The Contractors’ State License Board held a full Board Meeting on Thursday, February 7, 2008, in San Jose, California.   

The following Board Members were present: 

Chair, James Miller; Vice Chair, Donald Zampa; Secretary, Cynthia Mitchell; Board Members Edward “Eddie” Barnes; Joan Hancock; Louise Kirkbride; Ed Lang; Stephen Matich; Bernedette Medrano; Lisa Miller; John O’Rourke. 

Board Members that were absent were: 

Robert Brown; Matthew Kelly; and Robert Lamb.  

There is one vacant position on the Board. 

I.          CHAIR’S REMARKS AND BOARD MEMBER COMMENTS 

The Board welcomed two new Board Members. 

II.                PUBLIC COMMENT SESSION 

There were no Public Comments. 

III.             REVIEW AND APPROVAL OF BOARD MEETING MINUTES 

The minutes of the November 1, 2007, Board Meeting were reviewed and approved.   

IV.              INDUSTRY UPDATE 

1.                  The Board initiated a new information sharing agenda item at its November 1, 2007, meeting in San Diego, called Industry Update.  The following people were invited to speak to the Board: 

                                          a.                        Larry Rohlfes, Assistant Executive Director of the California Landscape Contractors Association.  He was recognized for his efforts in collaborating with the Board on licensing and enforcement.   

Larry gave a great presentation on what his association does and what they believe other construction associations should do.  One of the most novel ideas is to make a chapter activity out of how the chapter can deal with unlicensed contractors. 

                                          b.                        Maretta Ward is a Deputy Attorney General in the San Francisco office.  She is an expert in bankruptcy as well as being a key prosecutor of contractor cases for the CSLB.  She was invited to speak to the Board but was unavailable.  She will speak soon. 

                                           c.                        David Shue is the Enforcement Supervisor of the San Francisco Investigative Center.  Mr. Shue explained how individual investigative centers work with local Attorney General Offices.  Mr. Shue is famous for his legal actions, being an outstanding supervisor, and writes great papers.  

V.                 CLOSED SESSION – PENDING LITIGATION 

1.                  There was a closed session dealing with pending litigation.  This is litigation between Kimstaff HR v. Department of Consumer Affairs, CSLB, Registrar Steve Sands, and others.  The closed session was moved to the end of the agenda so as not to delay the audience.   

VI.              LEGISLATIVE COMMITTEE REPORT 

1.                  There is a deadline of February 22, 2008.  It is the last day for bills to be introduced.   

2.                  Steve Matich and Mike Brown gave the Legislative Committee Report.  There were some Legislative proposals that do not yet have an author.  Those are: 

                                          a.                        Greater access to proceeds of license bonds by consumers in Small Claims Court. 

                                          b.                        Extending the time frame by which consumers may file a claim against the license bond under specified circumstances. 

                                           c.                        Easier consumer access to the bond proceeds for specified reasons (construction of single family dwellings; attorney costs for removal of an unenforceable mechanic’s lien). 

These proposals have been submitted to Senator Steinberg for his consideration. 

3.                  Other matters suggested by the CSLB: 

                                          a.                        To increase the threshold relative to cases that are eligible for Voluntary Arbitration through the Contractors' State License Board from $50,000.00 to $100,000.00.  This proposal was submitted to Senator Padilla and Assembly Member Nakanishi for consideration.   

                                          b.                        Amending the Penal Code dealing with diversion of funds.  This has been scrapped because of concerns by the California District Attorneys Association. 

                                           c.                        Owner/Builder Permits – Identifying Risks Associated with Contracting with Unlicensed Contractors.  The Board has been working with CALBO to finalize language for this proposal.  The CALBO Board recently agreed to co-sponsor the legislation. 

4.                  Two Year Bills 

                                          a.                        SB 237 (Mechanic’s Liens) has been dropped.  No compromise could be reached. 

                                          b.                        AB 455 (Votes Required for Board Action).  This is a SNAFU and has been dropped. 

                                           c.                        AB 456 (Construction Management Education Account).  This is a Board sponsored bill.  It would provide that this be an annual budget item subject to review by the Legislature. 

                                          d.                        SB 355 (Contractors: Consultants). This defines the term “contractor” to include a person who directs and controls contractors’ schedules or other activity essential to the completion of a construction project. 

                                          e.                        SB 569 (Public Works: Prevailing Wage Payments: Payroll Records).  This requires the public entity awarding a contract with construction costs above a specified amount to report to the Contractors' State License Board, the name and license number of each contractor and subcontractor on the project and the name and location and identification number of the project.  It also specifies that contractors and subcontractors are jointly and severally liable for damages awarded in an action to enforce the laws regulating public works contracts, including prevailing wages. 

VII.           ENFORCEMENT COMMITTEE REPORT 

Much of this report is statistical in nature.  The Committee Chair, Ed Lang and Chief of Enforcement, David Fogt reported.   

Generally, complaint handling has been done very well and results have gone to an all time high.   

1.                  December 2007 Statistics: 

                                          a.                        Complaint Handling.

The pending complaints caseload has increased from a low in June 2007, yet the statewide caseload remains at a manageable level.   

                                          b.                        Aged Complaints.

The number of complaints aged over 207 days old is 175, which is over the CSLB’s established goals of keeping that number under 100.  Complaints aged over 60 days have increased from a low in 2007 of 59 to 190 in December of 2007.  However, this increase was similar to what was observed to last year at this time.   

                                           c.                        Enforcement Representatives.

Enforcement representatives production continues to exceed the weighted average of ten complaint closures per person, per month. 

                                          d.                        Percentage of Licensee Cases Closed as Settled.

Enforcement exceeded the established goals of settling 30% of licensee complaints.  However, we personally have run into a higher level of problems recently.   

                                          e.                        Small Claims. 

One of the things discussed by Mr. Fogt was referring complainants to Small Clams Court.  As a result of the amount of complaints handled by the CSLB, they have generally been referring complainants to Small Claims Court rather than handling it themselves.  Some of the staff thought that it might be worthwhile to actually handle those cases themselves.  They are not ready to do that at this time.  However, they are going to try to settle matters they would normally refer to “Small Claims Courts” to a lesser extent, and if the matter did not settle, then they would refer them to Small Clams Court. 

                                            f.                        Attorney General Costs.

The average monthly cost for the Attorney General was $325,000.  The monthly average for fiscal year 2006/2007 was $389,000. 

2.                  Internal Audit Summaries 

                                          a.                        Intake and Mediation and Investigative Centers Audit Summary.

The internal audit of the Intake and Mediation Centers has been completed.  Although some of the areas where staff needed improvement were identified, the majority of the recommendations can be addressed by training the staff.  To that end, Deputy Attorney Generals, Mike Franklin and Marc Greenbaum, have developed a training plan and are scheduled to provide training to all enforcement staff during February and March.   

Further, the Enforcement Division has been very flexible in allowing their staff to perform work outside of the traditional office environment.  This practice is proving to be detrimental due to lack of interaction and access.  Managers and supervisors have been advised to review the current program.   

                                          a.                        The Statewide Investigative Fraud Team (SWIFT) Audit Summary.

SWIFT has been very successful in the areas of stings and sweeps.  However, some improvement is appropriate in responding to leads.  Criteria will be developed for the staff.  The Enforcement Committee will be asked to review and prioritize proactive workloads.   

2.                  Partnering with Local Prosecutors 

                                          a.                        Los Angeles City Attorney “Fast Track Program”.

The Los Angeles City Attorney’s Office entered into an agreement with the Los Angeles County District Attorney’s Office.  The Los Angeles City Attorney’s Office will prosecute misdemeanors and the District Attorney’s will prosecute felonies.  The gist of the program targets unlicensed activity.  The pilot program has exceeded expectations. 

                                          b.                        Ventura County District Attorney.

The Enforcement Division has developed an excellent working relationship with the Ventura County District Attorney’s Office.  More illegal and unlicensed contractors are being convicted in that county than ever before.  There has been an increased number of CSLB criminal cases handled.   

3.                  Proactive Enforcement Activities. 

SWIFT shattered all previous records for proactive enforcement activities and results.  The Northern and Southern SWIFT units conducted a total of 51 stings and 60 sweeps and broke the 1,000 mark for legal actions.   

4.                  Wildfire Response.   

Most of you should know by now that California had one of natures most devastating catastrophes in various wildfires in the year 2007.  CSLB staff responded to all of the emergencies.  They provided proactive assistance in enforcement, educating affected homeowners, and establishing effective partnerships with relevant local, state and federal agencies to bring help to the victims.  The outreach and proactive enforcement has proven very helpful.  This included the following wildfires:   

                                          a.                        Northern SWIFT: Angora Wildfire Response  

                                          b.                        Southern California Wildfire Response  

                                           c.                        San Bernardino County  

                                          d.                        Malibu

5.                  Proposed Strategy to Combat Illegal Print Ads 

In that illegal print ads pose a problem for contractors and consumers by unlicensed individuals placing ads in print advertisements and publications, such as the Penny Saver, Craigslist.org, and others, the Enforcement Division has started preparing a proposal to address those illegal operators.  Further, not all illegal print ads are placed by unlicensed contractors.  The strategy is under development.   

6.                  Significant Investigations 

                                          a.                        Repeat Offender Nguyen Arrested after Tip from Centex Homes

The Sacramento County District Attorney’s Office is handling that. 

                                          b.                        Fugitive Contractor Arrested in Kansas

This provided an Order of Restitution to three victims totaling almost $135,000.   

                                           c.                        Revoked Licensee Arrested in Oregon: Extradited to California

One of the issues was that he abandoned the job and left the homeowner with a $30,000.00 lien from a subcontractor. 

7.                  Convictions 

                                           a.                        Unlicensed HVAC Contractor Pleads Guilty to Felony Theft 

                                          b.                        Unlicensed Contractor Ordered to Pay Victim over $400,000. 

                                           c.                        Monaco Sentenced to Nine Months in Jail

 

8.                  Service and Repair Task Force 

On December 20, 2007, Enforcement Chief, David Fogt, announced the implementation of a new task force dedicated to combating predatory service and repair companies.  It is to be called “Service and Repair Criminal Investigation Task Force”.  The task force is headed by Pete Tuminia.  

Registrar Sands introduced Pete Tuminia.  He is a retired annuitant and has a great deal of experience with respect to enforcement, supervision, and structuring units.  He has had a great deal of military experience as well.  He has been on board for approximately 18 days. 

Most everyone in the audience was delighted with his understanding of the problem.  He is going to try and unite a number of agencies and people in enforcement in the agencies, to try to combat the underground economy and help with consumer protection.  As stated, he is trying to reach out and partner with other agencies, including the Attorney General’s offices, consumer law offices, and any other agency that you can think of that might help in combating this problem which appears to be very significant.

II.                LICENSING COMMITTEE REPORT 

1.                  Licensing Program Update 

Edward Barnes and Denise Brown reported. 

The average number of applications received per month increased substantially through 2004/2005.  Since then, it has pretty much been level. 

The License Transaction Processing Times has been helped by temporary help and redirection of staff. 

2.                  Fingerprinting/Criminal Background Unit Update 

Since the fingerprinting program began in January 2005, the CSLB has received more than 133,000 transmittals from the Department of Justice.  The Department of Justice is where the information is derived dealing with the criminal background checks.  The CSLB received this information for more than 20,000 applicants.  The Criminal Background Unit denied 726 applications and issued 328 probationary licenses.   

3.                  Applications by fiscal year.   

This includes original applications, adding classifications, replacing the qualifier, home improvement salesperson, and officer changes.  Starting in the 2000/2001, the disposition has increased through 2005/2006.  It reduced slightly in 2006/2007.   

4.                  Test Center Status 

Bob Porter reported. 

The Examination Development Unit is fully staffed.   

The examination waiting time at all test centers other than San Bernardino is three to five weeks.  However, for San Bernardino, it is 19 to 20 weeks.  The new Norwalk test center opened in December with 59 seats.  However, applicants are permitted to walk in at all test centers and have a chance of getting an empty seat due to failure of an applicant showing up.   

The new test administration system, SCORE, developed in-house by the Testing Division staff has successfully been implemented by all of the CSLB’s eight testing centers.  Everyone is happy with SCORE.  Other agencies are now looking at this program. 

5.                  Test Questions 

A report of the life cycle of test questions was given by Heidi Licencer-Hill, PhD. 

                                           a.                        Start With Test Question Then Perform the Following: 

i.                     Occupational Analysis

ii.                   Test Plan

iii.                  Item writing

iv.                 Item review by another group

v.                   Passing score

vi.                 Construct the examination

vii.                Construction administration

viii.              Item analysis 

The passing score is the toughest to define.  They try to get people with licenses with limited knowledge and superstars to provide a good sample. 

III.             COMMUNICATION & EDUCATION COMMITTEE REPORT -- PUBLIC AFFAIRS UPDATE 

Rick Lopes reported.   

1.                  The Public Affairs office continues its policy to aggressively distribute releases to the media.  Especially to publicize enforcement actions and undercover sting operations.  Six press releases were distributed between November 27, 2007, and January 25, 2008.  Numerous other press events took place.  The public affairs office distributed three industry bulletins between November 1, 2007, to January 25, 2008.  Between November 1, 2007, and January 25, 2008, the media staff responded to more than 50 separate media inquiries and provided interviews to a variety of newspaper, radio, and television outlets.  Rick Lopes appeared on NBC’s Today Show in October to discuss the dangers of hiring unlicensed contractors.  A Most Wanted feature on the CSLB website includes the most egregious unlicensed operators, all of whom have open arrest warrants.  The Public Relations Office is in the process of judging submissions for new advertising/public relations contract.  It is scheduled to be awarded February 25, 2008.   

IV.              EXECUTIVE COMMITTEE REPORT 

1.                  Administrative Program Update.  

As of January 22, 2008, there were 21 vacant positions at the Board.  Of the total, 12 were in Enforcement and one was in Licensing.   

                                           a.                        Budget Briefing 

The CSLB has spent or encumbered $27.9 million, roughly 48.7% of its budget.  This is for the fiscal year 2007/2008, with a net appropriation of $57.4 million.   

2.                  Information Technology Program Update.   

                                           a.                        Automated Complaint Form 

The CSLB implemented an online complaint form which is accessible on its website.  The complaint can be submitted online to the CSLB or it can be printed and mailed.   

                                          b.                        Licensing – On-Line Licensing Services

The iLicensing system will provide on-line (Internet) services, which will allow electronic filing of the original application, renewal applications, payment of fees, and address changes for licensees and applicants.  The implementation date for full implementation is now January 2010. 

                                           c.                        Review and Approval of 2008 Board Member Administrative Procedure Manual 

This was approved February 2008. 

                                          d.                        Review of Status of 2007 Strategic Plan Objectives 

The Strategic Plan for the CSLB was also approved.  Essentially it provides for ongoing responsibilities and objectives.  

V.                 REVIEW OF TENTATIVE SCHEDULE 

The tentative schedule for Board Meetings for 2008 are: 

            April 23, 2008 – Monterey  

June 19, 2008 -- Includes the Annual Election of Officers.   

Committee Meetings will be scheduled by Committee Chairs.