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Board Meeting Minutes — November 20, 2008

CALL TO ORDER

Board Chair James Miller called the meeting of the Contractors State License Board (CSLB) to order on November 20, 2008, at 9:00 a.m. in the O’Hare meeting room of the Westin Los Angeles Airport Hotel. A quorum was established.

Board Secretary Eddie Barnes led the Board in the Pledge of Allegiance.

Board Members Present: Board Members Absent:
James Miller, Chair   Robert Brown
Cynthia Mitchell, Vice Chair   Bernedette Medrano
Eddie Barnes, Secretary    
Joan Hancock    
Matthew Kelly    
Louise Kirkbride    
Robert Lamb    
Ed Lang    
Stephen Matich    
Lisa Miller-Strunk    
Bruce Rust    
     
CSLB Staff Present:
Stephen Sands, Registrar Karen Ollinger, Licensing
Denise Brown, Chief Deputy Registrar   Bob Porter, Testings
Doreathea Johnson, Legal Counsel (DCA)   Peter Sugar, Enforcement
Michael Brown, Legislature   Melanie Bedwell, Public Affairs
Jonathan Buttle, Budget Analyst   Maria Kennedy, Public Affairs
Amy Cox-O'Farrell, Info Technology   Pamela Mares, Public Affairs
David Fogt, Enforcement   Venus Stromberg, Public Affairs
Rick Lopes, Public Affairs   Jeanette Ayubi, Executive Office
CHAIR’S REMARKS AND BOARD MEMBER COMMENTS

Chair Miller recognized Department of Consumer Affairs (DCA) Director Carrie Lopez, and asked her to address the Board and audience. Director Lopez emphasized the solidification of consumer outreach during times of emergency and catastrophe. She commended CSLB on its response to recent wildfires. Her goal is to involve DCA and its related Boards and Commissions with the Office of Emergency Services (OES) for long term support and assistance for disaster victims statewide.

Board Secretary Barnes asked for DCA’s assistance in encouraging that relative information be shared through memorandums from Board to Board. Board Member Louise Kirkbride requested all Executive Officers and Board Members sit in on each other’s meetings. Director Lopez suggested individuals set an example.

Member Matich asked about the appointment of Board Members and how the Governor is proceeding with filling vacancies. Director Lopez advised that the Governor is focusing on Boards and Commissions that have quorum deficiencies first and then subsequent appointments will be reviewed as the schedule allows.

Chair Miller asked the Board and audience for self-introductions, during which Deputy Supervising Attorney General Karen Chappelle praised CSLB for its support and exceptional involvement.

Chair Miller asked Enforcement Chief David Fogt and Public Affairs Chief Rick Lopes to provide an update on the recent wildfires. Member Lang commended David Fogt for his instruction during the Summit workshop, "Inquire Before You Hire." David Fogt briefed the Board on CSLB’s increased expertise in responding to disasters. Mr. Fogt and Bureau of Insurance Chief John Standish have agreed to work together to ensure sufficient staff is on hand to not only assist victims, but to deter unscrupulous individuals to avoid further victimization.

Rick Lopes briefed the Board on the Public Affairs Office’s quick and effective coordination process with OES for distributing information to the public. Outreach will continue through the rebuilding process. CSLB has reduced the number of complaints through its increased efforts. Board Member Miller-Strunk inquired about the level of complaints now versus in prior years. David Fogt offered the Northridge earthquake as a basis of comparison, how through that experience, CSLB implemented proactive policies to assist consumers in making informed choices.

PUBLIC COMMENT SESSION

Patti Rascon, representing both Richard Rascon Electric and R&R Electric of the San Gabriel Valley, addressed the Board with concern about select businesses advertising as referral companies in the local yellow pages. Ms. Rascon discovered through contacting these companies personally that the consumer is advised that license information is provided at the time of the physical appointment. David Fogt responded that CSLB is aware of unlicensed entities advertising in directories where consumers seek out licensed contractors. Mr. Fogt reported that CSLB was able to obtain disconnect orders of phone lines on six (800) numbers on 10/6/08 through a Superior Court order related to a criminal investigation. Mr. Fogt conveyed that licensed contractors should have no affiliation with unlicensed entities, so, if they are receiving referrals through these services, this is in violation of CSLB practices. Ms. Rascon offered her home for future CSLB stings. Secretary Barnes brought up the seminar he attended during this summit which will assist in the cooperative efforts between CSLB and applicable district attorney offices in reporting such issues as Ms. Rascon presented.

APPROVAL OF THE SEPTEMBER 10, 2008 BOARD MEETING MINUTES
  • MOTION:  A motion was made by Board Member Ed Lang to approve the September 10, 2008 Board Meeting Minutes and seconded by Board Member Eddie Barnes.
    Motion was carried 10-0.

By special request, Item G Licensing Committee Report was moved to the top of the agenda for discussion. Board Member Joan Hancock arrived.

LICENSING COMMITTEE REPORT

Licensing Committee Chair Ed Lang presented an overview of the Licensing Committee report. Mr. Lang advised that Testing Chief Bob Porter is taking steps to rehire staff laid off as a result of the Governor’s Executive Order. Committee Chair Lang provided an update to Member Louise Kirkbride’s inquiry concerning the report on a $500 limit for unlicensed contractors, known in the trade as "handymen." A detailed report of the Licensing staff’s research and analysis on the subject is provided at the end of the section of this report. The issue will be placed on the agenda for future Licensing Committee meetings.

  • Approval of October 22, 2008 Licensing Committee Summary Report
    • MOTION:  A motion was made by Board Member Bob Lamb to approve the October 22, 2008 Licensing Committee Summary Report and seconded by Board Member Eddie Barnes. Motion was carried 11-0.
INDUSTRY UPDATE

Licensing Chief Karen Ollinger reviewed the detailed reports provided in the Licensing Summary report. Testing Chief Bob Porter highlighted the Testing Division’s progress to date. Mr. Porter then discussed CCR Section 832.46 -- Solar Contractor, a description of solar contractors and their classification as defined by CSLB, being offered for review and approval.

  • Review and Approval of Recommended Changes to California Code of Regulations Section 832.46 – Solar Contract
    • MOTION:  A motion was made by Board Member Eddie Barnes to approve CCR Section 832.46 and seconded by Board Member Bob Lamb. Motion was carried 11-0.

Member Cynthia Miller requested a list of the states available for reciprocity from the Licensing Committee Chair.

LEGISLATIVE COMMITTEE UPDATE

Update on Legislation

Legislative Committee Chair Stephen Matich provided an overview of legislation and CSLB’s positions. Committee Chair Matich briefed the outcome of ten recent legislative CSLB supported/sponsored items presented for approval to the legislature--five of ten passed. Also, seven legislative proposals were presented by the committee for review and approval by the Board.

Approval of November 6, 2008 Legislative Committee Summary Report

  • MOTION:  A motion was made by Board Member Bob Lamb to approve the November 6, 2008 Legislative Committee Summary Report and seconded by Board Member Matt Kelly. Motion was carried 11-0.

Review and Approval of Legislative Proposals

  • MOTION:  A motion was made by Board Member Eddie Barnes to approve the legislative proposals and seconded by Board Member Ed Lang. Motion was carried 11-0.

Committee Chair Matich offered for discussion the recently proposed legislation initiated by DCA pertaining to fingerprinting of all licensees in the state. Legislation Chief Michael Brown conveyed a comprehensive understanding of the proposal and cited various reasons why CSLB should choose an oppositional stance. Staff concerns were primarily focused on the implementation of the process with over 230,000 active licensees currently on record as not fingerprinted. Fingerprinting was initiated by CSLB in January 2005 for the principals of all new, renewal and reactivated licenses. Since CSLB licenses entities, as opposed to individuals, there are many existing licensee representatives (RMOs) who have no direct contact with the consumer, nullifying the effectiveness of the proposed legislation. CSLB believes the proposal should be amended to address the implementation issues that are unique to this Board and to request the proposal be discretionary. Registrar Sands clarified "discretionary" as it pertains to statutory mandates, i.e., the word "shall" replaced by "may" offers the Board to view the mandate’s necessity allowing discretion in its implementation.

Board Members Kirkbride, Lamb and Miller-Strunk brought forward several scenarios and debated how this pending legislation may affect contractors, consumers and CSLB. Chair Miller asked if analysis had been done to determine a reasonable timeline to implement policy, if enacted. DCA Legal Counsel Doreathea Johnson advised that the proposal is still under study. Mike Brown’s main concern is the possible introduction of the legislative proposal before the next Board meeting.

Board Members raised the point of misleading consumers since CSLB publicizes that fingerprinting and background checks are performed on contractors. Although CSLB performed fingerprinting and background checks on new licensees since 2005, we have not conducted the same on all existing contractors.

Industry representative Phil Vermeulen addressed the Board on the issue of who is to be fingerprinted since often the employee visiting the residence is not the representative fingerprinted on behalf of the company. Mr. Vermeulen was also concerned with why contractors that don’t have direct contact with the public, i.e., sewer contractors, are fingerprinted.

Rosario Duran of the Riverside County District Attorney’s office addressed the Board and audience concurring with CSLB Board comments regarding misleading the public through advertising that we fingerprint and run background checks on contractors. She feels strongly that we are currently misleading consumers.

California Alarm Association (CAA) President John Sargent addressed the Board. The CAA is regulated both by CSLB as well as the Bureau of Security and Investigative Services (BSIS.) BSIS has had its fingerprinting process implemented since 1973. A Livescan is performed on every CAA employee and submitted to the Department of Justice (DOJ); if a felony is identified, the alarm company is immediately notified. BSIS has an appeal process in place involving a governor-appointed disciplinary review board that provides recommendations made by its Board, based on information provided by the employee. It then makes a determination on the license.

Marion Hack, an attorney who represents contractors throughout the state, strongly feels the legislation for this fingerprinting proposal reference that a contractor’s license should not lapse during the fingerprinting process. She considers CCR Section 7031 "the death penalty" for contractors, since even a one day lapse subjects a contractor to disgorgement and they are unable to sue on contracts, which are often long term, multi-year commitments with millions of dollars at stake.

CSLB Board members continued to discuss the multitude of pros and cons with DCA’s proposed fingerprinting legislation. Concerns were mainly focused on public safety, ensuring the individuals actually entering consumer premises are being fingerprinted, and the estimated time it will take to complete the process.

Registrar Sands pointed out that when the fingerprinting process began for CSLB in 2005, it was initiated to control the economic fraud occurring by individuals with convictions that use false Social Security numbers to apply for licenses. Registrar Sands explained that CSLB currently has contractors who are on Megan’s List—CSLB can’t revoke these licenses since they are active in accordance with existing laws. Through the network of CSLB’s Enforcement program, statewide district attorney offices, industry associates and other contractors, when a contractor is arrested, CSLB generally receives notice. The intent of this new fingerprinting proposal is to allow Boards to establish a “tracking” system in the event of an arrest and follow through to conviction, and then make a determination on the license.

  • MOTION: A motion was made by Board Member Matt Kelly to approve CSLB staff’s recommendations and ask that they update the Board with developments. A second was made by Board Member Ed Lang. Board Member Bob Lamb asked to amend the motion to have CSLB’s Public Affairs Office review and advise whether or not we should continue advertising the fact that contractors are fingerprinted. The maker of the motion accepted the amendment and Board Member Ed Lang seconded. Motion was carried 11-0.

Chair Matich asked that the Legislative report be concluded.

Registrar Sands asked Chair Miller to recognize DCA’s Chief Deputy Director Scott Reid to address the Board and audience. Mr. Reid shared his viewpoints on DCA’s fingerprinting proposal.

DCA’s Deputy Director of Consumer Community Empowerment division Mary Rosas introduced herself and shared her goals towards building alliances between consumers and government agencies.

Board Member Louise Kirkbride left the meeting for prior commitments.

ENFORCEMENT COMMITTEE REPORT

Enforcement Committee Chair Bob Lamb gave an overview of the Enforcement Committee Report.

  • Approval of October 22, 2008 Enforcement Committee Summary Report
    • MOTION: A motion was made by Board Member Matt Kelly to approve the October 22, 2008 Enforcement Committee Summary Report and seconded by Joan Hancock. Motion was carried 10-0.

Enforcement Program Update

Enforcement Chief David Fogt presented the Enforcement Division update. Mr. Fogt acknowledged some of the investigations that have occurred and the benefit in having Skip Jones, an internal forensic auditor, on staff to review the records on open cases and refer them to the local applicable state prosecutors.

CSLB is now able to publicly disclose some complaints before taking action, which provides the ability to determine if a complaint may result in suspension or revocation of a license. CSLB is able to publicly disclose such complaints, which serves as a consumer protection tool. Board Member Barnes suggested Mr. Fogt contact other enforcement agencies to reflect industry-related problems on licensee profiles listed on CSLB’s Web site. Mr. Fogt referred to the numerous Memorandums of Understanding (MOU) recently established with various state agencies to avoid the duplication of investigative efforts.

As a result of CSLB’s partnering with the construction industry, Mr. Fogt stated that CSLB has realized successful productivity through proactive enforcement during the months of September and October. CSLB continues to network and reach out to industry-related contacts to improve partnerships. Mr. Fogt detailed the Public Works meeting held at CSLB on October 29, 2008, and the integral role CSLB’s Web site plays in providing information about contractors considered for the different projects awarded by the Public Works committee.

Mr. Fogt referred to the enforcement of implementing SB 1362 to ensure C-10 Electrical contractors are adhering to the new law when it goes into effect July 1, 2009. Richard Markeson, Western Electrical Contractors, addressed the Board and audience, expressing appreciation to Mike Brown and David Fogt in CSLB’s commitment in using progressive discipline to ensure electrical contractors’ compliance with this new law.

Committee Chair Lamb introduced Organizational Development Chief Peter Sugar for an update on staff development. Mr. Sugar advised the Board on the four existing organizational development projects: Staff Development, the Central Valley SWIFT office, our Model Office program and Future Training. With regard to Staff Development—DCA, with the assistance of the Center for Organizational Effectiveness (an outside vendor), has developed a management academy for DCA’s Boards and Bureaus to train supervisors and managers to succeed outgoing management as a result of a large base of retirees expected from the "baby boomer" work force.

The new Central Valley SWIFT office had been delayed as a result of the Executive Order, but is back on track with site locations identified and potential candidates slated to be interviewed to supervise the location.

West Covina, the Model Office, has held several meetings to discuss "best practices" to incorporate into the Model Office. Successful applications will be implemented into other offices. An orientation was held at CSLB headquarters for the West Covina office staff, another for the Sacramento North Investigation Center was held in September and the San Bernadino office staff will visit in December 2008.

A curriculum for additional training for most Enforcement classifications has been prepared. Resources to provide this training are being identified, budget opportunities and limitations examined, and scheduling and priorities are being reviewed. The Council on Licensure, Enforcement and Regulation (CLEAR), offers a national certified investigative training program that incorporates many of the training courses identified in our curriculum, i.e., Principles of Administrative Law, The Regulatory Process, Investigative Process, Principles of Evidence, Evidence Collection, Interviewing Techniques and Report Writing. CSLB is currently working with CLEAR to schedule two 3-day sessions for this training, one in Sacramento and one in Los Angeles. Each of these sessions will have between 60-70 CSLB employees comprised of Enforcement and CSR classification staff. CSRs have become a major recruiting source for entry into the Enforcement Representative classified staff. This approach is economically sound and provides us with a trained pool for future enforcement vacancies.

Board Member Lamb concluded the Enforcement Committee Report.

Board Member Cindy Mitchell suggested we organize meetings with trade associations prior to the upcoming April 2009 Strategic Planning Conference. Committee Chair Lamb concurred and will address this topic with the Enforcement staff.

A break was called. The Board Meeting reconvened with the Public Affairs Update.

PUBLIC AFFAIRS COMMITTEE REPORT

In the absence of Committee Chair Bob Brown, Public Affairs Chief Rick Lopes offered an overview of the Public Affairs Committee Report.

  • Approval of October 22, 2008 Public Affairs Committee Summary Report
    • MOTION: A motion was made by Board Member Bob Lamb to approve the October 22, 2008 Public Affairs Committee Summary Report and seconded by Board Member Eddie Barnes. Motion was carried 10-0.

Public Affairs Program Update

Public Affairs Chief Rick Lopes presented the program update. Mr. Lopes briefed the Board on the success of recent sting operations, Senior Scam Stoppers as well as the Industry Bulletins program and "Ask the Board" newspaper columns. In addition, focus groups will be scheduled for the beginning of 2009 in conjunction with the advertising campaign designed with ASTONE/Crocker/Flanagan. Plans scheduled to commemorate CSLB’s 80th anniversary in 2009 were reviewed.

EXECUTIVE COMMITTEE REPORT

Executive Committee Chair Jim Miller asked Chief Deputy Registrar Denise Brown to update the Board.

  • Approval of November 6, 2008 Executive Committee Summary Report
    • MOTION: A motion was made by Board Member Bob Lamb to approve the November 6, 2008 Executive Committee Summary Report and seconded by Board Member Eddie Barnes. Motion was carried 10-0.

Administrative and Information Technology Program Updates

Chief Deputy Registrar Denise Brown reported that various exams are in progress over the next year or so for Enforcement Reps I, II and supervisor, along with replacement of the Chief Deputy Registrar. CSLB has been provided delegation by DCA allowing more control over the personnel transactions allowing specified exams at the Board level to include Enforcement representatives and supervisors. Since the lift of the Executive Order, vacancies referred to in the report will be filled expediently.

Relocation of the Fresno office is on schedule for April 2010, and the new Oxnard location has been selected. All site locations are designed to enhance our testing sites and Enforcement field offices. Use of the San Diego site is month-to-month, and the Santa Rosa site location will be established by May 2009.

Chief of Information Technology, Amy Cox-O’Farrell, reported that CSLB’s telephone "on-hold" music contract was terminated as a result of the Executive Order; however, the vendor continues to provide the service.

Web conversion to the State’s new "look" is completed. Licensing, Public Affairs and IT are working together to facilitate the license "look-up" to be more prominent on the home page. IT is working on a new machine to enhance the information of the pocket and Home Improvement Salesman cards to provide a photo ID. IT is currently working on a new system for the Imaging Work Flow system to store images from a physical jukebox to magnetic medium. Infrastructure for the new Disaster Recovery site planned for the Fresno location is being established and will serve as a duplicate site for CSLB Headquarter IT services.

>Budget Update

CSLB Budget Analyst Jonathan Buttle advised the Board that CSLB has encumbered $15.2 million of its budget, the 2008/09 approved budget being $58.9 million as included in the state Budget Bill. There are adjustments through the end of the year, which will be reflected in upcoming monthly reports. CSLB has collected $16.6 million in revenue, reflecting a 12.8% increase over the prior year with consideration to its being at the "high end" of the two year bi-annual renewal cycle.

With respect to CSLB Fund Condition, at the end of 2007-08, CSLB reverted a $35.6 million expenditure; projecting to 2011-12 at current rates of expenditure and revenue collection. CSLB may realize a deficit of $320,000. The Board should bear in mind that CSLB expends its budget and only collects its amount of revenue on this fund condition, which involves a $10 million fund loan resulting from the 2008 Budget Bill. An official repayment for this fund loan does not exist; however, CSLB staff is working with DCA’s Department of Finance to ensure timely repayment of the loan. DCA has gone on record to commit that it will not allow CSLB to "go into the red" as a result of the loan.

CSLB submitted the 2009/10 Budget Change Proposal (BCP) that would authorize grants out of the Construction Management Education account. DCA’s Department of Finance has approved this BCP for inclusion in next year’s Governor’s budget proposal. The BCP was approved at $150,000 in grants, which does not reflect the full amount requested, but amounts to more than was anticipated.

Registrar Sands introduced, Alfredo Terrazas, Attorney General Senior Assistant Attorney General for the Licensing Litigation Section, who commended the Board on its accomplishments.

2008-2009 Strategic Plan Update

Registrar Steve Sands asked each Division Chief (Administration, Enforcement, Legislation, Licensing and Public Affairs) to update the Board regarding the Strategic Plan for their respective division.

Review of Tentative Schedule

Registrar Steve Sands announced that the next CSLB Board Meeting will be held at the Hotel del Coronado on February 11, 2009. April and June Board meetings were discussed. It was tentatively decided to hold a Board meeting in Sacramento in August/September and another in Fresno in November 2009.

Meeting Adjourned

The Board Meeting adjourned at 12:10 p.m.

 

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