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 8:39 a.m., Tuesday, December 1, 1998, 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

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
Mr. Mike Maloy, Director of Investigations
Ms. Kathy Stewart, Licensing Supervisor
Ms. Betty Wills, Recording Secretary

OTHERS PRESENT:

Debbie Arnaud, Court Reporter, Sierra Nevada Reporters; Bob Hoffman, Owner, Bob A. Hoffman; David Becher, President, Complete Millwork Services Inc.; Ron Stillwell, Associate, Complete Millwork Services Inc.; Kerry Barnes, Victory Woodworks; Jim Elliker, Victory Woodworks; Jeffrey N. Ricketts, Partner, 27 K; Jonathan Nikolas Ricketts, Partner, 27 K; John Binneweg, Owner, John C. Binneweg; John Iratcabal, Carson City Purchasing; John Sieben, President, American General; Ron Jacoboni, Tahoe Pool and Spa; Judy Jacoboni, Tahoe Pool and Spa; and Michael Bohn, Legal Counsel for J K Larsen Enterprises Inc.

Ms. Grein stated the agenda had been posted, in compliance with the open meeting law, on November 23, 1998, by John Sapp, at the Washoe County Court House, Washoe County Library, and Reno City Hall and in each office of the Board in Las Vegas and in Reno.

It was learned there were 28 items on the amended agenda, plus a summary suspension of J. K. Larsen, license #27477. Each item was of an emergency nature.

APPLICATIONS

D. W. ARNOLD INC. #43866 (B2 - Residential & Small Commercial) ONE TIME RAISE IN

LIMIT, BOARD DECISION

Dan Arnold, President, was present and informed the one time raise in limit had been approved for $9 million, payment and performance bond if required.

FOX PEAK DEVELOPMENT CORPORATION (B2 - Residential & Small Commercial) NEW

APPLICATION, BOARD DECISION

Ben Lombardi, Vice President, was present and informed the license had been approved with a limit of $750,000 and a $15,000 bond.

BOB A. HOFFMAN (B - General Building) NEW APPLICATION, BOARD DECISION

Bob Hoffman, Owner, was present along with George Lyford, Board Investigator, who had performed a background investigation of Mr. Hoffman. Mr. Lyford reported the investigation had been predicated on Mr. Hoffman's answering yes to the question he had a conviction. He stated that in 1986 he took money overseas for a Ciro Mancuso. He had been paid for delivering the money but he had not declared it on his tax return. He had later been charged with falsifying a tax return and taking more than $10,000 out of the United States without reporting it. Mr. Hoffman had pled guilty and received a sentence of 18 months in prison and five years probation. Mr. Lyford then explained who Mr. Mancuso was at the time of Mr. Hoffman's conviction and gave background history leading up to the conviction. Mr. Hoffman's involvement with Mr. Mancuso had lasted for approximately 8-10 years. There had been no criminal activity since the conviction and Mr. Hoffman was no longer on probation. All issues had been resolved.

NEW APPLICATION, BOARD DECISION

Thomas R. Kendricks, President, was present and notified the license had been approved with a license limit of $400,000 and a $25,000 bond, waive the 30 days.

COMPLETE MILLWORK SERVICES INC. (C3C - Cabinets & Millwork) NEW APPLICATION

David Becher, President; Ron Stillwell, Associate; Kerry Barnes, Victory Woodworks; and Jim Elliker, Victory Woodworks, were identified. It was learned Mr. Barnes had brought various protest letters with him for board review. Mr. Barnes and Mr. Elliker were asked to leave the room in order to discuss financial matters with the perspective licensee. A motion was then made, seconded and carried to open the meeting to the public.

Mr. Gregory explained to the two protestants the license had been qualified via the previous license. Mr. Barnes indicated the problem was the way Mr. Becher and Mr. Stillwell had left their last employer. It was explained to Mr. Barnes their former employer had the right to lodge a complaint with the board or the right to go to formal litigation over anything which may have occurred. There were no complaints on any of the licenses. Dialogue ensued wherein it was suggested Mr. Barnes and Mr. Elliker pursue their complaint in a court of law.

The remainder of the applications on the agenda were reviewed and discussion occurred on the following: Nos. 1, 6-9, 12, 15, 18-19, 23-28, 30-31, 35-37, 41-45, 47, 49-50, 54-58, 60, 67-68, 72, 76, 78-82, 84-86, 101, 106-107, 110-111, and 113. Agenda: Nos. 1, 6, 8-11, 18, and 20-21.

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

EXECUTIVE SESSION

DISCUSSION - POLICIES AND PROCEDURES - ONE TIME LIMIT INCREASE

Policy and procedures regarding the one time limit increase were distributed. Discussion ensued wherein changes were recommended. Procedures for ensuring compliance with any established conditions were discussed. The following was agreed upon: The approval would be valid for 60 days. If the bid date was delayed or if the project re-bid after that time, a new application would be required. Staff would follow-up with reminder letters to the licensee and general contractor or owner of the project. If necessary an investigation would be initiated.

MANAGEMENT FOLLOW-UP REPORT

Ms. Grein stated that many of the recommendations suggested in the Audit Report had been fully implemented, while others were in the process of being implemented. Dialogue then resulted.

INVESTIGATIONS STATUS REPORT

Conversation next turned to the number of pending complaints and the back log of open complaints. It was recommended that a usable, readable, trackable, monthly status report be prepared. The allegation phase was discussed, Ms. Grein was advised to change the process. The Executive Session was then continued to return to the scheduled Agenda.

APPLICATION HEARING

27 K (C21 – Refrigeration & Air Conditioning) APPLICATION HEARING

Jeffrey N. Ricketts, Partner, and Jonathan Nikolas Ricketts, Partner, were sworn in along with Kathy Stewart. The stipulation was signed and the notice of hearing was entered into the record as EXHIBIT 1.

The hearing was for possible violation of NRS 624.263, failure to meet the criteria for establishing financial responsibility; NRS 624.265, character of applicant; and NRS 624.3013 (2), misrepresentation.

Subsequent to the mailing of the notice of hearing the application had been amended from a partnership to a sole proprietorship with Jonathan Ricketts as the owner. The amended application was then entered into the record as EXHIBIT 2. A new financial statement had also been provided, however, it was for the partnership. The allegation of failure to establish good character had been based on the criminal background of Jeffrey Ricketts who was no longer a partner. The allegation of misrepresentation had been based on the original answer given to question 7 of the original application, relating to past due bills and judgments. The amended application had now been answered correctly. The allegation of failure to establish financial responsibility had been evidenced by a civil judgment filed May 14, 1998 against Jonathan Ricketts for $120 by Sparks Sanitation and information obtained from Jonathan Ricketts credit report. The outstanding accounts had been settled or paid in full and were contained in the payment agreements provided as a part of the amended application. The accountant had provided a letter of clarification.

Mr. Gregory pointed out the application hearing currently in session was for an application which had been withdrawn. It was suggested the amended application be reviewed as a new application.

A financial review then ensued.

JOHN C. BINNEWEG #13393 (B – General Building) - RENEWAL HEARING

John Binneweg, Owner, was sworn in along with Kathy Stewart and the stipulation was signed. The hearing was for possible violation of NRS 624.3013 (3), failure to establish financial responsibility at the time of renewal. The hearing notice was entered into the record as EXHIBIT 1.

The allegation of failure to establish financial responsibility at the time of renewal was evidenced by several things. The license had expired March 31, 1998. On September 11, 1998 Mr. Binneweg submitted an application for renewal. That had been scheduled for consideration by the Board as there were two money owing complaints pending. On October 8, 1998 the application for renewal had been denied. On July 2, 1998 Mr. Binneweg had filed a Chapter 11 bankruptcy. The complainants who had filed the money owing complaints were now creditors in the bankruptcy. They were Western Nevada Supply for $641 and J & L Windows for $204. The current status on the bankruptcy was it was awaiting a hearing for the plan of reorganization. The proposed plan of reorganization called for the sale of all real property and assets with the exception of Mr. Binneweg's personal residence. The proceeds from those sales would pay the creditors. The estimated proceeds were $154,000 after the secured creditors were satisfied. Those proceeds would then be used to pay the unsecured creditors an amount which totaled $99,250. The proposed plan called for payment to be within 22 months. Mr. Binneweg had been requested to provide a current financial statement. He had done so. The financial statement and a current credit report had been provided to the Board for review. EXHIBIT C of the notice of hearing was an objection to the renewal application which had been submitted by the Credit Manager of Western Nevada Supply.

A discussion occurred with Mr. Binneweg regarding the type of work he intended to perform; what he was currently doing with the homes he had built; a future project he intended to perform in Minden; why he did not renew the license on time; why he did not want to consider an auction at this time; and an estimated tax lien. Mr. Binneweg was asked if he had anyone who would or could indemnify the license. He said he probably could but he wanted to do it on his own if possible.

P & L LANDSCAPE & GARDENING (C10 – Landscape Contracting) - APPLICATION HEARING

Ms. Grein stated a request for continuance had been received and had been granted.

ADVISORY OPINIONS

CARSON CITY PURCHASING & CONTRACTS DEPARTMENT - Carson City Aquatic Facility Addition and Remodel, Contract #98-99 080.

This advisory opinion was not a contested matter. John Iratcabal, Carson City; John Sieben, President, American General; Ron Jacoboni, Tahoe Pool and Spa; Judy Jacoboni, Tahoe Pool and Spa, were present.

It was made clear at the outset the parties needed to be more specific in their request for an advisory. Mr. Gregory clarified: "Are you asking us if American General is licensed to bid this project as a general contractor?" Mr. Iratcabal said: "I am asking you if American General's license is sufficient or covers the construction of the therapeutic pool?" Mr. Gregory asked: "Did they bid the job as a general contractor?" Mr. Iratcabal answered yes, adding the job had been awarded by the Board of Supervisors contingent upon their acquiring a ruling from the Contractors' Board. Once again Mr. Gregory clarified: "You're asking me if American General can bid this facility? This project?" The entire project as a general contractor?" Mr. Iratcabal said: "Yes." Having established the question and the specific work involved, Mr. Gregory said the answer was yes. When asked if they could perform the work, Mr. Gregory said American General was a general contractor. The project consisted of a building, demolition of a building, remodeling of an existing structure, and an addition to an existing structure. Those things were all covered and could be performed and bid as a general contractor. The contractor could sub the work out to the appropriate trades as he saw fit or perform the work himself, including the swimming pool, if it was part of a building or structure. The contractor could not perform the plumbing, electrical, mechanical, or fire protection unless he held licenses for those trades. Mr. Gregory added the building department had the prerogative to narrow the spectrum if they chose to do so. Mr. Jacoboni then asked: "Can the B builder build the pool without hiring the appropriate subcontractor to do this work, which would be the A10?" Mr. Gregory replied: "According to the statute, if in fact, he is doing a project which is a B license holder's job, he can do it with his own forces or he can sub it out."

EMERGENCY SUMMARY SUSPENSION

J K LARSEN ENTERPRISES #27477 - SUMMARY SUSPENSION

Johnny Kim Larsen, President, was not present. Michael Bohn, Legal Counsel for J K Larsen Enterprises Inc. was present to represent the licensee.

Ms. Grein stated the financial statement had been requested and received but it was dated December 31, 1996. Mr. Bohn explained Mr. Larsen's accountant had sent a letter of explanation indicating his computer system had crashed and he needed to reconstruct Mr. Larsen's last two years of finances. It was then established the current limit on the license was $750,000. The 1996 financial statement did not support that license limit. In its last hearing the Board had requested a list of Mr. Larsen's current projects. There were no current projects. When asked why the licensee was not present, Mr. Bohn answered he was working but he did not know on what project. Mr. Bohn was informed that without a current financial statement there was a strong argument for a summary suspension.

EXECUTIVE SESSION (Continued)

PROFESSIONAL SERVICES AND LEGAL SERVICES

The Board was updated regarding the five proposals which had been sent to potential candidates to represent the State Contractors' Board in the upcoming 1999 Legislative Session. Three had been received. The candidates were Hillerby and Berengo, Pat Coward, and Harvey Wittemore.

Mr. Reese reported the Supreme Court had reversed the Board’s denial of the license application of Churchill County Telephone.

Ms. Grein said the proposed monthly amount to meet the budget forecast was $50,000.

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 3:01 p.m.

Respectfully Submitted,
Betty Wills, Recording Secretary
 

APPROVED:
Margi Grein, Executive Officer

Kim Gregory, Chairman