The meeting of the State Contractors’ Board was called to order by Vice-Chairman Dennis Johnson at 8:47 a.m., Tuesday, January 5, 1999, State Contractors Board, Reno Nevada. Exhibit A is the Meeting Agenda and Exhibit B is the Sign In Log.

BOARD MEMBERS PRESENT:

Mr. Dennis Johnson – Vice-Chairman
Mr. Doug Carson
Mr. John Lindell
Mr. Dennis Nelson (Arrived at 9:46 a.m.)
Ms. Deborah Sheltra
Mr. Michael Zech

BOARD MEMBERS ABSENT:

Mr. Kim Gregory

STAFF MEMBERS PRESENT:

Ms. Margi Grein, Executive Officer
Mr. David Reese, Legal Counsel (Cooke, Roberts & Reese)
Ms. Nancy Mathias, Licensing Administrator
Mr. Bill Rizzo, Investigations Administrator
Ms. Kathy Stewart, Licensing Supervisor
Mr. Mike Maloy, Director of Investigations
Mr. George Lyford, Director of SIU
Mr. John Sapp, Criminal Investigator
Mr. Robert Kennedy, Investigator
Mr. Gary Leonard, Investigator
Ms. Betty Wills, Recording Secretary

OTHERS PRESENT:

Debbie Arnaud, Court Reporter, Sierra Nevada Reporters; Andrei Lovett, Partner, Lovett Landscaping; Val Lovett, Partner, Lovett Landscaping; John Borrowman, BMC West; John Moore, Owner, J and R Painting; Cheryl Moore, J and R Painting; Scott and Kristin Young, Homeowners; Jim Walters, Vice President and General Manager, Gelco Services Inc. dba Insituform Technologies; Lawrence Robert Hunt, Owner, P & L Landscape & Gardening; and Robert Balkenbush, Legal Counsel, P & L Landscape & Gardening.

Ms. Grein stated, in compliance with the open meeting law, the agenda had been posted on December 29, 1998, by John Sapp, Criminal Investigator, at the Washoe County Court House, Washoe County Library, Reno City Hall and in each office of the Board in Las Vegas and in Reno.

Mr. Johnson suggested holding off the approval of the minutes of December 15, 1998 until the next meeting because Mr. Gregory was not present to sign them.

It was learned there were 18 items on the amended agenda. Each item was of an emergency nature. Additionally, Ms. Grein indicated she wanted to add a discussion to the Executive Session pertaining to the Reno Investigation Department.

APPLICATIONS

LOVETT LANDSCAPING (C10 – Landscape Contracting) NEW APPLICATION, BOARD DECISION

Andrei Lovett, Partner, and Val Lovett, Partner, were present and informed the license had been approved with a limit of $100,000 and a $10,000 bond. The one time raise in limit process was then discussed with both partners.

DEVOS CONSTRUCTION #18004B (C3 - Carpentry) ONE TIME RAISE IN LIMIT, RECONSIDERATION

Michael Devos, Owner, was present and informed the one time raise in limit had been approved for $550,000, payment and performance bonds if required.

JOSEPH PACE CONSTRUCTION INC. #39253 (B2 - Residential & Small Commercial) RAISE IN LIMIT

Joseph Pace, President, was present and informed the license had been approved with a limit of $3 million and a $15,000 bond.

The remainder of the applications on the agenda were reviewed and discussion occurred on the following: Nos. 1, 3, 9-11, 14, 17-20, 25, 35-36, 39, 42, 45, 49, 50, 56, 60-61, 66-73, 76, 80, 82, 87, 92, 99, 104, 111, 118-119, 121-122, 124, 126-127, 136-137, and 139. Mr. Nelson arrived at 9:46 a.m. and participated in the review of the Amended Agenda: Nos. 1-3, 8, 10-12, and 17-18.
 

MR. LINDELL MOVED TO REOPEN THE MEETING TO THE PUBLIC.
MR. ZECH SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

MR. LINDELL MOVED TO APPROVE ALL APPLICATIONS NOT DISCUSSED IN CLOSED SESSION PER STAFF RECOMMENDATION.
MR. ZECH SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

EXECUTIVE SESSION

DISCUSSION - MANAGEMENT LETTER, FINANCIAL RESPONSIBILITY

Ms. Mathias explained the development of new guidelines for internal use and staff instruction that had been prompted by the audit and management letter. A review of the guidelines followed.

Ms Grein presented the FY 97-98 financial statement and audit report, for the period ending 6/30/98, prepared by Solari & Sturmer, LLC. Discussion focused on legal fees, revenue, expenditures, and recovery of disciplinary costs.

FINDINGS OF FACT, CONCLUSIONS OF LAW & DECISION

CLUBB PLUMBING #42893 - FINDINGS OF FACT, CONCLUSIONS OF LAW & DECISION

Wayne Lawrence Koch, Owner, was not present.

JIM MERRITT ROOFING INC. #42049 - FINDINGS OF FACT, CONCLUSIONS OF LAW, AND DECISION
James Edward Merritt, President, was not present.

MCCLELLAND BUILDERS #39324 – DISCIPLINARY HEARING

David Brian McClelland, Owner, was not present for the disciplinary hearing. The notice of hearing had been mailed certified mail on December 5, 1998. It had been returned unclaimed on December 22, 1998. An amended notice of hearing had been mailed certified mail on December 9, 1998 and had been returned unclaimed on December 29, 1998. Subsequently, board investigator, Gary Leonard had attempted personal service to the address of record on December 22, 1998, but to no avail. The hearing was for possible violation of NRS 624.3012 (2), failure to pay for material or services; NRS 624.3013 (3) failure to establish financial responsibility or comply with the laws or the regulations of the board. The notice of hearing and the unclaimed notice of hearing were entered into the record as EXHIBIT 1.

John Borrowman, BMC West; John Moore, Owner, J and R Painting; Cheryl Moore, J and R Painting, and Gary Leonard, Investigator, were sworn in.

JOHN BORROWMAN -Mr. Maloy questioned Mr. Borrowman and learned that BMC West had filed a complaint in March, 1998. It alleged a money-owing complaint against McClelland Builders who had an open account with them. That account had been opened in April, 1997 and, subsequently, Mr. McClelland had charged various work he had in progress. The billing statements had been mailed to the address Mr. McClelland had provided and through conversations with him it was clear Mr. McClelland had received the statements and was aware of the amount owed. The total amount at that time was $10,187.79, including interest. On March 31, 1998, Mr. McClelland and BMC had entered into a payment agreement wherein Mr. McClelland agreed to pay BMC $1,000 every month with the balance to be paid off in full by July 10, 1998. The March and April payment had been missed but BMC did receive a payment in May and in June. The last payment had been received June 10, 1998. The current balance was approximately $8,900. Civil action had then been taken in court because Mr. McClelland had requested an extension after agreeing he owed the money as stated. He had signed a confession of judgment (EXHIBIT 2) which explicitly said he owed the money. Mr. McClelland had said he would have it paid off by October 12, 1998. That deadline was missed. Thereafter, Mr. McClelland asked BMC to write up a deed to his house guaranteeing the balance of the loan. Additional attorney fees had then been incurred because Mr. McClelland agreed to cover all costs determined by the court to be reasonable. When the document had been prepared Mr. McClelland refused to sign it. Further litigation had resulted in a default judgment along with the confession of judgment, which BMC had yet to collect. Thereafter, Mr. McClelland failed to appear at a court ordered debtor's review on December 22, 1998. BMC was now incurring more litigation expenses to have Mr. McClelland forced to show cause for missing the debtor's review. When asked if Mr. McClelland was still in Carson City, Mr. Borrowman answered yes, there was still some activity under McClelland Builders and an entity called Mark IV Trust. Further questioning followed.

Mr. Leonard confirmed he had attempted personal service but had been unsuccessful. He said he had had no contact with Mr. McClelland since September, 1998.

JOHN & CHERYL MOORE Under questioning, Mr. Moore said he had filed a complaint with the board in May, 1998 alleging monies due and owing on three different projects. Mr. Moore had performed all three projects for a total of $11,250. The real estate office for which one house had been built had paid for one payment of $2,450. Thereafter, Mr. McClelland had paid Kelly Moore paints $4,200. The current outstanding balance owed to J & R Painting was approximately $4,500. That was the amount the Moores had submitted to the bonding company in their claim. After the administrative meeting held in September, Mr. McClelland had written a letter indicating he agreed he owed the Moores $2,200 and the Moores agreed they would settle for that amount. Two of the houses that Mr. Moore had painted had been sold and were currently occupied while the third was Mr. McClelland's personal residence. Therefore, the Moores said Mr. McClelland had been paid for the houses Mr. Moore had worked on. The last contact with Mr. McClelland had been after the October offer of $2,200.

Mr. Nelson asked both complainants if they had filed intents to lien and if those liens had been perfected. Mrs. Moore replied Kelly Moore had filed a lien. BMC replied no, the charges had been placed on a shop account not on a specific address. The judgment BMC had received was a lien on Mr. McClelland's personal residence but not on the jobs.

The evidentiary was closed. A motion was made and seconded to allow further discussion, which resulted in the motion that follows.

MR. CARSON MOVED TO REFER THE MATTER TO FINDINGS OF FACT AND CONCLUSIONS OF LAW AND TO SUMMARILY SUSPEND LICENSE #39324, MCCLELLAND BUILDERS, FOR PUBLIC HEALTH, SAFETY AND WELFARE.
MS. SHELTRA SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

EXECUTIVE SESSION (Continued)

EXECUTIVE OFFICER'S REPORTS- 6/30/98 AND 9/30/98

Ms. Grein presented the Executive’s Officers Report for the period ending June 30, 1998 and September 30, 1998.

MR. ZECH MOVED TO APPROVE THE EXECUTIVE OFFICER'S REPORT.
MR. CARSON SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

FOLLOW-UP ON 10/29/98 MANAGEMENT LETTER

Document imaging, procedures, policies, investigation’s pending reports, status of the Reno Investigation’s department and management goals were discussed. During this discussion the Board was notified the allegation process had been eliminated.

DISCIPLINARY HEARING

BURKE CONSTRUCTION #39690 - DISCIPLINARY HEARING

Burke Chrismer Deniz, Owner, was not present for the hearing. The notice of hearing had been mailed December 5, 1998 to the address of record. It had been returned unclaimed on December 21, 1998. A second notice had been sent regular mail on December 11, 1998. The hearing was for possible violation of NRS 624.3017 (1), substandard workmanship; NRS 624.3013 (5), failure to comply with the law or regulations of the board, to wit, NAC 624.700 (3) (b). The hearing notice was entered into the record as EXHIBIT 1. Homeowner photographs were entered into the record as EXHIBIT 2. The unclaimed notice of hearing was entered into the record as EXHIBIT 3.

Scott and Kristin Young, Homeowners; Robert Kennedy, Investigator; and Gary Leonard, Investigator, were sworn in.

Mr. Maloy established that the Youngs had purchased a property in Elko, which Mr. Deniz had been in the process of building. The Youngs had the walk-through on September 24, 1997. A list of items the Youngs wanted corrected had been prepared and included in the hearing file. There were 30 items on the punch list, which Mr. Deniz had agreed to correct. The list had been reviewed with Mr. Deniz and some items were agreed upon to leave as is, while the majority of the list had been taken care of since that time. Subsequently, in December, 1997 the Youngs had filed a complaint because the work had not been completed. The main item of the complaint was the siding. EXHIBIT 2, photographs Mr. Young had taken the previous week, indicated nail holes in the siding that needed painting as well as cracking and warping in the siding in certain areas. Additionally, the siding was delaminating; the kitchen ceiling had not been painted properly; an electrical outlet in one of the bedrooms did not work when another appliance was plugged in; and there were problems with the backsplashes in both bathrooms. The licensee had never denied the responsibility of the workmanship issues and always promised to take care of the problems. The last time Mr. Deniz had performed any work on the property was on October 11, 1998, which also was the last time the Youngs had had any contact with him. Mr. Young said if Mr. Deniz agreed to return and finish the corrective work, he would allow him to complete the project. Mr. Young was mostly concerned with having the outside completed before it all had to be redone.

A question and answer period ensued wherein it was learned Mr. Deniz lived in Truckee and wherein Mr. Maloy was asked why board staff had not taken photographs. Mr. Leonard verified the photographs Mr. Young had taken and said when he had been on site it had not occurred to him to take any. He said he had verified the complaint but since Mr. Deniz was going to come back he had not taken any pictures. Mr. Maloy said Mr. Leonard had not looked underneath the siding to see if the bottom edge had been primed or painted. Mr. Kennedy said he had been on the Young's property on April 15, 1998. He had been asked to look at only the siding. He had checked the bottom of the siding. It had not been painted or nailed to industry standards nor had it been sealed on the bottom. Mr. Leonard said the building department had gotten involved with the siding issue and made Mr. Deniz go back and re-nail it. In July, 1997, Mr. Leonard had validated the six items in the notice to correct. They did not meet industry standards. Mr. Maloy said two administrative hearings had been scheduled and Mr. Leonard confirmed Mr. Deniz had not appeared for either one.

The evidentiary was closed.

Anthony Hooper, President, had provided authorization to be represented by Jim Walters, Vice President and General Manager. The hearing was for possible violation of NRS 624.3013 (5), failure to comply with the provisions of the law or regulations of the board, to wit: NAC 624.285, termination of association of natural person qualifying by examination on behalf of another natural person or firm: Notice; replacement with qualified natural person; NRS 624.3013 (5), failure to comply with the provisions of NAC 624.640 (3) and (4), to wit: duties concerning licenses; and NRS 624.3013 (2), misrepresentation. The hearing notice was entered into the record as EXHIBIT 1.

Jim Walters, Vice President and General Manager; Kathy Stewart; and Mike Maloy, were sworn in and the stipulation was signed. Mr. Maloy indicated the waiver of the 30-day notice was on page 22 of the hearing notice.

Mr. Maloy informed the Board that on November 6, 1998 he had received notice that Insituform West had bid on a city of Reno sewer project, listing the license number on the bid as #33867, which is Insituform Technologies. Insituform West was not licensed at the time and Insituform Technologies had not renewed their license as of June 1, 1998. Mr. Maloy had then contacted the city, received the bid papers, and advised them that license #33867 was not active at the time of bid.

Mr. Maloy asked Ms. Stewart to detail the events as they had occurred regarding license #33867, Insituform Technologies. She said a female representing the company had brought in the renewal application. The qualifier and an officer had not signed the renewal application. In fact, the qualifier and one of the officers had been lined through indicating there had been some form of a change. The application had then been rejected. The individual stated the two people were still with the company. She was thereafter instructed the board needed notarized signatures for the qualifier, James Mohaghan, and the officer who had been lined through. The following day, the same individual returned with the renewal application that appeared to have been signed by the two people who had previously been lined out. Along with the renewal application there were attachments from a notary certifying those signatures had been witnessed. The license file had then been reviewed for signatures. They did not match. Ms. Stewart had next advised the company representative the two signing individuals needed to be contacted for verification that they did, in fact, sign the renewal application. On November 6, 1998, Ms. Stewart met with Mr. Walters to discuss license #33867 and what was needed to reinstate the license. Discussion also occurred regarding another license, which had recently expired, and pending applications. Ms. Stewart followed-up with Jim Monaghan to ascertain what his position was with the company and as to whether or not he had signed the renewal application. Mr. Monaghan stated he had not signed the renewal application. He further stated he had left the company on, approximately, October 21, 1997. He then provided Ms. Stewart with a written statement (EXHIBIT D of the hearing file) to that effect. In their meeting, Mr. Walters failed to disclose that the qualifier was no longer employed with the company. The conversation centered on what needed to be done as far as the officers and the name change. When apprised that the qualifier’s signature needed to be verified, Mr. Walters had indicated that was not a problem and he did ask for the necessary forms to change the qualifier.

Mr. Maloy next turned to questioning Mr. Walters who agreed he had had several discussions with Mr. Maloy and it was his desire, and the company’s desire, to put the issues behind them as soon as possible. One of his concerns was to protect the secretary who may have submitted the renewal application. He told the Board he was responsible that notice had not been sent when Mr. Monaghan left the company. He missed it. He did not realize it was an obligation of the company. He made a mistake and he was sorry. The home office in St. Louis, Missouri, normally took care of administrative changes, not the satellite office, which was the case in this instance. This one had fallen through the cracks.

The second charge on the hearing notice was for a false signature of Mr. Monaghan on the renewal. Mr. Walters confirmed that at no time in his conversations with Mr. Maloy did he deny that there were possible violations. He then proceeded to explain what had happened with the renewal application. To summarize: for the purpose of securing a license for the City of Reno bid and due to someone’s misunderstanding regarding the renewal process, the renewal application had been submitted, rejected, and then taken to the Sacramento office for a notary to sign certifying that the officer and the qualifier who had been lined out were still with the company.

Mr. Walters said the company had been low bidder on the city of Reno project but after meeting with Mr. Maloy and Ms. Stewart it was very clear to him that what had occurred was a violation of the licensing requirements of the state. The company had then returned to the City of Reno and told them they would not pursue the award. Under questioning by the Board Mr. Walters was asked who had changed and falsified the names, and had it been by direction of management? He replied it was a young lady in the Salem, Oregon office who had been relieved of her former duties and transferred to the accounting department. It had not been by management request, that person had been in charge of licenses and had attempted to rectify something that had fallen through the cracks. A second secretary in the Sacramento office had notarized the documents by the first person’s direction. More discussion occurred regarding the impropriety.

The evidentiary was closed.

THE MOTION CARRIED. (MS. SHELTRA WAS OPPOSED)

THE MOTION CARRIED. (MR. CARSON AND MS. SHELTRA WERE OPPOSED)

INSITUFORM TECHNOLOGIES, dba Gelco Services inc. #33867 (C40 – Insituform Reline/Grouting) CHANGE IN QUALIFIER, RENEWAL OF EXPIRED LICENSE, OFFICER CHANGE, WITH RENEWAL, BOARD DECISIONS

INSITUFORM TECHNOLOGIES, INC. (A – General Engineering) NEW APPLICATION, BOARD DECISION

Jim Walters, Vice President and General Manager, was asked if he wished to withdraw the three applications pertaining to license #33867? He answered only if he was assured he could move forward with the application for Insituform Technologies, Inc. It was his agenda to leave the board office this day with a license to do business. He was then asked if he wished to go ahead with the A-General Engineering license. Mr. Walters replied: "Very much so".

MR. NELSON MOVED TO APPROVE AN A-GENERAL ENGINEERING LICENSE TO INSITUFORM TECHNOLOGIES, INC. WITH A LICENSE LIMIT OF UNLIMITED AND A $50,000 BOND CONTINGENT UPON THE FINE LEVIED UPON LICENSE #33867 BEING PAID BEFORE ISSUANCE, TO WIT: TO RECOVER THE INVESTIGATIVE COSTS NOT TO EXCEED $5,000; AND TO DENY THE THREE APPLICATIONS SUBMITTED FOR LICENSE #33867.

APPLICATION HEARING

P & L Landscape & Gardening – APPLICATION HEARING (Continued from 11/5/98)

Lawrence Robert Hunt, Owner, was present with his attorney, Robert Balkenbush. The applicant, per his legal counsel, had waived the mandatory 30-day notice. The hearing was for possible violation of NRS 624.263, failure to meet the criteria for establishing financial responsibility; and NRS 624.265, good character. The hearing notice was entered into the record as EXHIBIT 1.

Mr. Hunt and Ms. Stewart were sworn in and the stipulation was signed.

The allegation of failure to establish financial responsibility had been evidenced by two separate filings for chapter 7 bankruptcy by Lawrence and Sammie Hunt in 1979 and in 1989. The allegation of failure to establish financial responsibility and lack of good character were evidenced by the prior revocation of license #26773, in the name of Huntco, a Nevada Corporation, and license #19816, Lawrence R. Hunt, dba Huntco Landscaping and Sprinklers. The two licenses had been revoked for violations of NRS 624.3013 (3), failure to establish financial responsibility; NRS 624.3014 (a), not using the name set forth on the license; NRS 624.3016 (1), fraudulent acts by a contractor; and NRS 624.3013 (5), failure to comply with regulations of the board. Additionally, Mr. Hunt had made application for a contractor’s license in 1994, which had been denied per NRS 624.263, failure to establish financial responsibility, and NRS 624.3013 (2), misrepresentation. Mr. Hunt had not appeared at either hearing.

Mr. Hunt had been requested to provide a current financial statement. A personal financial statement had been provided on behalf of Lawrence and Penny Hunt. A current credit report had also been provided.

Mr. Hunt admitted he did not attend the revocation hearings because it was a bad time in his life. He believed it would be useless to attend. At the time, he did not really think there was enough reason to revoke his licenses

Mr. Balkenbush then told the Board why Mr. Hunt was now seeking a license. As a Risk Manager for a health care corporation which was now collapsing its Nevada office, Mr. Hunt was interested in acquiring a license as an alternative to making a living and providing for his new family. Mr. Balkenbush next explained Mr. Hunt’s reason for attempting to acquire a license in 1994 and countered the findings of fact from that hearing with explanation.

Mr. Zech told Mr. Hunt the real problem was he did not attend the revocation hearing and he was now saying he had learned his lesson and wanted his license back. Mr. Nelson agreed with Mr. Zech and asked Mr. Hunt why he had not withdrawn the 1994 license application if he knew the business opportunity, which had presented itself, had fallen apart? Had he have done so, there would have been no reason for the findings of fact and it would not now be a matter of record. Mr. Balkenbush agreed that Mr. Hunt’s failure to attend the revocation hearing and the application hearing demonstrated disrespect for the board and that Mr. Hunt was responsible.

Mr. Hunt apologized for not attending the hearings. He said, at the time, he really had no intention of continuing with the landscaping business. It had been a terrible time for him but now he had a new wife and he was financially much more secured.

The evidentiary was closed.

No one from the general public was present to speak for or against any items on the agenda.

There being no further business to come before the Board, the meeting was adjourned by Vice-Chairman Johnson at 3:28 p.m.

Respectfully Submitted,
Betty Wills, Recording Secretary
 

APPROVED:
Margi Grein, Executive Officer

Dennis Johnson, Vice-Chairman