has got to do it,” noted Pagel.

To be a good commissioner, you have to be willing to hear both sides of every issue, according to Pagel. You need to be open, and love people.

During his time in office, Pagel sought to be just that sort of person. He showed up at the local coffee shops to hear about the issues. He was open to new ideas and suggestions.

“I never had a horse in the race. There was nothing that serving as a commissioner benefited me personally,” Pagel noted. He wasn’t a large landowner, had no kids in the criminal system, and had no family in the welfare system.

He learned one lesson well. “Anytime you try to control people’s use of what they own, it can be very contentious.”

“I would hope that people thought of me not as a commissioner, but as a fellow resident and citizen, a voice through which they could present their concerns,” said Pagel.

During the last few decades, Pagel was off the board for one term. District lines were redrawn and pitted three incumbents (Page, Weisbrod and Ellsworth Johnson) against each other. Pagel sat one election out, and was then re-elected in 1996.

Pagel was on the board when the first county coordinator, Carolyn Drude, was hired. Previously, the county board itself was the direct supervisor of department heads, and auditor Dennis Bengtson took minutes at meetings. He worked with all four county coordinators since: George Rindelaub (current Stearns County Administrator), Larry Johnson, Robyn Sykes (current Minnesota County Insurance Trust Executive Director), and Jerry Tvedt (who retired Jan. 9, 2009).

ACCOMPLISHMENTS

There are many things the county board has accomplished over the years, but there are a few that Pagel is especially proud of.

In the mid-1990s, a county-wide addressing system was instituted. “That’s been key to improving emergency medical services,” Pagel remarked. As a firefighter and former medic, Pagel recalls plenty of times before the system was installed when they relied on directions from dispatchers to get them where they needed to be. Judy Norman, who passed away last month after a long battle with cancer, was the best, he noted. She knew where every rock and silo was in the county. “Many people have their lives because of her,” he added.

Taking an aggressive stance on welfare fraud, the county hired an investigator to focus on that issue. Thousands of dollars have been recovered since.

Garbage has been a big issue over the years. When the state decreed it was closing all landfills and no more would be opened (a ruling that was later changed), counties were left trying to figure out how to handle trash. Kanabec, Mille Lacs, Pine, Chisago and Isanti joined together to create the East Central Solid Waste Commission. They were allowed to burn or compost garbage. As composing seemed like an environmentally sound option, the commission built a facility and began experimenting with it, recalled Pagel. The project failed because they didn’t realize how much plastic was in the local waste. It was shut down in 1992.

The commission also pushed to eliminate burn barrels. While the effort was supported by Chisago and Isanti counties, the others didn’t stand behind it.

In the late 1990s, the county created the Sentence-To-Serve program for people who have screwed up but are willing to work and give back to the community, noted Pagel. The STS crews have been a huge help, doing everything from cleaning brush for townships to demolishing walls in the county Oakview renovation project.

In 1990, Pagel pushed for the creation of the Rum River Enhancement Fund, believing then as he does now that the Rum River is a huge asset to the county. The fund evolved into an overall park fund, which provided a means for the county to purchase park land. While the system is not elaborate, the land is there, and the county can now develop it.

Pagel has also supported the formation of lake improvement districts. Green Lake led the way, and was followed by Long Lake (where he lives). Lake Francis is in the process of establishing a district. The first district started out contentious, but has been well-received since.

WHAT HE'LL MISS

His plans for the future? “To relax and enjoy the grandkids.” Pagel has recently remarried, has three kids and two step-kids, with eight grandkids and another on the way.

“I’ll miss dealing with people,” he said. But he still intends to show up at local coffee shops to find out what’s going on. He’ll keep organizing the Isanti Pro Fire-Fighter Rodeo, and will continue as a member of the Isanti Fire Department and the Isanti Lions Club.

“Who knows? I might get back into public office someday,” Pagel stated.

‘I just want her back safe and sound’

Mother of missing North Branch Township girl pleads that she return home.

NORTH BRANCH TOWNSHIP – Christin Swenson’s Christmas presents are still sitting under the tree as her family waits for her to return home.
The 17-year-old North Branch High School senior has been missing since Monday, Dec. 22, 2008.
The latest tip authorities have is that she’s in Florida.
Isanti County investigators have tracked her via ATM transactions from Kansas to Texas.
“It’s like a nightmare I’m not waking up from,” said Christin’s mother, Mary Swenson.
She calls her daughter’s cell phone every day, and tells her this: “You’re not in trouble. It’s not your fault. You’ve got so much to lose. We want you back, and we love you.”
Christin is the youngest of Mary and Larry’s three children. Her brother, Jonathan, has been stationed in Iraq since June 2008. Mary admitted it’s hard to hold it together over the holidays with two children absent.
“I’m trying to stay strong and keep moving on,” stated Mary.
Teen worked in Red Wing, went to school in North Branch
According to the Isanti County Sheriff’s department, Swenson contacted her family at 8 p.m. on Monday night, Dec. 22, 2008 and stated she was on her way home from Red Wing. She never arrived.
Swenson had been renting a room in Red Wing from a girl friend on the weekends to work at an Econofoods there. When she wasn’t working at the grocery store, she was helping her cousin Wade Swenson with his three children, who range from age five to 15, according to her mother.
She would return to North Branch to attend class at North Branch High School on the weekdays. Swenson has four credits left before earning her high school diploma, and was set to graduate early in March, noted her mother.
Because of the ice on Monday, Dec. 22, her mother told her to stay in Red Wing until the roads cleared up. Mary talked to her daughter several times that day, and believed that she had agreed to work a shift at Econofoods for a friend.
Mary confirmed that her daughter had been questioned in regard to a crime in Pierce County, Wis. the week before her disappearance. She wishes Christin would have come to her with any problems she was facing.
“I just want her back safe and sound,” Mary said.
Call with information on whereabouts
Swenson is a white female, is 5.5 feet tall and weighs 105 pounds. She has long blond hair and brown eyes, and may have dyed her hair.
She was last seen driving a pewter-colored 2000 Chevrolet Malibu with the license number UGA376.
Authorities speculate that she may be with her cousin, Wade Swenson, who is wanted on several warrants unrelated to this incident.
Anyone who has seen Swenson is urged to contact the sheriff’s department at 763-689-2141.

Isanti County appoints new administrator

Kevin VanHooser will take over Jan. 12

ISANTI COUNTY – Isanti County’s newest leader was chosen by the county board on Friday, Jan. 2.
Kevin VanHooser will take over the reins from Jerry Tvedt on Jan. 12.
Tvedt’s last day as county coordinator is Jan. 9.
VanHooser, the county’s current Family Services Director, was selected from a pool of 32 applicants. Six were interviewed, and then the board narrowed it down to two: Van Hooser and Duane Hebert of Wisconsin.
Deputy County Coordinator Barb Baar anticipates that there will be a smooth transition as VanHooser is already well-acquainted with the county and its policies.
“Kevin is highly qualified,” said outgoing County Commissioner Tom Pagel. “He’s got a good working relationship with department heads.” He also praised VanHooser’s past performance as director of Family Services, noting that VanHooser turned the department around financially.
VanHooser began working for Isanti County as a social worker in 1985. In 1991, he was promoted to Social Service Director. He has overseen the human services department as a whole since 2000.
VanHooser was raised locally, graduating from Princeton High School in 1976. He earned his bachelor of science in social work and psychology from St. John’s University in Collegeville, Minn.
Then he returned home to marry his high school sweetheart, Sheila. The two continue to reside in Princeton.
VanHooser’s first job was as a Mille Lacs County social worker.
In 1998, he returned to college, earning his master’s of management and administration from Metropolitan State University.
VanHooser was content working in human services, but was encouraged to apply for the county administrator job by Tvedt and other department heads.
He’s looking forward to the challenges serving as county administrator will bring. Most of all, he’s excited to embark upon something different after 28 years in the field of human services.
“The county board knows they can get along with me, and knows I can get along with department heads,” noted VanHooser.
He pointed out that he has managed a large department for eight years. “Managing people and a budget isn’t new to me,” VanHooser said.
His goal at the start is to get settled and learn the job as fast as possible knowing the challenges that await as the state seeks to deal with a budget deficit.
Baar expects that the county board will appoint VanHooser as the interim Family Services Director, as well, until a new one can be hired.
“My hands will be very full for a couple of months,” said VanHooser.

Skogman bids farewell after 35 years

She was the first woman elected to the District 911 School Board.

When Jane Skogman joined the Cambridge-Isanti District 911 School Board 35 years ago, she carved out a place for herself in history's annals. She was the first female member elected to that board.
Since then, seven other women have served along with Skogman.
She beat out the incumbent chair
In 1973, Skogman was a farm wife taking care of five children. She hadn't given any thought to serving on the school board until a few teachers and a good friend asked if she's consider it.
"They wanted a woman on the board," recalled Skogman.
What followed was a whirlwind campaign, one that was far bigger than anything she would have done on her own.
"A couple of men drove me around the country to knock on doors," remembered Skogman. A local political party (she doesn't recall which one) held block parties to promote her. "I had tremendous help," she said.
Skogman was already known in the county because of her work with the University of Minnesota Extension program, but this pushed it over the top and swept her into office. She earned 875 votes.
She beat out the incumbent who was currently board chair. "I felt that was really something," Skogman noted.
Reason for running
"I've always felt this is such a wonderful community, I should make a contribution to it," observed Skogman. "I felt obliged to do something for the community.
"Volunteering in any capacity for the good of the community is needed to keep the community going and help keep it a good community. I felt too often that people don't appreciate what we have. They don't feel it is something we are indebted to. I feel that we are."
It was that driving belief that spurred her to get involved when she moved to the area in 1950 with her husband Deane, whose ancestors were the original settlers along Skogman Lake in 1868.
As a volunteer on the Extension Committee, Skogman visited homes around the county.
While living in Princeton that first year in Minnesota, Skogman attended the meetings of a homemakers club. Once on the family farm, Skogman started the first group in Isanti County. The Border Belles Homemakers Club continues to meet to this day, and Skogman is among seven charter members who remain.
When her children got involved in 4-H, so did she. She was club leader of the East Cambridge Cubs for 25 years.
Because her oldest daughter, Deena, was living at the Cambridge State Hospital, Skogman got involved there and served on the advisory board. While the facility has changed names, Skogman is still active on the admissions and release committee.
She has always been active at her church, Cambridge United Methodist. She began teaching Sunday School 35 years ago to make sure that her children went. She's served on a variety of committees, and brings fresh flowers from her garden in the summer to decorate the altar.
District grows
During her 35-year tenure the district has grown.
In 1973, voters approved a new school, and Isanti Junior High School was constructed on a piece of land next to the Rum River (today's Isanti Middle School). "That was a great accomplishment," said Skogman. At the time, the state didn't help fund bond referendums as it does now, so local voters shouldered the entire cost of the new school.
Parts of the old Cambridge Junior High building (now Cambridge Intermediate School) were torn down. Skogman hated to see the old building taken down, and pushed to save the bell tower. Today, it sits along Cypress Street.
Not much later, an addition was constructed onto the high school which was originally opened in 1968. The addition included a media center, gymnasium and classrooms for vocational education.
In 1990, there were additions at both the Cambridge and Isanti elementary and middle schools. Then, in 1996, a major addition enhanced the high school which included a weight room, enlarged cafeteria and performing arts center.
Two years ago, the district grew by another leap. Two new buildings were added: Cambridge Middle School at the corner of County Roads 45 and 43 and Isanti Intermediate School on County Road 5 west of Highway 65. With those buildings came a restructuring of which grades attended which schools.
"There has always been something going on at the schools," said Skogman.
While Skogman hasn't always agreed with every decision the school board has made, she praised the cooperation that was always evident. "We've had an understanding we can agree to disagree," she said.
She remembers when one board member accused the others of being railroaded by the superintendent into decisions. "That was not true then or now," stressed Skogman.
The teachers' strike in 1983 sticks out in her memory. "What a hassle it was trying to keep the schools going," Skogman recalled. "It was not a happy time."
Her responsibilities over the years have included attending a variety of committee meetings.
For 30 years, she has been part of the Schools for Equity in Education group (formerly called the Association of Growing and Stable School Districts). As a member there she has pushed that all schools be funded by the state equally, no matter whether they are in property-rich districts or not.
Before special education students were placed in the district's schools, Skogman served as the school district representative for the Cambridge State Hospital CADRE program.
She is also part of Dollars For Scholars, and she and husband provide two $1,000 scholarships each year.
She's introduced elementary students to classic literature by serving as a Picture Person, and was also active in the Junior Great Books program at Cambridge Elementary School.
For 35 years Skogman didn't miss a commencement ceremony. Last year she was told she couldn't attend as she'd recently had her knee replaced. "But, I said I was going to go," noted Skogman. And she did, cane and all.
She has held all the offices available on the board but treasurer, and is currently board chair.
Just as she was breaking new ground for women when she joined the board, Skogman was also witness to new opportunities for teenage girls. There were no intermural athletic programs offered for girls in the early '70s, but that began to change. Volleyball and basketball were added in the late '70s. Two decades later, "there was a lot of talk when we added girls hockey," Skogman recalled.
The district's community education program was also developed during her tenure.
And school boards began governing themselves by establishing a set of policies the board then reviewed regularly.
There have been many curriculum changes over the years as new methods of teaching have been introduced.
Skogman has been a strong supporter of alternative educational options. She served on the Oakland Vocational Board, and advocated for the creation of the Alternative Learning Center. During her years on the board, the district also introduced two options for year-round schooling. She is a founding member of the East Central Minnesota Cable Cooperative, which was organized in 1983 to share classes over the television.
"My first and foremost concern has been the education of our children," said Skogman. "Our children today are the leaders of tomorrow. They need to have good training and education to become those leaders. It is important we give them the best education possible."
Accomplishments
The thing she is most proud of is having sparked the creation of a volunteer program within the district. The idea came to her after attending a conference. She suggested it to the superintendent at the time, who told her such programs were for bigger schools. Skogman persisted and continued talking about it. Soon, Cambridge Elementary School Principal Sid Freitag picked up on it. Once it was going in his school building, the program spread.
"We have a wonderful volunteer program in our schools now," remarked Skogman.
Goodbye isn't easy
Saying goodbye to the board isn't easy, but it's a decision Skogman feels is best. She decided not to run again for office due to her own health issues, as well as her husband's.
She will most miss the people with whom she's come in contact.
"I have so enjoyed and appreciated the friendships," said Skogman. But she's confident that as this door closes, another will open.
To the incoming board members, she has this to say: "It's hard work. You need to always do your homework ahead of time. Read your agenda before the meeting. Give of your time – and it does take time, there's no doubt about that. And good luck."

Female District 911 School Board members:
• Barbara Nuorala
• Patricia Sundberg
• Donna Holland
• Valerie Peterson
• Jennie Becker
• Darcy Winsor
• Anne Nelson (current)
• Jeanette Polzin (will begin in 2009)

About Jane Skogman:
• Her father worked for the Soil Conservation Service, which meant the family moved often, living in Missouri, Illinois and finally Iowa.
• She attended the University of Colorado.
• Dean Skogman was raised down the road from her. She was friend with his sister, and when asked by her agreed to write to Dean while he was hospitalized after the Battle of the Bulge. They wed 60 years ago.
• She is the mother of five. Mark, the oldest, enrolled in the Army to earn his degree and he's still there. Scott lives in town and handles the daily work at the family farm. Ted lives in New Brighton and works at the University of Minnesota. Deena now lives in a group home in Mora. Marta (Benton) worked at Peoples State Bank for 23 years, but now lives in Hinckley. Skogman also has four grandkids, two step-grandkids and one great-grandchild.
• She loves to travel and has gone to Scandinavia, Alaska, the British Isles, China, Australia, New Zealand, Mexico, and Hawaii – and toured Europe on a riverboat cruise. She's an active member of the Peoples First group. "I love to see different things. Even if you've read about them, it's more exciting to see it," Skogman said.