Kenny C. Guinn Governor MEMBERS KIM W. GREGORY Chairman DOUG CARSON DENNIS K. JOHNSON JOHN LINDELL DENNIS F. NELSON DEBORAH WINNINGHAM SHELTRA MICHAEL ZECH

RENO 9670 Gateway Drive, Suite 100 Reno, Nevada 89511 (702) 688-1141 Fax (702) 688-1271 Investigations (702) 688-1150 LAS VEGAS 4220 So. Maryland Parkway Building D, Suite 800 Las Vegas, Nevada 89119 (702) 486-1100 Fax (702) 486-1190 Investigations (702) 486-1101

The meeting of the State Contractors’ Board was called to order by Chairman Kim Gregory at 9:05 a.m., Tuesday, January 19, 1999 State Contractors’ Board, Las Vegas, Nevada. Exhibit A is the Meeting Agenda and Exhibit B is the Sign In Log.

BOARD MEMBERS PRESENT:

Mr. Kim Gregory – Chairman (Exited the meeting at 1:23 p.m.)
Mr. Doug Carson
Mr. Dennis Nelson
Ms. Deborah Sheltra (Exited the meeting at 3:50 p.m.)
Mr. Michael Zech

BOARD MEMBERS ABSENT:

Mr. Dennis Johnson
Mr. John Lindell

STAFF MEMBERS PRESENT:

Ms. Margi Grein, Executive Officer
Mr. Dennis Haney, Legal Counsel (Haney, Woloson & Mullins)
Ms. Nancy Mathias, Licensing Administrator
Mr. Bill Rizzo, Investigations Administrator
Ms. Pat Potter, Licensing Supervisor
Mr. Tom Knapp, Director of Investigations
Mr. George Lyford, Director of SIU
Mr. Linc Dante, Investigator
Mr. Greg Mincheff, Investigator
Mr. Clark Thomas, Investigator
Ms. Betty Wills, Recording Secretary

OTHERS PRESENT:

Cari Inkenbrandt, Court Reporter, CSR Associates of Nevada; Ed Schmitt, President, Affordable Plumbing; Legal Counsel, Robert LePone, Affordable Plumbing; Bob Tibesar, President, Tibesar Construction; Don Puls, Tibesar Construction; William Baptist, Owner, William S. Baptist; Ladd Gilbert, President, V. T. Construction; Keith Gregory, Legal Counsel, V. T. Construction; Willie Weathers, Jr., Owner, Weathers Construction; Thomas Allison, Owner, Thomas R. Allison Construction; Ken Vasil, Owner, Ace Empire Plumbing; Dean Walker, President, Acme Electric; Gilbert McCormack, Acme Electric; Mike Garman, Manager, Millworks, LLC; Theron Jensen, member, Millworks, LLC; Kevin Robinson, Owner, Hunter Electric; Christopher Pritchard, QE, Hunter Electric; Jeffery Anderson, Manager, A N A Enterprises, LLC.; Lance Anderson, Manager, A N A Enterprises, LLC.; Steve E. Seastrom, Secretary/treasurer, Westec Interactive Security Inc.; John L. Varnau, Vice President of Operations, Westec Interactive Security Inc.; Susan Culbert, Development Department, Housing Authority of the City of Las Vegas; Johnny Kim Larsen, President, J K Larsen Enterprises Inc; Michael Bohn, Legal Counsel for J K Larsen Enterprises Inc.; Sharon Spencer, Complainant; Kelly Weaver, Concrete Accessories Incorporated; Keith Pearce, Red Mountain Ready Mix; Fred Cabara, Denko Drywall; Don Ogden, Denko Drywall; Richard Cuen, President, XLA Group; Rick Fradella, XLA Group; Gregg Anderson, Complainant; and Randy Costner, Rhodes Homes.

Ms. Grein stated the agenda had been posted, in compliance with the open meeting law, on January 12, 1999, by Express Messenger, at the Sawyer State Building, Clark County Library, Las Vegas City Hall and in each office of the Board in Las Vegas and in Reno.

A discussion ensued regarding the December 15, 1998 minutes and the dialogue, which had occurred pertaining to Professional & Legal Services. Mr. Gregory explained the modifications to Mr. Reese’s contract.

Mr. Gregory called for a motion to approve the minutes of December 15, 1998 and January 5, 1999.

APPLICATIONS

AFFORDABLE PLUMBING (C1 – Plumbing & Heating) NEW APPLICATION, BOARD DECISION

Ed Schmitt, President, and Legal Counsel, Robert LePone, were present for the decision, as well as Bob Tibesar, Tibesar Construction, and Don Puls, Tibesar Construction.

Mr. LePone stated he had performed the bankruptcy for E & M Plumbing dba Active Plumbing. He detailed the reason for the bankruptcy. Mr. Haney cautioned Mr. LePone that financial information was confidential and need not be discussed with Tibesar Construction present. Mr. Schmitt did not object to their presence, indicating he had nothing to conceal. Mr. LePone closed by saying Mr. Schmitt’s personal situation was much improved and that in the seven years Mr. Schmitt had been licensed as E & M, he had had no complaints with the exception of the Tibesar matter. And that, he believed, was all in the past.

Discussion followed wherein Mr. Puls told the Board that after Mr. Schmitt had walked off the project, a former employee of Mr. Schmitt’s had contacted him with information regarding items Mr. Schmitt had him install. That person said he knew those items had been installed incorrectly and needed correction. Mr. Puls detailed what those items were and added the total project had ultimately cost them $100,000 more than the original bid amount. Additionally, Tibesar had paid the Labor Commission a supplementary $17,000 for monies which had not been properly paid by Mr. Schmitt.

WILLIAM S. BAPTIST #45207 (B2 – Residential & Small Commercial) RAISE IN LIMIT, RECONSIDERATION, BOARD DECISION

William Baptist, Owner, was present and informed, in order to acquire a license with the $250,000 limit he was requesting, it would be necessary for him to provide a new financial statement or he could consider to personally indemnify the license. Mr. Baptist then spoke to his good character, providing letters to that effect. He indicated he performed contracting as a hobby and had a potential client who was interested in doing business with him. The one time raise in limit was then explained to him.

V. T. CONSTRUCTION COMPANY #40726 (A - General Engineering) RAISE IN LIMIT, BOARD DECISION

Ladd Gilbert, President, and Keith Gregory, Legal Counsel, were present for the decision.

WEATHERS CONSTRUCTION (B2 – Residential & Small Commercial), NEW APPLICATION, RECONSIDERATION, BOARD DECISION

Willie Weathers, Jr., Owner, was present. and notified the letter provided by the District Attorney’s office regarding child support needed to have the language corrected to conform to the statutes.

THOMAS R. ALLISON CONSTRUCTION #43595 (B2 – Residential & Small Commercial) FS ON RENEWAL, BOARD DECISION

Thomas Allison, Owner, was present for the decision. The application had been tabled to allow investigation of delinquent accounts and the status of a California license. The license had been suspended for a number of judgments, arbitration hearing, and a citation. Mr. Allison had entered into payment agreements for the delinquent accounts, one of which was not current.

Mr. Allison said he was not currently doing any work in Nevada but he had an opportunity to do interior tenant improvements in Reno, adding the people were aware of his financial situation. He said he still had his California license although it was in an inactive status.

Mr. Allison was asked if he was willing to keep the board informed of any work he accepted in Reno and to show proof that the grantor of a project had been made aware of his financial status if the license were to be renewed. Mr. Allison agreed. Mr. Gregory clarified that what he was being asked to do was to voluntarily place his license in a state of probation, conditioned upon filing with the board all work he accepted and showing proof that his financial situation had been disclosed to the parties he would perform the work for, and that the same parties would provide the board with an acknowledgment of that fact. Again, Mr. Allison agreed.

ACE EMPIRE PLUMBING (C1 – Plumbing & Heating) NEW APPLICATION

Ken Vasil, Owner, was present for the application review. Mr. Haney explained that Mr. Vasil had submitted a financial statement but he did not disclose certain items of a financial nature. Mr. Vasil then explained all items pertained to a house he had built and which he thought would close and be out of the way when the application finished processing. Dialogue ensued regarding the omission and Mr. Vasil was encouraged to get the financial statement corrected.

A motion was made, seconded and carried to table the application pending a CPA approved, corrected financial statement. Mr. Vasil was cautioned not to perform any work in the state of Nevada without a contractor’s license.

ACME ELECTRIC #2307C (C2 – Electrical Contracting) ADDITIONAL QUALIFIER, RECONSIDERATION

Dean Walker, President, and Gilbert McCormack, were present and notified the request to waive the exams for the additional qualifier had been approved.

MILLWORKS LLC (C3 – Carpentry) NEW APPLICATION, BOARD DECISION, RECONSIDERATION

Mike Garman, Manager, and Theron Jensen, member, were present for the board decision. Previously, the license application had been tabled to allow the principals time to consider indemnification. Discussion occurred regarding the revocation of the California license, the Dykeman complaint, and the $103,000 owed to suppliers. Mr. Garman said he did not realize the consequences of not attending the hearing in California.

Mr. Jensen said he had an A, General Engineering license and he hoped to renew his B2, Residential and Small Commercial license. He added he was now aware of Mr. Garman’s previous problems. He said he understood the ramifications of this license not performing well, speaking well of Mr. Garman. When asked if he would consider acting as the qualifier on the license, Mr. Jensen said he would not have a problem with it, but his experience in carpentry was limited. Mr. Jensen said he did not choose to indemnify the license because he had indemnified everything else, specifically, the vehicle and all of the suppliers.

HUNTER ELECTRIC #38140 (C2A, G – Electrical Wiring; Residential Wiring) CHANGE IN QUALIFIER, BOARD DECISION

Kevin Robinson, Owner, and Christopher Pritchard, QE, were present for the decision. Mr. Robinson was asked what his background was in electrical. Mr. Robinson said he had four years hands-on experience in helping his former QE, Barry Boehmer, bid and run the jobs. He had the background in the sense of doing custom homes or tenant improvements, but he also employed a master electrician.

The Board explained they would prefer Mr. Robinson to QE the license, detailing the reasons why. Mr. Robinson was asked to submit a letter asking the board to waive the trade exam based upon his past history with Hunter Electric.

The following applications were reviewed and discussed prior to opening the meeting to the public: Nos. 21-23, 40-42, 49, and 53-55. The remainder of the applications were reviewed at the close of the scheduled agenda and discussion occurred on the following: Nos. 3-, 4-9, 12-13, 16-17, 19, 24-27, 33--34, 36, 46, 48, 60-61, 63-64, 66, 73-74, 78, 80, 90, 93-95, 97-99, 102-104, 106, 108, 112, 114, 116, 121-123, 127, 131-132, 139, and 141. The Amended Agenda: Nos. 3, 5, 7-8, 11-12, 16, 19, 23, 25, 27, and 29,

MR. CARSON MOVED TO REOPEN THE MEETING TO THE PUBLIC.

A N A ENTERPRISES, LLC (A2,7,9 & 12 – Highways; excavating & grading; piers & foundations,; Excavating, Grading, Trenching & Surfacing) - APPLICATION HEARING

Jeffery Anderson and Lance Anderson, Managers, were present for the application hearing The applicant had waived the 30 day notice requirement in a letter dated 1/6/99. The hearing notice was entered into the record as EXHIBIT 1, and the stipulation was signed.

The application was an intent to deny for financial responsibility based upon the financial statement dated December 31, 1997. The applicant had been directed to supply a current CPA prepared financial statement and a bank confirmation form. To date, nothing had been received. A new bank statement was then provided

Both Mr. Andersons were sworn in and clarified there was no new financial statement. They had previously been licensed in Nevada for four years. The license had lapsed in August of 1997. The company had notified the board it intended to switch to a limited liability company and learned that they would have to reapply for a new license. Thereafter, a decision had been made to not renew the existing license. When asked how they had been performing work without a license, Mr. Anderson said they had been performing work in Utah and Arizona. Further financial information was discussed as well as whether or not a full A, General Engineering, license was comparable to the license A N A Enterprises held in Utah and Arizona for the purpose of reciprocity.

A motion was made, seconded, and carried to approve the license application, A2, 7, 9, and 12, with a license limit of $5 million and a $50,000 bond, FS upon renewal. Mr. Carson was opposed.

WESTEC INTERACTIVE SECURITY INC. (C2E – Signal Systems) APPLICATION HEARING

Steve E. Seastrom, Secretary/Treasurer, and John L. Varnau, Vice President of Operations, were sworn in and the Board was notified the applicant had signed a waiver of the 30-day notice. The hearing was for possible violation of NRS 624.263, financial responsibility of the applicant. The hearing file was entered into the record as EXHIBIT 1. When the stipulation was explained, the two gentlemen opted to not sign the stipulation.

The application was an intent to deny for financial responsibility based upon the financial statement dated December 31, 1997. The applicant had been directed to provide a new CPA prepared financial statement and a bank confirmation form. A financial statement was presented but it was not CPA prepared. It had been prepared by the controller’s office of Westec Interactive Security. Mr. Varnau explained the financial statements were audited in conjunction with the financial statements of its parent company.

A financial discussion was entered into, after which, the stipulation was signed. Mr. Varnau explained the parent company was not willing to indemnify but it was prepared to subordinate its inter-company debt to the priority benefit of trade payable creditors. He clarified by saying: "When we do that, that in substance treats the inter-company account as if it was equity from a trade payables perspective." Mr. Seastrom then explained what the company did.

HOUSING AUTHORITY OF THE CITY OF LAS VEGAS: Demolition, Asbestos Abatement, Site Work

Susan Culbert, Development Department, was present and asked the board what type of license was required to perform the type of work specified. Two developments were being demolished. In their scope of work, they were asking the contractor to prepare the demolition plan. He would be required to do everything. 60% was the demolition of buildings and there was some asbestos abatement required.

Mr. Gregory said the wrecking of buildings was a subclassification, A13., but the work could be performed by a full AB, a full A, or an A13 license holder. The A13 would have to subcontract the asbestos removal to an A23 license holder. The A23 license holder could not act as the general contractor on the job.

FINDINGS OF FACT AND CONCLUSIONS OF LAW & DECISIONS

J. K. LARSEN ENTERPRISES INC. #27477 FINDINGS OF FACT, CONCLUSIONS OF LAW, & DECISION

Johnny Kim Larsen, President, and Michael Bohn, Legal Counsel were present for the decision. Mr. Haney advised the Board Mr. Bohn had filed a motion to consider additional evidence. But upon discussion as to what was or was not included in the findings, Mr. Bohn withdrew his motion.

AMENDED MOTION

BIG RED CONSTRUCTION CO #33815 FINDINGS OF FACT, CONCLUSIONS OF LAW & DECISION

C C & R DEVELOPMENT CORPORATION #38786 FINDINGS OF FACT, CONCLUSIONS OF LAW & DECISION

EXECUTIVE SESSION

EXECUTIVE OFFICER’S STATUS REPORT

Discussion focused on excess office space in the Reno office, exploring possible avenues of redress.

BUDGET REVIEW

The current status of the budget was reviewed. It was decided a special board meeting should be held on January 26, 1999, in Las Vegas, to address the issue. Ms. Grein was asked to prepare an accurate revenue projection for three to six months based upon historic and conservative spending.

Mr. Gregory left the meeting at 1:23 p.m. A quorum remained.

SHARON SPENCER - INTERVIEW

Ms. Grein explained the matter concerned Sharon Spencer and Pacific Southwest Development. A complaint had been opened as a formal complaint on September 15, 1998. Linc Dante, Investigator, had been assigned to the case. Ms. Spencer had approximately 81 items on her complaint list. Mr. Dante had validated 22 of those items. One had included a building code violation. A correction letter had been sent on September 28, 1998.

Mr. Dante told the board there had been some scheduling problems on some of the correction items. However, all validated complaint items had been taken care of. One item could not be determined as valid as it involved faded carpeting. The house had been built and had stood as inventory for two years. Ms. Spencer bought the house. She had paid cash and, therefore, got a discount. It had closed within one day, but, quickly thereafter, she discovered a multitude of correctable items. Each had been taken care of, the workmanship area of the complaint was completed and the complaint had been closed. There were some issues involving disclosure which were brought to the attention of the criminal investigative division. Mr. Lyford had responded to the issues, directing Ms. Spencer to the proper organizations for the handling of each one of the issues. The purpose for the interview was not to bring issue on Ms. Spencer’s behalf because she no longer owned the property. She felt there were some injustices and she wanted to make the Board aware of the particular practices which were done.

Ms. Spencer pointed out the original interview had been scheduled for 3:00 p.m., therefore, six other people voicing the same complaints could not now be present due to the change in time. Ms. Spencer then voiced her complaint. When asked if anyone else had filed a complaint, the answer was no. Ms. Spencer was asked if she had a lawsuit with Pacific Southwest Development. Again the answer was no.

Mr. Zech stated the Board would respond to anybody who had a problem but they would have to file a formal complaint with the board before any further action could be taken.

DISCIPLINARY HEARINGS

XLA GROUP #41026 & #41027 – DISCIPLINARY HEARING

The hearing was for possible violation of NRS 624.3013 (3), failure to establish financial responsibility; NRS 624.301 (4), willful failure to comply with the terms of a construction contract or written warranty; NRS 624.3012 (2), willful or deliberate failure by any license or agent or officer thereof to pay any monies when due for materials or services rendered in connection with his operation as a contractor; and NRS 624.3017 (1), workmanship which is not commensurate with the standards of the building or construction codes adopted in the city or county in which the work was performed. The notice of hearing was entered into the record as

EXHIBIT 1.

Mr. Zech declared he had had business dealings with XLA Group. He said he would sit as the chair in order to make a quorum, but he would not vote. There was no objection.

Keith Gregory, Legal Counsel, was present along with the licensee, Richard Cuen. He told the Board he had copies of lien and general releases. Regarding the unpaid material suppliers and subcontractors referenced in the notice of hearing, only Red Mountain Ready Mix remained. They had been paid on the O’Connor residence, leaving three remaining jobs unpaid. The unpaid amount was approximately $3,700. Attorney Gregory then requested a 60-day continuance to pay off the one remaining subcontractor, Red Mountain Ready Mix. He added XLA Group was no longer in business and had not acted as such for many months. He then proceeded to explain the signed O’Connor agreement, which the Board had a copy of.

Kelly Weaver, Concrete Accessories Incorporated; Keith Pearce, Red Mountain Ready Mix; Fred Cabara, Denko Drywall; Don Ogden, Denko Drywall; Richard Cuen, President, XLA Group; and Rick Fradella, XLA Group, were sworn in.

Attorney Gregory stated if the witnesses were going to testify they were owed money, albeit late, he would stipulate to it. He was not aware of any money owing to Denko.

Mr. Knapp asked Denko Drywall to provide the balance owed on the Baby’s R Us project. It amounted to $4,343.68 and was overdue by 440 days The amount did not include interest. Demands to collect had been made by letter, fax and phone and because of not being paid, Denko showed a loss at the end of 1997, necessitating securing personal loans in order to meet payroll for several weeks.. The lien was detailed and it was pointed out a claim had been filed against the bond.

Ms. Weaver of Concrete Accessories indicated she had been paid $319.54 the previous day. She had attempted to collect for at least 7 months.

Red Mountain Ready Mix said it was owed $6,564.05 to date. The amount had been outstanding for some time. Some of the invoices dated back to February, 1997. Verbal requests had been the preferred mode of collection. The full amount of the money owing on the O’Connor residence had not been paid, $1,200 had been discounted. The money due had been sent to collections but it had been unsuccessful.

David Haynes of Southwest Door was sworn in. He stated he had been paid in August, 1998. He had been owed $9,733. The amount had been outstanding since February, 1998. He said Dr. O’Connor had taken a second loan on his house to pay him. Mr. Keith Gregory explained the agreement with Dr. O’Connor was for him to pay the subs and XLA was to reimburse him.

Mr. Gregory again asked for additional time to pay off Denko and Red Mountain Ready Mix. He said the company wanted to voluntarily surrender the license as opposed to having it revoked. It was then established the license was inactive and XLA had no current contracts.

Under discussion of the motion, Mr. Knapp was asked if there was something the Board needed to know. He pointed out the licensee had not provided the board with the information requested by subpoena nor had any requested financial documents been received. Mr. Nelson said the main objective, right now, was to see that the money-owing complaints were satisfied.

THE MOTION CARRIED. (MR. ZECH ABSTAINED)

RHODES DESIGN & DEVELOPMENT CORP. DBA RHODES HOMES #28530 (Continued from 10/20/98 & 11/17/98)

For the record, Mr. Zech declared he had a conflict in the issue. He would chair the meeting for the purpose of a quorum but he would not vote on the matter. There was no objection.

Gregg Anderson, Complainant; and Randy Costner, Rhodes Homes, were present for the hearing. Greg Mincheff, Board Investigator, related that as of December 16, 1998 everything had been completed with the exception of some railings, banisters, and spindles which had been sanded but not stained and sealed. He described what remained to be accomplished, adding that Rhodes Homes had been provided with the three days it had requested to complete the work. It was his understanding that the stain to match the rest of the stain was not available. But there had been no letter or phone call to the board to notify anyone of that fact.

Mr. Costner stated it was his understanding that Mr. Mincheff’s information regarding the stain was correct. On the last day Rhodes Homes had been to the Anderson residence, they did not have the proper stain, in the right color. No one was now living in the home, therefore, Rhodes Homes had an access problem. He said Rhodes Homes was still prepared to go into the house and stain it. It would take them one hour. The work was not done and they could not get into the home to finish it. Mr. Anderson explained they had since moved. More discussion followed.

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 Acting Chairman Zech at 4:00 p.m.

Respectfully Submitted,
Betty Wills, Recording Secretary

APPROVED:
Margi Grein, Executive Officer
Kim Gregory, Chairman Michael Zech, Acting Chairman