MINUTES OF THE MEETING

February 23, 1999

The meeting of the State Contractors’ Board was called to order by Vice-Chairman Dennis Johnson at 8:38 a.m., Tuesday, February 23, 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 (Arrived at 4:03 p.m.)

Mr. Dennis Johnson – Vice-Chairman

Mr. Doug Carson

Mr. John Lindell

Mr. Dennis Nelson

Ms. Deborah Sheltra

Mr. Michael Zech (Exited at 4:00 p.m.)

BOARD MEMBERS ABSENT:

Mr. Kim Gregory (Until 4:03 p.m.)

STAFF MEMBERS PRESENT:

Ms. Margi Grein, Executive Officer

Mr. Robert Griffy, Legal Counsel (Haney, Woloson & Mullins) (Exited at 4:00 p.m.)

Mr. Dennis Haney, Legal Counsel (Haney, Woloson & Mullins) (Arrived at 3:55 p.m.)

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. Clark Thomas, Investigator

Ms. Betty Wills, Recording Secretary

OTHERS PRESENT:

Cari Inkenbrandt, Court Reporter, CSR Associates of Nevada; Michael Kerry, Member, California Design and Construction LLC; Eduardo Pacheco, Owner, Durango Roofing; Leon Benzer, Manager and Qualifier, Silver Lining Construction International; Attorney David Hall, Silver Lining Construction International; Barbara Calise, President, First Time Construction Inc.; Bruce Spangrud, Vice President and Qualifier, First Time Construction Inc.; Glen Callender, Manager and Qualifier, Glenwood Construction LLC; Bruce Bilyew, President, Building Dynamics; Donald Williams, Esquire; Charles Leslie Partington, Owner, M C Mojave Construction; Kenneth D. Goodrich, Owner, Kenneth D. Goodrich; Mark DiMartino, President, Synergy Restaurant Group; David Royal Baumgartener; Curtis Coca; Tucash Gibson; Ruth Boothe, Former Board Investigator; David Stephens, Legal Counsel for M C Mojave Construction; Keith Gregory, Legal Counsel for Kenneth D. Goodrich and X L A Group, Robert Sylvain, City Attorney Office, City of Las Vegas, Dennis Anderson, City Engineer, City of Las Vegas; Bill Curran, Legal Counsel for Granite Construction; Roger Drumm, Developer; Eddie Riggs, Granite Construction; Richard Buenting, Granite Construction; Bob Gorillo, Developer; Scott Freeman, Esquire; and Rick Harrison, City of Las Vegas.

The approval of the minutes and the legislative discussion were put on hold until the Executive Session.

Ms. Grein stated the agenda had been posted, in compliance with the open meeting law, on February 17, 1999, by Ron Ramsey, 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.

The amended agenda consisted of 18 items, each of an emergency nature. Ms. Grein said there were two requests for advisory opinions, one from the City of Las Vegas, regarding the subterranean parking garage, which was a part of the Neonopolis Entertainment, Retail & Shopping Complex. There was also a request from Granite Construction regarding the same project. Ms. Grein requested both items be presented at 4:00 p.m. She also requested that the minutes of January 26, 1999 be added to the Executive Session along with the minutes of January 19, 1999. One additional item was added to the amended agenda as well, a status report on the letter received from S & S Landscaping.

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).

CALIFORNIA DESIGN AND CONSTRUCTION LLC (B2 – Residential & Small Commercial) NEW APPLICATION, NAME SIMILARITY

Michael Kerry, Member, was present. Discussion focused on James E. Merritt, Member. It was pointed out that James Edward Merritt had recently lost his sole proprietorship license in the state of Nevada. Mr. Kerry said he had not been aware of it. The Board then cautioned him about Mr. Merritt and Merritt’s past history in Nevada. Later in the day, a different social security number acknowledged that the James E. Merritt on this license application was not the same James Edward Merritt of Merritt Roofing and was not the one who had lost his Nevada license.

MR. ZECH SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

The one time raise in limit was explained to Mr. Kerry.

DURANGO ROOFING (C15A - Roofing) NEW APPLICATION

Eduardo Pacheco, Owner, was present and questioned as to what size jobs he intended to perform. He said he planned on performing small residential roofing projects until his finances were stronger. The license was approved with a limit of $25,000 and a $5,000 bond.

SILVER LINING CONSTRUCTION INTERNATIONAL (B2 – Residential & Small Commercial) NEW

APPLICATION, REQUEST WAIVER OF EXAMS

SILVER LINING CONSTRUCTION INTERNATIONAL #37356 (C3 – Carpentry) OFFICER CHANGE

SILVER LINING CONSTRUCTION INTERNATIONAL #37357 (C15A – Roofing) OFFICER CHANGE

Leon Benzer, Manager and Qualifier, and Attorney David Hall, were introduced. Mr. Benzer said he had originally applied for a B2 license but was told the C3 would cover the type of work he was doing. He said he had been a remodeling contractor when he applied. But now the City Building Department would not accept his license to perform additions, they wanted a B2 license and would not allow Mr. Benzer to pull permits with his C3 license.

It was pointed out to Mr. Benzer that in 1993 several claims had been paid out by the bonding company. The bonding company had set up a payment plan but a recent update indicated Mr. Benzer had not kept up with the terms of the plan. Additionally, the 1992 judgment awarded AC Houston had not been made current. The credit report was also discussed.

Mr. Benzer said he had sold the company in 1993 to Michael DiArzio, Universal Builders dba Traditional Builders. The contract stated Mr. DiArzio was to pay all the vendors and merchants. Mr. DiArzio failed to make good on the terms of the contract and Mr. Benzer had been required to finish what Mr. DiArzio failed to do. He detailed how this had affected him financially.

He said he had letters from AC Houston Lumber, Payless Cash Ways and others. It was suggested Mr. Benzer provide all the information to staff.

MS. SHELTRA SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

Mr. Nelson clarified whatever type of license the building department determined was necessary to perform a project was final.

FIRST TIME CONSTRUCTION INC (C3 - Carpentry) NEW APPLICATION, RECONSIDERATION

Barbara Calise, President, and Bruce Spangrud, Vice President and Qualifier, were present for the reconsideration. The application had been reviewed on January 19 and had intended to deny it based on a prior conviction by Bruce Spangrud and financial concerns. Mr. Lyford told the Board he had contacted the probation department regarding the false statement made. The conviction pertained to certifications that had to be sent to the EPA regarding the qualities and the abilities of the water filtration systems.

Mr. Spangrud stated he planned on performing small remodeling jobs. He hoped to ultimately acquire a landscaping license as well. Since his release from prison he had been building portable BBQs.

MR. LINDELL SECONDED THE MOTION.

THE MOTION CARRIED. (Ms. Sheltra was opposed)

GLENWOOD CONSTRUCTION LLC (C10 – Landscape Contracting), NEW APPLICATION, BOARD DECISION

GLENWOOD CONSTRUCTION LLC (C5 – Concrete Contracting), NEW APPLICATION, BOARD DECISION

Glen Callender, Manager and Qualifier, was present. Discussion ensued regarding Mr. Callender’s previous and current financial problems. The Board felt it best that all members be present for the discussion. Indemnification was also discussed. Mr. Callender was informed the questions the Board needed to ask needed to be directed to the other members of the LLC and regarded Mr. Callender’s background.

MR. LINDELL SECONDED THE MOTION.

Discussion followed.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

BUILDING DYNAMICS #19199 (B2 – Residential & Small Commercial) ONE TIME RAISE IN LIMIT

Bruce Bilyew, President, was present and notified the one time raise in limit had been approved for $1.3 million, payment and performance bonds if required.

MACK ELECTRIC #45677 (C2 – Electrical Contracting) CHANGE IN QUALIFIER

Ms. Grein told the Board that on October 20, 1998 the Board had revoked the license of H L Electric. Homer Lee Gordy had been the qualifying Partner. At that time, the Board had made a motion that Mack Electric be brought in for a hearing. That mandate had slipped through the cracks and staff was now citing the company for a hearing. Hopefully, it would be on the March 23^rd agenda.

Mr. Nelson stated he had a conflict and would abstain.

After some dialogue, the Board agreed to deny the application based on the criminal history of the proposed qualifier.

The following applications were reviewed and discussion occurred on the following: Nos. 1-16. 19-21, 23, 25-31, 35, 39, 43, 45, 50-51, 53, 61-62, 66-68, 72-75, 79, 80-81, 85, 87, 92-94, 96, 101, 104, and 106-107. The Amended Agenda: Nos. 1, 3, 5, 8, 10, and 13-16.

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

DONALD WILLIAMS, ESQUIRE - INTERVIEW

Ms. Grein stated Mr. Williams had sent a letter concerning invalid complaints on the record of his client, Peak Pool Plastering. She, in turn, had responded to Mr. Williams' letter pointing out NRS 239.010 prohibited the board from deleting or removing complaints that have been filed against a contractor, valid or invalid.

Mr. Williams then explained what had occurred with his client, Peak Pool Plastering, in a complaint filed by California Pool. The complaint was found to be invalid but since it remained part of his client's record, it impacted his business negatively if the consumer did not take the time to find out that the complaint was invalid. He asked the Board to expunge the matter from his client's record as if it had never been filed. He voiced a second concern in that there was no punishment against those who filed invalid complaints.

Ms. Grein remarked, when requested, it was board policy to provide complaint information containing a brief explanation of the complaint as well as the disposition of it. Mr. Johnson added the Board did not have the power to delete or expunge those records. Mr. Griffy agreed saying it would be necessary to pursue it in the courts or to change the statutes because the Board did not have the authority to oppose an Attorney General's (AG) opinion or the statute.

SUMMARY SUSPENSIONS

TOUCHSTONE DEVELOPMENT CORP. #43469 - SUMMARY SUSPENSION

Roger Lynn Nix, President, was not present nor was anyone else present to represent him.

Mr. Knapp said after the first of the year he had received word from the Mesquite building department that Touchstone Development was either going out or was out of business. At the time, the investigative division had only two open complaints for the licensee. Thereafter, Investigator Dante made some phone calls and found that Touchstone Development Corp, indeed was going under. He subsequently received documents from Roger Nix stating they wanted to voluntarily surrender their license, they no longer had any intention of doing business in Nevada. Subsequently, Mr. Dante verified Touchstone Development Corp. had moved out of Nevada and were now in Salt Lake City where they were under an active investigation by the Utah contractors' board for diversion of funds. Mr. Knapp said a financial statement had been requested and received the previous day. He then requested the Board grant a summary suspension, adding Touchstone Development would be noticed and brought before the Board. He said Mr. Nix had been in touch with Mr. Dante and knew of the meeting today but had no intention of appearing. Discussion ensued wherein it was learned a portion of the bond, approximately $10,000, had been paid out to suppliers, with more filings by suppliers anticipated.

MR. LINDELL SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

It was recommended the matter be turned over to the AG's office.

HARRISON DEVELOPMENT CORP. #42348 - SUMMARY SUSPENSION

Mr. Knapp remarked Harrison Development Corp. appeared to have vacated Nevada. The license had been suspended on August 4, 1998 for no bond. Mr. Knapp said his division had attempted to work with Harrison Development who had hired an individual who was to hire other contractors to make the necessary fixes, repairs and corrections. However, that arrangement did not work out. Subsequently, correction notices had been sent out but had been ignored. Investigator Thomas stated his last contact with a representative of Harrison Development Corp. had been two months ago. There had never been any contact with the principals and there was now no way to contact them.

MR. ZECH SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

FINANCIAL STATEMENT - 12/31/98

MR. ZECH SECONDED THE MOTION.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

The Executive Session was continued until later in the day.

KENNETH D. GOODRICH #23501 DISCIPLINARY HEARING

M C MOJAVE CONSTRUCTION #25771 DISCIPLINARY HEARING

The hearing was for possible violation of NRS 624.3013 (5), failure to comply with the provisions of this chapter or the regulations of the board, to wit: NRS 624.290, acting in a joint venture or combination without additional license; NRS 624.3012 (2), willful or deliberate failure by any licensee or agent or officer thereof to pay any monies when due for any material or services rendered in connection with his operations as a contractor; NRS 624.3015 (1) & (3), acting in a capacity of a contractor beyond the scope of the license: and knowingly entering into a contract with a contractor while that contractor is not licensed, or bidding to contract or entering into a contract with a contractor for work in excess of his limit or beyond the scope of his license; and NRS 624.3013 (3), failure to establish financial responsibility. All charges applied to both licenses. The hearing notice was entered into the record as EXHIBIT 1.

Charles Leslie Partington, Owner, M C Mojave Construction; Kenneth D. Goodrich, Owner, Kenneth D. Goodrich; Ron Ramsey, Investigator; Mark DiMartino, President, Synergy Restaurant Group; David Royal Baumgartener; Curtis Coca; Tucash Gibson; and Ruth Boothe, Former Board Investigator. Keith Gregory, Legal Counsel for Kenneth D. Goodrich and David Stephens, Legal Counsel for M C Mojave Construction were identified and the stipulation was signed by both parties.

Attorney Gregory stated that in regard to the charges that had been brought against both licenses, both parties were willing to stipulate to NRS 624.3013 (5), to wit, NRS 624.290 and NRS 624.3015 (1) & (3). He did not stipulate to NRS 624.3012 (2) or NRS 624.3013 (3).

Discussion next focused on Mr. DiMartino’s letter alleging Mr. Baumgartener had not been paid monies owed for painting the restaurant. Attorney Gregory explained there was a civil action pending between Mr. DiMartino as the owner and Mr. Partington and Mr. Goodrich as the general contractors. The matter was set for arbitration on March 22, 1999. He clarified the problem he had with the issue was Mr. Baumgartener had not filed a complaint with the board, or civilly, or with the labor board for moneys. In fact, Mr. Baumgartener had not taken any steps to allege that anybody owed him money. It was only Mr. DiMartino, through his letter, who had alleged it. Mr. Baumgartener was unlicensed and he had a contract with an unlicensed entity. Attorney Gregory questioned how the item had gotten before the board when it had not been properly noticed and there was no evidence or documentation. He then asked the Board to table the matter, suggesting it all be resolved in one civil matter. Mr. Griffy concurred.

Mr. DiMartino urged the Board to invoke the fullest punishment upon the two licensees. Under questioning, Mr. DiMartino revealed he had not paid the full amount of the contract that he had with Kenneth D Goodrich and M C Mojave. Only 88% of the $210,000 contract had been paid in November, 1996. The job was not completed until February, 1997. The issues surrounding the remaining amount were to be dealt with in the civil arbitration meeting. When asked if the painting portion had been withheld out of the remaining 12% of the contract, Mr. DiMartino said he had no idea. Mr. Nelson asked if the painting was the only issue. Mr. DiMartino answered there were more issue

s but those issues were not before the board. The only issue before the board was the painting.

Ruth Boothe, Former Board Investigator, answered the question why the two licensees entered into the joint venture in the first place. At the time, Racee (Mr. Goodrich) did not have a B license and needed M C Mojave to bid the job.

MR. LINDELL SECONDED THE MOTION.

Discussion on the motion followed wherein comments were made as to the degree of the charges and the lack of information to establish the severity of them.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

Penalty

MR. NELSON SECONDED THE MOTION.

In further dialogue, Mr. Nelson questioned if the new consolidator had acquired the stock of Kenneth D Goodrich and was now part of American Residential Services. Edward Lubbers identified himself and confirmed there had been a roll-up. American Residential Services did buy the stock but he said he was not sure if it was Racee or Kenneth D. Goodrich. There was a license American Residential Services now worked under. Attorney Gregory clarified that American Residential Services did not purchase license #23501.

THE MOTION CARRIED UNANIMOUSLY BY ALL PRESENT.

X L A GROUP #41026 & #41027 - HEARING (Continued from 1/19/99)

Mr. Zech abstained. Attorney Keith Gregory presented a status update. He said he had been informed by Richard Cuen, President, that $11,000 had been paid to Johnson Controls to settle the claim; Red Mountain Ready Mix had been paid $2,500 to reduce that balance to approximately $4,000; and there still remained an outstanding balance to Denko Drywall. He said he had been expecting a fax pertaining to a possible payment agreement with Denko Drywall but he did not receive it prior to the hearing. According to Mr. Cuen and Mr. Fradella there were no other unpaid contractors or suppliers.

Clark Thomas, Board Investigator, said as of the day prior to the meeting, Denko Drywall had not been contacted. They were still owed $4,300. Red Mountain Ready Mix also said there had been no contact and they were still owed $6,564.05. Dunn Edwards was going through an internal reorganization and confirmed they had money owed to them but they were unable to confirm the amount. Mirage Electric was still owed $5,100.05. Dependable Glass had been owed $1,316.17 but that had been taken care of by Mrs. Walgreen. Southwest Door and Concrete Accessories had been paid. Johnson Controls had not been part of the original hearing. Mr. Gregory added the homeowner had not yet been reimbursed but he held a deed of trust on a piece of property, which would make him whole. That was the agreement.

EXECUTIVE SESSION (Continued)

Mr. Rizzo presented the status report for the Investigations Division, Ms. Mathias gave the status report for the Licensing Division, and Mr. Lyford detailed the status report for the Special Investigations Division.

S & S LANDSCAPING - DISCUSSION

Linc Dante, Board Investigator, detailed the events, which had occurred to date. Board policy was then discussed.

Ms. Grein provided the Board with a legislative update, specifying the date and times various bills would be heard in committee.

No one was present for the workshop.

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Mr. Dennis Haney arrived at 3:55 p.m. and assumed the position as Board Attorney in place of Mr. Griffy. Mr. Zech departed the meeting at 4:00 p.m. and Mr. Kim Gregory arrived at 4:03 and assumed the Chair.

Ms. Grein explained the request had been received on February 19, 1999 from the city. She later pointed out the discussion was not a contested matter.

Robert Sylvain, City Attorney, and Dennis Anderson, City Engineer, were identified. It was learned Granite Construction was also seeking an opinion on the same project. Bill Curran, Legal Counsel for Granite Construction, said he was Granite’s Representative. Other testifiers included Roger Drumm, Developer; Eddie Riggs, Granite Construction; Richard Buenting, Granite Construction; Bob Gorillo, and Scott Freeman, Esquire.

Mr. Haney declared that many of the board members had either contracts with or had bids pending with or other business relationships with many of the bidders listed on the project. He asked if there were any objections to the individual members sitting to hear the matter. If so, it would be necessary for them to recuse themselves, and if all did so, it would be necessary for the Governor to appoint somebody to render a view on the issue. Thereafter, each board member declared his or her relationship to the individuals involved. No one voiced an objection. Before proceeding, Mr. Gregory disclosed that individual parties interested in the matter had called several of the board members. Again, no objection was raised.

Mr. Gregory then established that an advisory opinion was based upon the information received and the quality of the question asked and the scope of the explanation provided. He said the final determination of the project was in the hands of the City. They had the right to reject or accept anything and everything contained in their bid documents for whatever reason they would care to do so. The role of the State Contractors’ Board was to offer an opinion to a specific question, not determine who was low bidder or a successful bidder. He then asked what is the question?

Mr. Sylvain detailed what the project was. He said, when completed, the subterranean parking garage would be owned by the Redevelopment Agency and the entertainment, retail complex would be owned by the developer. Mr. Sylvain next corrected a statement on his application for an opinion. He said the City’s portion of the project, the subterranean parking garage, was not going to be built in phases, only the overall structure above it. Before turning the floor over to Mr. Anderson, Mr. Silvain stated the City had received 4 bids, 2 from A license holders and 2 from B license holders. He said the City was not taking any position on which was the correct license, it was seeking the guidance of the Board. But he added that the City felt that because of the language under NRS 624.215 these were mutually exclusive, and that it had to be one or the other." Mr. Anderson then summarized the project.

Mr. Haney addressed the legal issues. He read NRS 624.215 (3). He asked if that was the intent of the structure, to hold people? Mr. Anderson answered that was the intent. Mr. Haney said that description applied to a classification B or AB license holder. He next read NRS 624.215 (2) and said that definition applied to a classification A license holder. He told Mr. Anderson he would have to choose. Mr. Haney said it was necessary to ask what was the intent of the author of the project?

Hereafter, discussion focused on intent. Was the project two projects or one, was it fixed works or a building? Each testifier presented their opinion as to what the project was. During this discussion Mr. Sylvain stated, for the record,: "Under our bid documents, any questions of licensure of a bidder is to be referred to the State Contractors’ Board and the State Contractors’ Board’s determination is final and binding." Mr. Gregory informed Mr. Silvain the matter was not a contested hearing. Mr. Silvain replied: "That’s fine, but I’m saying your advisory opinion, for the purpose of our bidding process, becomes a final decision.

MR. LINDELL SECONDED THE MOTION.

Discussion on the motion followed.

Mr. Lindell asked that parking structure be included in the motion. Mr. Carson did not revise his motion after further dialogue.

MS. SHELTRA SECONDED THE MOTION.

Kirk Harrison, City of Las Vegas, interjected: "I believe that whatever this project is, it is…whatever there is in the plans and specifications are in the plans and specifications…The point I’m trying to make is the determination of licensure shouldn’t rest with a subjective opinion from the City as to what this is."

After further consideration, the following motion was acted upon.

MR. JOHNSON SECONDED THE MOTION.

THE MOTION CARRIED. (MS. SHELTRA WAS OPPOSED)

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 5:33 p.m.

Respectfully Submitted,

Betty Wills, Recording Secretary

APPROVED:

Margi Grein, Executive Officer

Kim Gregory, Chairman Dennis Johnson, Vice Chairman