I remember reading about a guy who really had to fight conviction for shooting a bear on his deck, sniffing/pawing at his back door. It wasn't WI, but he was initially charged since he "could have got away" It was like 1-2 appeals later (and alot of $$ I'm sure) before he was ok.
I live down in Fall Creek (by Eau Claire) We've got 1 right on the edge of town in a pretty small stretch of woods by the way. Rarely seen, but it does do a number on my uncle's bird feeders (he's only 5 houses down) I wouldn't hesitate to shoot if it came up to the house, but would hesitate if just in the back yard area.
The surrounding woods and farms are really seeing alot of bears. Not too much of a nuisance for people living out in the country or near the woods yet, but I'm sure it won't be long.
In your case, they should really get that bear out of town before something bad happens. Property loss/destruction is bad, but what if someone really gets hurt sometime.