Answer: This is really a complex issue, but maybe not as difficult as you think it is. Clay soil is good in that it holds nutrients and moisture for a long time. It is touchy in that it holds moisture and does not drain well. It must not be worked when wet (if it sticks to your shovel it is too wet) and then of course dries hard like a brick.
You can amend it with organic matter in copious amounts. You want to use larger sized particles (sawdust for instance is too fine) to counteract the small particle size of the clay. Material such as half rotted compost, aged stable manure and bedding, pine bark fines, spoiled straw, chopped autumn leaves, rotted down bark mulch, or whatever you have easy access to will work. You can also add a small amount of fine grit or coarse builders sand -- do not use the finer grained kids'play sand. Mix it thoroughly throughout the bed and work it down at least eight inches if you can. You want a gradually change back to the native soil to avoid a stark contrast where the original meets the amended soil. You will continue adding organic matter in the form of organic mulches, keep this at a two to three inch layer year round.
In addition, you need to check your pH and nutrient levels via soil testing to make sure nothing there is out of whack. If changes are needed you would make them based on the test results. Your county extension should be able to help you with the testing and interpreting the results.
Next, if you can plant on a slight slope that will help with the drainage issue. Keep in mind that any low spot or area at the base of a slope will be wetter than midway up; the top of the slope will be the driest, and a steep slope may be extremely dry. If you have flat ground, you could consider creating slightly raised planting areas, a rise of just a few inches can do wonders.
Avoid planting things that absolutely require well drained soil such as: lavender, artemesia, yarrows, bearded iris, azaleas, our native dogwood tree (Cornus florida). These plants generally do not do well in heavy clay based soil or in wet soil. Instead, look for plants that do not mind clay or will tolerate a moister soil such as Aronia arbutifolia, Arborvitae, Ilex verticillata, Itea virginica, Clethra alnifolia, Ilex glabra, Cornus stolonifera and C. sericea, and perennials such as Monarda, Joe Pye weed, Siberian iris, Helenium, trees such as river birch (Betula nigra), red maple (Acer rubrum), willows (Salix sp.) and so on.
Your local county extension and/or professional nursery staff should be able to help you identify plants that would thrive in your existing soil conditions. A trip around the neighborhood will also show you which plants thrive locally -- this is a great indication of what to try at home in similar locations. You might also find the following web site useful in researching your choices, it includes a search feature. http://www.mobot.org/gardeninghelp/plantfinder/Alpha.asp
Also be sure you are selecting plants that are winter hardy in your zone. YOur zip code places you in zone 5A or the coldest part of zone 5. In an exposed or windy spot it might actually be as cold as zone 4.
In cold winter areas such as yours, spring planting is usually preferred but you can also plant in the fall as long as the plants go in at least 10 weeks before the first expected frost. In late fall apply a slightly heavier layer of organic mulch over the root areas to try to keep the soil consistently cold. You can also layer over top with evergreen branches if there is no snow, this is to provide an insulating pillow of air and to shade the crowns so they stay frozen solid. This will help reduce the "heaving" due to oscillating temperatures in both fall and especially spring. If you see heaved plants, try to push them back down into the soil (assuming it is not frozen) and reapply mulch. Remove excess mulch gradually as the spring weather settles.
Establishing a new garden always takes some trial and error as well as time. In California you had a longer growing season and I'm sure trying to garden in such a cold wintery zone now is a rude shock. I hope this helps.
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