December 11, 2012

Board Members Present:

Paul Schiffino, Chair; Joan Hancock, Vice Chair; Mark Thurman, Secretary; David Dias; Matthew Kelly; Robert Lamb; Ed Lang; James Miller; Lisa Miller-Strunk; Bruce Rust; Frank Schetter; and Pastor Herrera Jr.

Board Members Absent:

John O'Rourke.

CHAIR'S REMARKS/BOARD MEMBER COMMENTS

There was a special acknowledgment to Sam Abdulaziz who is currently recovering from hip surgery. The CSLB gave him their best wishes.

Congratulations on the marriage of Karen Ollinger who is now known as Karen Robinson.

ENFORCEMENT COMMITTEE REPORT

ENFORCEMENT PROGRAM UPDATE

Nora Urias, an Investigator out of West Covina, told the story of her experience with her company car. She is even on a first name basis with Gus, the tow truck driver. There was a motion that the Board directed the staff to look into the automobile issue.

Vacancy Update

Vacancies have been slowly getting filled in the Enforcement division. There are three vacancies left.

Intake and Mediation Centers (IMC)

The Intake and Mediation Centers financial settlement amount for the 2012 calendar year is $6.8 million.

General Contractor Pays Big for Subcontractor's Damage

A homeowner's roof was damaged by the gunite subcontractor on a pool job. The general contractor wanted to make the repairs himself but the homeowner wanted their roofing contractor to make the repairs, which would cost $15,000. The CSLB helped to get the general contractor to pay for the repairs make by the homeowner's roofing contractor. The homeowner was very happy.

Painting the Wrong House is Costly

A painting contractor painted the interior of the wrong Fannie Mae property, after breaking into the home to get the work done. They did not cover the wood floor and ruined it. The new homeowner was ready to move in until it realized the home was broken into, the paint colors changed, and the flooring ruined. A $10,000 compensation was mediated to cover the cost of the damage.

Faulty Roof Results in Complete Refund

A new $22,000 roof falling apart after two winters caused this homeowner not to want to deal with the roofing contractor at all. Rather than go through a long process, the contractor refunded the entire amount. The homeowner found another roofing contractor to handle the job.

Complaints in the IMC

The Board has exceeded its goal of have 30% of licensee complaints with restitution paid to the financially injured parties.

The Board has almost met its goal to have 70 of licensee complaints disposed.

Investigation Centers (IC)

The financial settlement amount for the Investigation Centers for the 2012 calendar year is just over $3.4 million.

CSLB Staff Assists in Multiple Ventura County Arrests

Three people have been arrested who were selling false home improvement services by using telemarketers. They were usually targeting the elderly. They would have a "telemarketer" call pretending to be a legitimate construction company, if the estimate was rejected, they would wait a few days and have a new "telemarketer" from a "different" construction company call with a lower bid. They would do this up to five times even though each time shoddy work or no work at all was being done by one construction company with a revoked license.

Small Job Turns into Big Loss

A homeowner contracted to have their family room and kitchen remodeled. The contractor then talked them into more remodeling work and charged excessive amounts of money on change orders. Contractor immediately demolished the kitchen and stopped doing work until the homeowner paid. What was supposed to be a $36,000 turned out to be much higher and the homeowner ended up paying over $175,000 before refusing to pay more money. The case has been referred to an accusation for abandonment, poor workmanship, exceeding contract amount, excessive down payment, and costs exceeding the value of the work.

Successful Joint Effort with Local Law Enforcement

An unlicensed contractor has been ordered to trial on a case where he was charged with contracting without a license, grand theft, and elder abuse. The contractor contracted with the homeowner for an addition, was paid the deposit, only removed a tree and then left the job without coming back.

Orange County DDA Gets Conviction, Seeks $96,500 in Restitution

An unlicensed contractor has been charged for contracting without a license and illegal advertising. He has admitted to not having a license but stated that he did the work as a favor. During the first restitution hearing he stated that he was not willing to pay the money owed. A second restitution hearing has been scheduled.

SWIFT Highlights

Unlicensed Operator Gets Jail Time

The unlicensed contractor provided an estimate in a sting operation for installing a non-slip decking material. When caught, the contractor plead guilty to illegal contracting and advertising violations and was ordered to pay a $700.00 fine, serve 20 days in jail, and placed on probation for three years.

SWIFT Partnering in San Bernardino and Riverside Counties

This partnership has resulted in 69 disciplinary actions, twelve Stop Orders, and 10 Notices to Appear.

Training Update

The Enforcement division has continued their training curriculum for staff for the 2012 calendar year. There were 14 different training seminars/workshops and one more planned training workshop in December, 2012.

REVIEW AND APPROVAL OF MINIMUM PEACE OFFICER TRAINING REQUIREMENTS

Peace Officer Minimum Training Requirements

California police officers have to complete training that is established by the California Commission on Peace Officer Standards and Training (POST). CSLB peace officers have been required to go to a Specialized Investigator Basic Course Academy which has only been given at one institution. This course is going to be closed for the 2013 year and may be permanent.

While this course is unavailable, the CSLB must find alternative training for newly hired peace officer candidates. The other POST courses that are available to meet the minimum hourly requirements for peace officer training can be taken at various locations.

Review and Approval of Recommendation Regarding Minimum Peace Officer Training Requirements

The Enforcement Committee asks the Board to approve minimum training for peace officers as follows:

• After successful completion of a background investigation, candidates may be appointed as a CSLB peace officer upon successful completion of POST-approved PC832 training.
• Within the first year after appointment (i.e. during the probationary period), CSLB peace officers must successfully complete either the SIBC Academy, if available, or POST Module III training.
• Failure to complete these specified training requirements will result in removal from the peace officer position.

LETTER TO CONSUMERS WARNING OF POTENTIAL EMPLOYER STATUS

The CSLB receives about 20,000 complaints annually. Almost 30% of those complaints involve unlicensed operators and a fair number of those are made my consumers that repeatedly hire unlicensed operators in order to avoid paying the unlicensed operators for their services.

The Enforcement division is looking for Board approval on a letter to automatically be issued at the end of an investigation where a consumer complaint about an unlicensed operator. This letter would provide disposition of the case and warn consumers about their potential employer status when hiring unlicensed individuals.

PUBLIC AFFAIRS COMMITTEE REPORT

PUBLIC AFFAIRS PROGRAM UPDATE

Staffing Update

The Public Affairs Office is now fully staffed with six full-time positions, headed by Rick Lopes, Chief of Public Affairs.

General Information

There was a delegation from Singapore's Ministry of National Development and Building and Construction Authority that visited the CSLB headquarters. Singapore is trying to learn how to have the construction industry be more automated so that they can reduce the need for foreign workers. Singapore currently has a 0% unemployment rate and allows foreigners to come to their country to fill their demands.

Website Highlights

Website Assistance Project

To allow for timely posting to the CSLB website, the Public Affairs department has been working closely with the Information Technology staff to code press releases, industry bulletins, and many more items to the website.

Veterans Application Assistance Program

Public Affairs has been working on offering help to employees transitioning from military service to civilian employment. They have completed the first phase of having a new section for them in the Applicant section for the new "Veterans Application Assistance Program."

Application Instructional Video

Public Affairs has finished redesigning their webpage and adding a tutorial video that shows how to fill out the license application correctly.

Social Media

CSLB has been continuing to gain followers to the Facebook and Twitter pages. In addition, they have a YouTube page which includes videos of board meetings and sting operations.

Email Alert Feature

CSLB is continuing to grow their email subscriptions for their newsletters, press releases, consumer alerts, industry bulletins and public meeting notices and agendas.

Media Relations Highlights

Media Calls

From mid August to the end of November, 2012 Public Affairs has responded to 41 different media inquiries and has had interviews with newspapers, radio and television outlets.

News Releases

From the end of August to the end of November, 2012, Public Affairs has aggressively distributed seven news releases to publicize mostly their sting operations and enforcement actions.

Industry/Licensee Outreach Highlights

Licensee/Applicant Scam

There is a new scam aimed at current licensees and license applications where a company is posing as the CSLB and requesting money that is needed for a new exam, continuing education, or to renew a license. Public Affairs has been issuing Industry Alerts and will be including scam warning letters in the packet that is sent to applicants and license renewals. CSLB is working with federal, state and local law enforcement agencies.

Industry Bulletins

Since the last Board meeting, two new Industry Bulletins have been sent via email.

California Licensed Contractor Newsletter

The winter edition of this newsletter should be available online before the end of December. Previous versions are currently online.

Publication Highlights

CSLB has completed two publications, with several other publications currently with various offices before completing publication.

Community Outreach Highlights

Senior Scam Stopper Seminars

There has been an increase in interest for the Senior Scam Stopper seminars since promotional information was sent to legislators in September of 2011. Even though there has been restrictions on travel for these informative seminars, all travel exemptions that have been requested have been approved.

Speakers Bureau

CSLB speakers are continuing to be in demand. The most popular requests are for enforcement related topics.

Contractor Outreach Program

The contractor outreach program objective got Board approval on April 17, 2012.

Program Goal

The goals of the program are to provide licensees with tools they can use to educate consumers/potential clients; and to provide licensees with resources that will help ensure that they are aware of laws and best business practices. This should help to aid in the fight against unlicensed contractors and give the law-abiding licensees a more competitive business platform.

Approved Campaign Elements

• Conduct Research
  • Determine most wanted/needed materials
  • Determine best way to reach licensees
• Develop (update) Print/Web Materials
  • New consumer and contractor booklets
    • Formats optimized for printing CSLB website
    • Opportunity to add contractor name/license number on materials
• Consumer victim stories
• Develop Online Contractor Resource Center
  • Make resources available in a centralized website location
• Develop "State of California Licensed Contractor" logo
  • Use to promote "State-Licensed Contractor"
• Develop Videos
  • Contractor can embed on their own website
    • Focus on consumer education material
• Focus on communication with licensee (maybe monthly video highlights)
• Industry groups
• Monthly video noted above
• Other Web Elements
• Development of monthly topics
• Live Web chats
• Development of Opt-In "Find a Contractor" feature
• Site where consumers would go to find list of licensees
• Search either by location or license classification

Licensee Survey

There was a 14 question online survey that was promoted in July of 2012. The purpose was to help determine what type of educational materials licensees believed would be beneficial and to gauge interest in creating a logo that licensees could use to promote themselves as state-licensed. As of October 10, 2012, the survey has been taken 1,168 times.

Next Steps/Timeline

• Determine print materials to be created by December 2012
• Develop State of California Licensed Contractor logo by January 2013
• Build website feature to display new/updated materials by February 2013
• Launch new contractor resources on CSLB website by March 2013
• Determine other program elements by May 2013
• Determine if Outside Contracts are needed by June 2013

LEGISLATIVE COMMITTEE REPORT

LEGISLATIVE PROPOSALS TO AMEND THE BUSINESS AND PROFESSIONS CODE

The Board agreed on the concepts set forth in the following code sections, and the Legislative Committee will proceed with the amendments.

Illegal Use of License Information - B&P § 7027.3

This would allow the CSLB to take administrative actions for violations of the specified provisions in Business and Professions Code section 119. It would allow the CSLB to issue administrative citations regardless of if the district attorney pursues the violations.

Definition of Unlicensed Activity - B&P § 7031

This would allow CSLB staff to develop a proposal with language to address problems with licensed contractors entering into a contract with an entity that is not duly licensed.

License Qualifiers - B&P § 7068.1

This would amend the law to discipline qualifiers on licenses who fail to comply with supervision and control requirements, regardless of the harm or potential harm to consumers.

Arbitration - B&P § 7085.5

This would increase the clarity of the arbitration process for both homeowners and contractors and would be more in line with current case law and best practices.

Aiding and Abetting Unlicensed Activity - B&P § 7114

This would delete reference to Section 7099.

Delinquency Renewal Fee - B&P § 7141

This would establish a 30-day grace period for the delinquency fee for license renewal applications that originally are submitted timely but that require correction.

LICENSING COMMITTEE REPORT

LICENSING PROGRAM UPDATE

License Application Workload

The number of applications continues to decline because of the economic recession and housing downturn. The average number of original applications per month during Fiscal Year 2011/12 is down 8% from Fiscal Year 2010/11.

Limited Liability Companies

CSLB has implemented the new LLC program. Since there is no case law for LLC's yet, an additional $100,000 bond is required for the benefit of workers relative to payment of wages and fringe benefits. This is to ensure workers are protected despite the absence of case law dealing with LLC's. This bond is in addition to the $12,500 contractor bond. LLC's are also required to have $1,0000,000 in liability insurance when five or fewer persons are listed as personnel, with an additional $100,000 required for each additional personnel, not to exceed $5,000,000.

Through October 31, 2012, the CSLB has received 544 applications for LLC licenses. Of that, 155 contractor licenses have been issued. The most common reason for the rejections is being unable to confirm the LLC name with what the Secretary of State is able to provide since the Secretary of State has such a delayed processing time.

Fee Increase and Application Revisions

Eight applications have been revised to reflect new fees due to the fee increases. Some of the fee increases include the Application for Original Contractor License (20% increase), Application to Add a Supplemental Classification or to Replace RMO or RME on an Existing License (50% increase), Initial License Fee (20%), and Home Improvement Salesperson Registration Fee (50% increase) to name a few.

License Transaction Processing Times

CSLB's application and renewal processing schedule routinely has around two days of backlog because of cashiering and image-scanning tasks. Since the 2008-09 fiscal year, the Licensing division has only used a minimal amount of overtime compared to previous years, even with a reduction in staff hours due to furloughs. They have kept acceptable processing times which can be attributed to the decrease in applications.

Fingerprinting/Criminal Background Unit

Since fingerprinting and criminal background checks were implemented, CORI files received through October 31, 2012, the Criminal Background Unit denied 1,109 applications and issued 1,251 probationary licenses. 553 of the denied licenses appealed their denials. There has also been a decline in fingerprint submissions since there has been a decline in applications.

Licensing Information Center (LIC)

Call Center Workload

Call wait times decreased in the third quarter of 2012 by almost 5% compared to 2011. It is expected that the call volume will increase the beginning of each quarter due to workers' compensation insurance policy renewals.

Staffing Update

November saw that start of a new full-time Program Technician II in the call center. They hope to fill three call center vacancies and two front counter vacancies by January of 2013. Currently, they are utilizing two retired annuitants in the call center. The call center will continue looking for the most qualified Program Technician II's for the remaining vacancies.

The new Supervision Program Technician II started in June. Estela Gomez, is responsible for overseeing the call center and front counter.

Licensing also had four student assistants who provided support. The student assistants were eliminated August 30, 2012. With the extra help, call wait times were lowered.

Increased Training

One of the Licensing division's goals is to provide timely, efficient, and professional services to its customers. They have established a trainer position as an expert resource to other licensing staff. Training has proven to be an effective way to give the new employees an in-depth look at CSLB as a whole and the roles of the various units within it. July saw Board Orientation and Licensing Training for 30 new employees.

Call Center/LIC Processing

A call center processing e-mail address has been set up as a full-service resolution program for licensees who need their licenses updated to satisfy a suspension or to avoid suspension. In addition, the call center will soon cross-train with other units to increase their knowledge of policies and procedures.

Judgment Unit

The judgment Unit processes all outstanding liabilities, judgments, and payment of claims reported to the CSLB by licensees, consumers, attorneys, credit recovery firms, bonding companies, CSLB's Enforcement Division, and other governmental agencies as well as processing all documentation and correspondence related to resolving these issues.

TESTING DIVISION UPDATE

Examination Administration Unit

The Examination Administrative Unit administers the 45 tests of the CSLB at eight different locations. There have been at least 2,900 tests given each month.

Examination Administration Staffing

San Diego hired a test monitor for the testing center bringing them to two full-time staff.

Approval was finally given from the Department of Consumer Affairs to hire a Staff Services Manager to supervise the Examination Administration Unit. They are working on filling that position.

Training Center Status

There are eight testing centers - Sacramento, Oakland, San Jose, Fresno, Oxnard, Norwalk, San Bernardino, and San Diego. The Oakland testing center will soon be moving to Berkeley.

Examination Wait Time

The current wait time for examinations throughout the state is three weeks. However, applicants have a very good chance of obtaining a seat in any CSLB testing center on a walk-in basis.

Change to Examination Administration Procedures

The existing policy gives 2.5 hours for each examination and if more time is needed, an additional hour can be requested. The new policy will give all applicants the 3.5 hour window for each application.

Utilization of Testing Centers for Other Projects

Since there is a reduced number of licensing examinations being held, the use of the testing centers is being expanded for other purposes. Training on the new BreEZe software will be conducted twice a week for three weeks starting in January. The testing centers will also be used to administer the Enforcement Representative I examinations twice a year.

Examination Development Unit

The Examination Development Unit ensures 45 examinations are maintained and updated in accordance with testing standards, guidelines and regulations.

Examination Development Unit Staffing

There is still one vacant testing specialist position that may be reclassified because of workload changes, but they are planning on hiring someone as soon as the reclassification.

Occupational Analysis and Examination Development Workload

There are two phases in the development process: occupational analysis and new examination development. These must be done every five to seven years for each examination.

Occupational analysis has recently been completed for:

• C-34 Pipeline
• C-45 Signs
• C-50 Reinforcing Steel
• C-55 Water Conditioning
• C-57 Well Drilling

New examinations have been completed for:

• C-16 Fire Protection
• C-21 Building Moving and Demolition

Current occupations analyses in progress:

• C-5 Carpentry
• C-38 Refrigeration
• C-28 Lock & Security Equipment
• C-60 Welding

New Examinations in Progress

• C-34 Pipeline
• C-45 Signs
• C-50 Reinforcing Steel
• C-55 Water Conditioning
• C-57 Well Drilling
• C-42 Sanitation Systems
• C-46 Solar
• C-47 Manufactured Housing

Ongoing Consumer Satisfaction Survey

The Testing division conducts this survey of consumers whose complaint cases have been closed. This is designed to assess the overall satisfaction with the Enforcement division's handling of complaints in various content categories.

Examination Development Staff Work on DCA Projects

The Examination Development Unit is assisting the Department of Consumer Affairs Office of Professional Examination Services with two occupational analyses and one examination development project because they have experienced a staffing shortage.

BOARD POLICY ON ASBESTOS CERTIFICATION

The current issue is whether or not a licensed contractor that holds an asbestos certification can perform asbestos removal work in a classification that is not held by the contractor. This has come up because some licensed contractors with the asbestos certification have been operating outside of their classification when it comes to asbestos removal/abatement. As an example, a C-2 Insulation contractor performed asbestos removal that included the roof removal at a public school. It was discovered that there is a lack of understanding in the industry regarding the legal parameters of asbestos removal/abatement. The CSLB sought a legal opinion in this matter for the Board to review regarding the law's intent.

The asbestos certification is not a specialty classification itself, just a certification issued to a currently licensed contractor. This certification requires the licensee to pass an exam but there is no experience requirement. The certification is limited to asbestos-related work performed within the licensed classification held by the contractor. In order for the certification holder to be able to perform asbestos-related workout outside of their license classification would the certification would have to be a separate specialty class. Since it is not, the legal opinion stands that the asbestos certification was intended only to certify a licensed contractor's ability to perform such work exclusively within its licensed classification.

The staff recommends that the Board should adopt, as policy, that a licensed contractor who holds an asbestos certification and is registered by the Division of Occupational Safety and Health may perform asbestos-related work only in the license classification(s) for which it is licensed.

CONSTRUCTION MANAGEMENT EDUCATION ACCOUNT COMMITTEE PROPOSAL REGARDING GRANTS TO QUALIFYING PROGRAMS

The Registrar has sent out a "Notice of Intent" to award grants pursuant to the Construction Management Education Sponsorship Act of 1991. It is being submitted to the Board for approval. If approved this would issues grant awards in the amount of $149,996.34 to over 400 applicable graduates of CSU Chico, CSU Fresno, CSU Long Beach, CSU Sacramento and Cal Poly SLO.

EXECUTIVE COMMITTEE REPORT

ADMINISTRATION AND INFORMATION TECHNOLOGY UPDATE

Administrative Program Update

Personnel Update

As of November 27, 2012, there are 36 vacant positions at the CSLB.

Business Services Update

Space/Leasing Facilities

San Bernardino is undergoing remodeling for the addition of a Public Counter with bulletproof glass.

The Fresno office that housed SWIFT is still vacant, looking for a renter.

The Bakersfield office does not meet requirements and a new site is selected and being prepared to be moved into by January.

The Monterey office has been renewed until June of 2014.

The Oakland to Berkeley office relocation is ongoing. It is estimated that the move will be completed in three to four months, once the remodeling of the new Berkeley site is complete.

Contracts

• Purchased 10 new copiers with maintenance contracts
• Psychological screening exam interviews for peace officers
• Production of California Contractors License Law and Reference Book
• Purchasing new mail machines for all offices with rental and maintenance contracts
• Purchasing new chairs for all offices
• Security services for HQ office
• Shredding services for HQ and field offices
• Mail overnight delivery service

Information Technology Division Update

BreEZe

BreEZe will include e-payment/online licensure; licensing, enforcement and imaging functions; and workflow features once it is implemented. The "go-live" date has already been pushed back and fingers are crossed that it will occur in February of 2013.

Workers' Compensation Insurance

AB 397 indicates that at the time of a license renewal, an active contractors licensee with an exemption from workers' compensation insurance must have on file with the board to prove that exemption. This was originally set to become effective July 1, 2012, but was pushed to January 1, 2013.

Automated File Import Project

The Imaging and Workflow Automation System (IWAS) is responsible for creating and displaying electronic images of more than 300 specific documents types received or produced by the board. Hard copy documents are manually scanned and indexed to produce electronic images. About one-third of these document types now transfer automatically into the IWAS system. Nearly 495,000 documents have been automatically imported, allowing for large savings on applicable resource costs.

IT Staff Retirements, Departures and New Hires

A new Supervisor, Raju Sah, has been hired to oversee the Technical Support Unit, replacing Jason Piccione.

Although Debbe Phelps, the IT Programming Unit Supervisor, has retired, she will be returning as a retired annuitant because of the BreEZe project.

Debbie Brando, IT Lead Enforcement Programmer, has also retired and been replace my Michael Collins.

Debbie Buffalo, IT Service Desk staff member, is suddenly retiring in December. He replacement is currently being recruited.

Lead Imaging (IWAS) Programmer, Nancy Farnsworth, accepted a position with the Department of Consumer Affairs. She is currently sharing her time between both agencies while cross-training her replacement, Debbie Shaffer.

BUDGET UPDATE

Fiscal Year 2012-13 CSLB Budget and Expenditures

The CSLB spent $15.5 million, 26% of its Fiscal Year 2012-2013 final budget through September 30, 2012 (first quarter).

Revenue

The first quarter of Fiscal Year 2012-2013 saw revenue of $17.5 million.

Fund Condition

The Contractor's License Fund currently has about five months in reserves. However, the projected figures show only two months in reserve come the 2014-15 Fiscal Year.

Construction Management Education Account (CMEA) Final Fiscal Year 2011-12 Expenditures

Through September 30, 2012, CMEA spent about $3,400 in pro rata charges.

EMEA Fund Condition

The CMEA currently shows over 23 months of services but projects less than a 4 month reserve come the 2014-15 Fiscal Year.

Fiscal Year 2011-12 Fee Increase Revenue Impact

The renewal fee revenue increased by 12%, license application and initial licensing revenue increased by 5% compared to prior years. This is attributed to the fee increase effective July 1, 2011.

REVIEW OF TENTATIVE SCHEDULE

February 26, 2013, Bay Area

April 23-24, 2013, San Diego

June 11, 2013, Orange County

Abdulaziz, Grossbart & Rudman

provide this information as a service to its friends & clients and it does not establish an attorney-client relationship with the reader. This document is of a general nature and is not a substitute for legal advice. Since laws change frequently, contact an attorney before using this information.

Abdulaziz, Grossbart & Rudman

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