MINUTES OF THE MEETING

FEBRUARY 9 1999

The meeting of the State Contractors’ Board was called to order by Chairman Kim Gregory at 8:33 a.m., Tuesday, February 9, 1999, State Contractors Board, Reno Nevada. Exhibit A is the Meeting Agenda and Exhibit B is the Sign In Log.

BOARD MEMBERS PRESENT:

Mr. Kim Gregory - Chairman

Mr. Doug Carson

Mr. Dennis Johnson

Mr. John Lindell

Mr. Dennis Nelson

Ms. Deborah Sheltra

Mr. Michael Zech

BOARD MEMBERS ABSENT:

None

STAFF MEMBERS PRESENT:

Ms. Margi Grein, Executive Officer

Mr. Dennis Haney, Legal Counsel (Haney, Woloson & Mullins)

Mr. David Reese, Legal Counsel (Cooke, Roberts & Reese)

Ms. Nancy Mathias, Licensing Administrator

Mr. Bill Rizzo, Investigations Administrator

Ms. Kathy Stewart, Licensing Supervisor

Mr. Tom Knapp, Director of Investigations, Las Vegas

Mr. George Lyford, Director of SIU

Mr. Mike Maloy, Director of Investigations, Reno

Mr. Jack Edstrom, Investigator

Mr. Gary Leonard, Investigator

Ms. Betty Wills, Recording Secretary

OTHERS PRESENT:

Karen Yates, Court Reporter, Sierra Nevada Reporters; Fred Hillerby, Legislative Representative; Bob Barengo, Legislative Representative; Scott Freeman, Legal Counsel, Siemens Building Technologies Inc.; Wally Winkel, General Counsel, Siemens Building Technologies Inc.; Bruce Becker, Qualified Employee (QE), Siemens Building Technologies Inc.; Tony Parisi, General Manager; Siemens Building Technologies Inc.; Jan Feldman, Legal Counsel, Siemens Building Technologies Inc.; Kevin Tremayne, Owner, Advanced Remodeling & Construction; Darryl Banks, Owner, Darryl Banks Construction Co., Bret Van Dyne, President, Bret Van Dyne Roofing; James Michael Rhodes, President, Rhodes Homes; Robert M. Beville, Rhodes Homes; Warren Kiggins, President, Rhodes Homes; Owen Nitz, Legal Counsel, Rhodes Homes; Gary Pakele, Legal Counsel, Swan Development; Henry Brownwell & Joan Brownwell, Complainants; Steve Swanson, Partner, Swan Development; Kelly Morris, Manager, Starlite Concrete; and Gary Brownwell, Owner, Starlite Concrete.

Ms. Grein stated, in compliance with the open meeting law, the agenda had been posted on February 3, 1999, by Ron Carney, 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.

It was learned there were 25 items on the amended agenda. Each item was of an emergency nature.

Mr. Gregory called for a motion to approve the minutes of January 19, 1999.

MR. ZECH SECONDED THE MOTION.

Fred Hillerby and Bob Barengo, Legislative Representatives, were present and introduced to the Board. Dialogue then ensued regarding various legislation of possible interest to the Board.

The following motion closed the meeting to the public.

The meeting was then closed to the public pursuant to NRS 241.030 to discuss financial and other data, which is confidential under NRS 624.110 (2).

SIEMENS BUILDING TECHNOLOGIES INC. (C2 – Electrical Contracting) NEW APPLICATION, BOARD DECISION

SIEMENS BUILDING TECHNOLOGIES INC. (C41C – Fire Alarms) NEW APPLICATION, BOARD DECISION

SIEMENS BUILDING TECHNOLOGIES INC. (C40 – Temperature Controls) NEW APPLICATION, BOARD DECISION

Ms. Grein explained an informal enforcement advisory committee convened on February 8, 1999 to evaluate files L-9811-046-CC and L-9902-048-IR. The committee recommended the Board accept and approve the stipulated settlement agreements related to Siemens Building Technologies Inc., and Landis-Staefa, Inc., as final resolution to the above mentioned files.

Mr. Gregory questioned if there were two stipulations and Ms. Grein replied yes, for acting as an alleged unlicensed contractor.

Scott Freeman, Legal Counsel; Wally Winkel, General Counsel; Bruce Becker, Qualified Employee (QE); Tony Parisi, General Manager; and Jan Feldman, Legal Counsel, were identified.

Ms. Grein stated the company wished to withdraw their request for the C2 license application. There was no objection.

Mr. Gregory then counseled Mr. Becker and suggested to the others that they monitor their qualified employee.

MR. ZECH SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

For the record, Ms Sheltra asked that the investigative file numbers be included in the minutes.

MR. JOHNSON SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

Mr. Gregory cautioned those present that they now had two licenses but they needed the electrical license to do DDC controls, wiring. If they intended to pull the permit, they could subcontract the electrical work but they could not do the wiring with their C40 license. He also clarified both licenses had been approved subject to the payment of the bond and the administrative penalties as outlined in the stipulations. The bond and the adminstrative penalties had to be paid before the licenses would be issued.

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

Kevin Tremayne, Owner, was present. A new financial statement had been requested but not provided. Mr. Tremayne was making payments on the California tax lien and to a bonding company for payment of claims on his bond for his California license. Mr. Tremayne was informed that based on the information provided to date the Board would not approve the application. It was suggested he consider finding an indemnitor. Mr. Tremayne then told the Board he did not need the limit he had requested, he only wanted to do small remodeling jobs and tenant improvements. He had no plans to hire employees. He then explained what had happened to him in California. The indemnification was explained Mr. Tremayne.

MR. ZECH SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

ATRIUM DOOR AND WINDOW COMPANY OF ARIZONA (C8 – Glass & Glazing) NEW APPLICATION, BOARD DECISION.

Bob Deakin and Don DeZonia were present and notified the license had been approved with a license limit of $500,000 and a $20,000 bond.

A & M SERVICES (C1 – Plumbing & Heating) NEW APPLICATION, NAME SIMILARITY

Leonard M. Haire, Owner, was present and informed the license had been approved with a limit of $10,000 and a $5,000 bond.

DARRYL BANKS CONSTRUCTION CO. (B2 – Residential & Small Commercial) NEW APPLICATION

Darryl Banks, Owner, was present and informed the Board he intended to perform jobs in the $500,000 range. When asked what kind of jobs he intended to perform, Mr. Banks replied mostly commercial. Mr. Gregory explained it was the Board’s desire to get him started in business but with a smaller license limit. The indemnification process was then explained.

MR. JOHNSON SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

N S CONSTRUCTION CO. (B2 – Residential & Small Commercial) ONE TIME RAISE IN LIMIT

Imtiaz Ahmed, Owner, was present and notified that the one time raise in limit had been approved with a license limit of $325,000, payment and performance bonds if required.

BRET VAN DYNE ROOFING (C15 – Roofing & Siding) NEW APPLICATION

Bret Van Dyne, President, was present and informed the Board he was interested in surrendering his sole proprietorship license and incorporating. It was explained to him that the corporate license could be issued at a lower limit than what he currently had on the sole proprietorship. Mr. Van Dyne then explained his current circumstances, stating he was starting over. It was suggested to Mr. Van Dyne that he keep his sole proprietorship license until he was able to build up more finances in the corporation or he could indemnify the corporate license. If he wanted both licenses, the corporate license could be issued with the same license number he currently had and an alpha designator to differentiate the two.

MR. ZECH SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

CARPETMAX FLOORING CENTER #42399A (C3B – Wood Flooring) CHANGE IN QUALIFIER, BOARD DECISION

CARPETMAX FLOORING CENTER #42399A (C3B – Wood Flooring) CHANGE IN OFFICER, BOARD DECISION

CARPETMAX FLOORING CENTER #42400A (C16A, C, D, – Covering Floors; Plastic Tile & Wallboard) CHANGE IN QUALIFIER, BOARD DECISION

CARPETMAX FLOORING CENTER #42400A (C16A, C, D, – Covering Floors; Plastic Tile & Wallboard) CHANGE IN OFFICER, BOARD DECISION

CARPETMAX FLOORING CENTER #42401A (C19 – Install Terrazzo & Marble) CHANGE IN QUALIFIER, BOARD DECISION

CARPETMAX FLOORING CENTER #42401A (C19 – Install Terrazzo & Marble)) CHANGE IN OFFICER, BOARD DECISION

Jimmy Bice and Bill Jacanes were present and informed all changes in qualifiers and officers had been approved.

Thereafter, some of the applications on the agenda were reviewed and discussion occurred on the following: Nos. 2, 4-12. The remainder of the applications were reviewed at the end of the day and discussion occurred on the following: #13-16, 18, 24-25, 29-30, 33, 38, 45, 47, 51, 56, 58, 62, 64, 71-75, 78, 80-81, 83, 86, 89, 92-93, 96-100, 107-110, 114, 116, 119, 123-127, 129, 132-134, 143, 150-151, 153-154, 156-157, 163, 167-170, 174-175, 177, 181, and 186. The Amended Agenda: Nos. 1, 4, 8-9, 14-15, 18, 20, and 23-24.

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

A motion was made, seconded, and carried to approve all applications not discussed in closed session per staff recommendation.

RHODES DESIGN AND DEVELOPMENT CORP. dba RHODES HOMES #28530 – RECONSIDERATION FOR REHEARING AND REQUEST TO PRESENT ADDITIONAL EVIDENCE

The following witnesses were sworn in: James Michael Rhodes, President; Robert M. Beville; Warren Kiggins, President; and Tom Knapp; Director of Investigations, Las Vegas.

Mr. Zech abstained due to conflict of interest.

Mr. Haney stated Rhodes Homes had requested the opportunity to present additional evidence to the Board after the Board had taken action but did not formalize it. That request had been granted resulting in today’s rehearing to allow Rhodes Homes to present additional evidence. He explained that in the first hearing held on October 20, 1998, the then legal counsel, Rob Johnson, had signed a stipulation waiving written findings of fact and conclusions of law, which had concluded through the last hearing on January 20, 1999.

Owen Nitz, Legal Counsel for Rhodes Homes was identified and waived the stipulation, indicating the presence of a court reporter was adequate.

Mr. Haney then recapped the previous proceedings and said he had since spoken with Mr. Nitz numerous times. It was Mr. Nitz’s desire that his client resolve not only the Anderson matter but all outstanding matters before the board, adopt a procedure eliminating future complaint issues with the board, and to allow him to explain the current position of Rhodes Homes.

Mr. Nitz stated there was a fax from Mr. Anderson, Complainant, denoting he was withdrawing his complaint. There had been one item left, it had been resolved. Mr. Anderson’s expenses had been taken care of through a settlement agreement. Randy Costner, who had appeared at all hearings, and who had been in charge of Customer Service and Warranty department, had been terminated. His reports to Mr. Rhodes had always indicated there were no problems. Mr. Rhodes had not been aware that the first hearing, which had been held on October 20^th, had been conducted or that Mr. Anderson had filed a complaint. Mr. Rhodes found out only when Mr. Costner reported back on January 19th and told him that his license had been suspended. Immediately thereafter, Mr. Rhodes spoke with Mr. Knapp and learned about all of the complaints. Subsequently, Mr. Rhodes and Mr. Nitz spoke with Mr. Knapp and Mr. Nitz asked Mr. Knapp to prepare him a list of all the complaints. From this a matrix was prepared whereby Rhodes could see where each complaint stood every two days. As of the day prior to today’s hearing, 11 complaints had been signed off. Five remained but would be completed within two weeks. In addition, Mr. Rhodes had hired a new president of Rhodes Homes, Warren Kiggins. He had previously been with Beazer Homes. Mr. Kiggins had prepared a new warranty policy manual which would be implemented February 10, 1999. On that day a new customer service warranty department head, formerly with Lewis Homes, would be starting with the company. A new construction manager had also been hired because the construction department and the customer service department had been separated. Both departments would now answer, separately, to Mr. Kiggins. Mr. Anderson’s fax was then entered into the record as EXHIBIT 2.

A Board discussion was entered into wherein Mr. Nitz agreed to the reimbursement of the board’s investigative costs but he asked that no fine be imposed; and several motions were formed and discussed. Ultimately, the following motion was accepted and acted upon.

MS. SHELTRA SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

MCCLELLAND BUILDERS #39374 - FINDINGS OF FACT, CONCLUSIONS OF LAW & DECISION

David Brian McClelland, Owner, was not present and no one was present on behalf of the licensee.

Penalty phase

MS. SHELTRA SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY.

BURKE CONSTRUCTION #39690 - FINDINGS OF FACT, CONCLUSIONS OF LAW, AND DECISION

Burke Chrismer Deniz, Owner, was not present and no one was present on behalf of the licensee.

MR. LINDELL SECONDED THE MOTION.

Penalty phase

In discussion, Mr. Lindell asked if it was possible to make an Attempt to collect the investigative costs because it had been alleged Mr. Deniz was working in Truckee. It was stated that it was possible to have the District Attorney or Attorney General take it to collection.

THE MOTION CARRIED UNANIMOUSLY.

SWAN DEVELOPMENT #40366 – DISCIPLINARY HEARING

The hearing was for possible violation of NRS 624.3017 (1), substandard workmanship; NRS 624.3012 (2), failure to pay for material or services; and NRS 624.3013 (3), failure to establish financial responsibility. The notice of hearing was entered into the record as EXHIBIT 1.

Gary Pakele, Legal Counsel for Swan Development, questioned, in detail, the effects of the stipulation. Thereafter, the stipulation was signed and Henry & Joan Brownwell, Complainants; Steve Swanson, Partner, Swan Development; Kelly Morris, Manager, Starlite Concrete; and Gary Brownwell, Owner, Starlite Concrete, were sworn in. Melissa Swanson, Partner, arrived late and Mr. Pakele asked if she could be excused. The request was granted.

The Brownwells: Mr. Maloy questioned the Brownwells and learned that they had entered into an agreement with Mr. Swanson to build them a spec home for $187,000. The Brownwells had paid Mr. Swanson approximately $168,000. Their plans then changed and they moved into the home in February, 1998. Discussion then focused on the agreement, EXHIBIT D of the hearing notice. It was unsigned, but the house had been built according to that agreement and Mr. Swanson had been paid according to the agreement as well. When the Brownwells moved into the house, workmanship issues arose. It cost them approximately $18,000 to correct those items, and when they filed their complaint with the board, 27 workmanship items had needed attention. Most of the items had since been corrected, with the work being performed by Mr. Swanson and some by the Brownwells themselves. Six items remained to be corrected. To date, Mr. Swanson had not contacted the Brownwells to complete any of the remaining work. More questioning ensued regarding the items, which needed correction.

Gary Leonard, Board Investigator, stated he had first inspected the Brownwell home in June, 1998 with Mr. Swanson present. 27 items had been validated. Thereafter, in a second inspection, six items had been validated and remained undone. Each did not meet the standards of the industry. Mr. Leonard said Mr. Swanson had told him the repairs would be accomplished but, in a later phone call, he disputed two of the items. Two administrative hearings had been scheduled but Mr. Swanson failed to show for either one. He called to cancel the first one, whereas there was no word regarding the second one. Mr. Pakele asked Mr. Leonard if, prior to the issuance of the notice of correction, he had checked the plans to verify whether or not Mr. Swanson had the responsibility to correct the items listed on it. Dialogue and questioning then focused on items, which Mr. Pakele said, were not a part of Mr. Swanson’s contract. It was pointed out Mr. Swanson had the responsibility to clarify those items with the board investigator.

When Mr. Gregory asked if there was a signed contract other than the proposal, it was determined there was none. It was also determined there had been no written response from Mr. Swanson to the notice to correct. At one point in time, a lien had been filed against the house but it had never been perfected.

It was then determined three items were actually workmanship issues, the tile on the snack bar, the paint on the ceilings, and the grout in the kitchen. Mr. Swanson agreed, explaining why he had not finished the repairs on the three items in question. The Brownwells were then asked if they would allow Mr. Swanson to complete the three items if the tile and paint could be acquired, the Brownwells said yes. When Mr. Swanson was asked if he was in a position to perform the three items, he too replied yes.

He said, based upon the acquisition of the tile, he could get in it done within a week or 10 days.

STARLITE CONCRETE: Gary Brownwell was questioned by Mr. Maloy and stated he had filed four money-owing complaints against Swan Development. The total amounted to approximately $28,000. Mr. Brownwell detailed his previous working relationship with Mr. Swanson, indicating all charges on each account had all been verbally agreed to, there had been no written contract. Mr. Swanson had never denied he owed Mr. Brownwell monies, he had only disputed how his payments had been applied.

Jack Edstrom, Board Investigator, stated he had contacted Mr. Swanson regarding the four projects in question. Mr. Swanson had informed him that on the Juniper Trail project, he had drawn approximately $300,000. More questioning of Mr. Brownwell and Mr. Edstrom followed. Mr. Swanson agreed there was a balance owed to Mr. Brownwell and Mr. Edstrom confirmed Mr. Swanson had admitted to him that he owed Mr. Brownwell an uncontested amount of $26,000. Mr. Swanson now said the amount could be less.

When asked why he had not attended the two administrative hearings, Mr. Swanson said he had a sick child the first meeting and he had never received the notice for the second one. He had moved and it was possible the notice had gotten lost.

The meeting was then closed to the public pursuant to NRS 241.030 to discuss financial and other data, which is confidential under NRS 624.110 (2). After the financial review the meeting was reopened to the public and Mr. Pakele presented closing statements.

The evidentiary was closed.

Mr. Zech moved to find license #40366 in violation of NRS 624.3012.

Ms. Sheltra seconded the motion.

The motion carried unanimously.

Ms. Sheltra seconded the motion.

The motion carried unanimously.

Penalty Phase

Much dialogue and thoughtful consideration preceded the next motion the Board acted upon. Regarding the motion, Mr. Gregory clarified it would be to order corrective action on the three items Swan Development had admitted to; to bring the application for renewal up in 30 days, giving the licensee an opportunity to complete the workmanship repair items; and then to listen to the status of the money owing at that point in time, 30 days. If in fact, the money-owing situation was not satisfactorily addressed, then the license renewal would be held in abeyance for further review.

Ms. Grein asked the Board for approval of the Cash Disbursements and Transfers. Ms. Sheltra moved to approve cash disbursements and transfers. Mr. Zech seconded the motion and the motion carried.

The rest of the items scheduled for discussion under Executive Session were continued to the Las Vegas meeting on February 23, 1999.

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 Chairman Gregory at 2:44 p.m.

Respectfully Submitted,

Betty Wills, Recording Secretary

APPROVED:

Margi Grein, Executive Officer

Kim Gregory, Chairman