February 7, 2012

CSLB Highlights 2/7/12


FEBRUARY 7, 2012







The Contractors' State License Board held a Board meeting at the Dolce Hayes Mansion in San Jose on February 7, 2012.


Board Members Present:

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


Board Members Absent:

Robert Brown and John O'Rourke.


There are currently no vacant positions on the Board.




Robert Lamb presented Amy Cox O'Farrell with a plaque recognizing her hard work for the CSLB. Amy will continue to assist the CSLB but is moving on to a new job.



A homeowner spoke about her experience with the CSLB arbitration program. The homeowner was unhappy with some of the experience and gave the Board suggestions which they will be looking into.


Status of Legislative Proposals for the Upcoming Legislative Session


Amendment to Business and Profession Code section 7011.4 - Notice to Appear Authority


SWIFT (Statewide Investigative Fraud Team) was established in 1989. Business and Professions Code section 7011.4 currently gives SWIFT Enforcement Representatives the ability to refer investigations to local prosecutors for misdemeanor violations of law by issuing Notice to Appear citations. One of the problems is that the majority of the consumer complaints received each year is by the Investigative Center investigators who do not have authority to issue Notice to Appear citations. Therefore, CSLB wants to modify section 7011.4 to give authority to CSLB investigators assigned to the Investigative Centers that have completed Basic Peace Officer Standards Training to work with local prosecutors by issuing Notice to Appears and Stop Orders to unlicensed and uninsured contractors. This bill is going forward and it will be combined with Section 7106.5 discussed below.


Amendment to Business and Professions Code section 7011.8 - False Complaints Against Contractors


Business and Professions Code section 7011.8 currently provides that a person who files a false complaint with the CSLB is guilty of an infraction and the CSLB can notify the district attorney or city attorney. However, this has never been pursued since it is an infraction and prosecutors file criminal complaints for misdemeanor and felony violations, not infractions. Since this bill was enacted in 1992 the CSLB referred one case to a district attorney and the district attorney advised the CSLB that criminal filings for infractions are not handled by prosecutors. Therefore, the CSLB wants to change the language in the code sections to replace "an infraction punishable by a fine not to exceed one thousand dollars" with "the registrar may issue a citation to a person subject to licensure by this chapter." This will give the Registrar the ability to take administrative action. This bill is going forward.


Amendment to Business and Professions Code section 7026.1 - Unlicensed Construction Consultants


On April 24, 2008, Precedential Decision No.1 established that someone acting in the capacity of a construction manager was not required to be licensed as a contractor. Then in March of 2009, the Fifth Day v. Bolotin decision undermined the Precedential Decision. Recently there was an unlicensed contractor that was facing criminal prosecution for violating Business and Professions Code section 7028. He claimed he was a project coordinator and asserted exemption from licensure citing the Fifth Day v. Bolotin decision. Ultimately there was a plea bargain, but the CSLB is concerned. It is for this reason that the CSLB wants to amend Business and Professions Code section 7026.1 to specify that the term "contractor" includes any person not employed by a licensed contractor who acts as a construction manager, project manager or project coordinator. This bill will be going forward with slight changes to the language.


Amendment to Business and Professions Code section 7026.1 - Rental Equipment Providers


Both licensed and unlicensed contractors are constantly trying to circumvent the Contractors' License Law and the Public Contract Code by stating they are not subject to licensure as contractors because they are "Renters of Operated Equipment." The public's protection is compromised in both public and private works. Therefore, the CSLB would like to amend the code to define licensing requirements for businesses that provide equipment and operators for works of improvement. The CSLB is currently holding off on this. The staff will be working on this more.


Amendment to Business and Professions Code section 7076 - Events Resulting in Cancellation of a License


This appears to be some clean-up language that the CSLB would like to take care of. They believe that it is just a typo that has been in place since this section was added. The CSLB would like to change Business and Professions Code section 7076 (e) to replace "death" with "disassociation" so that when the section is referring to a continuance, the document should be received within 90 days of the disassociation as opposed to death, since section (e) refers to disassociation of a partner and section (d) refers to death of a partner. This bill is going forward.


Amendment to Business and Professions Code section 7106.5 - Effect of Expiration or Suspension of License on Jurisdiction of Registrar


Business and Professions Code section 7106.5 gives the Registrar the right to proceed with investigation of a complaint even though the license has been expired, cancelled, forfeited, or suspended by operation of law, or voluntarily surrendered. However, it does not allow for pursuing an Accusation to revoke the license when the license has already been revoked by operation of law. Since the CSLB does not have clear authority to file an Accusation when the license is revoked by operation of law, an individual can avoid discipline because the facts of the grounds for the Accusation were never established. An example to illustrate this would be if the person cannot re-apply for licensure for five years after the revocation; the witnesses and evidence on the case would no longer be fresh and witnesses may not be able to be located. The CSLB would like to change the language in this statute to include the revocation of a license. This bill is going forward and being combined with Section 7011.4 discussed above.


Review and Approval of Recommended Position on SB 691 (Lieu)


Insurance Code section 1095 authorizes the Employment Development Department to share relevant information relating to any specific workers' compensation insurance fraud investigation with various agencies. This bill would add the CSLB to the list of agencies that EDD may share the information with. Costs related to this would be minor and absorbable. The CSLB supports this bill which will allow the CSLB to access EDD records and assist in lead development and workers' compensation insurance investigations. This bill will complement the existing Memorandum of Understanding that the CSLB and EDD have in place which allows them to work cooperatively on enforcement matters. The Board recommended support for this and the motion was carried.


Review and Approval of Recommended Position on SB 975 (Wright)


Business and Professions Code section 101.2 provides for the licensure and regulation of various professions and vocations by the boards, bureaus and commissions under the Department of Consumer Affairs. This bill basically provides that one state entity will have authority to set standards and requirements for each specific profession. The CSLB currently has this bill on its watch list and the fiscal impact is undetermined.


Licensing Program Update


License Application Workload


The number of applications received by the CSLB continues to decline. The belief is that this is due to the economic recession and housing downturn.


Limited Liability Companies


The CSLB is now licensing LLC's as contractors because of the passage of SB 392 in 2010. Although LLC's are similar to corporations, they will also be required to have $1,000,000 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.


Fee Increases and Application Revisions


Effective July 1, 2011, application and licensure fees were increased. Because of this, eight applications were revised to reflect those new fees.


License Transaction Processing Times


Processing times for the various units are monitored on a weekly and monthly basis. Prior to applications being processed, they must go through the cashier and image-scanning which adds two days on the front end of processing. The Licensing Division has maintained acceptable processing times despite the minimal amount of overtime and the 15% staff reduction because of the furloughs.


Fingerprinting/Criminal Background Unit


The fingerprinting that began in January 2005 for the purpose of doing criminal background checks has proved very useful. Through December 2011, the Criminal Background Unit denied 1,056 applications and issued 1,172 probationary licenses. Of those denied licenses, 520 appealed the decisions.


Licensing Information Center


Ongoing Vacancies


The Licensing Information Center continues to have a high number of staffing vacancies. They are currently at 7 vacant positions. Because of the limited staff, call wait times have increased. Since the hiring freeze ended, new staff hiring is a top priority. However, with upcoming retirements staffing is still expected to be an issue. They have hired one retired annuitant which should help with the workload.


Automated Call Distribution


The new system that was implemented in November of 2010 has proven to be very effective in managing call volume. Among other features, incoming callers no longer get a busy signal because the capacity of incoming calls was increased. In addition, supervisors have the ability to monitor incoming calls, the number of agents on the system, and the number of callers waiting in the queue as well as the average wait and the agent talk time in real time so the supervisors can adjust accordingly.


Silent Monitoring Program


The silent monitoring program allows supervisors to listen in on calls with silent monitoring for training purposes. This program will increase the knowledge and skills of the existing call center agents, help new staff members, and gauge the quality of customer service.


Increased Training


The Licensing Information Center's goal of providing timely, efficient, and professional services to its customers caused them to establish a position to serve as a trainer and expert resource for the other staff members. This position is responsible for updating internal call center policies, developing call center scripts for consistency, training new agents, and cross-training existing staff. This training coordinator has developed introductory training materials based on feedback from the current call center staff and it will be followed with an in-depth 40-hour training course offered to all new CSLB employees as well as existing employees who wish to increase their knowledge.


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




The Testing Division has five vacant positions in the Examination Administration Unit and are awaiting approval to fill the position that supervises the Examination Administration Unit. In the interim, two analysts are leads in order to manage the workload. Interviews for test monitors have taken place. A new test monitor started in San Jose and approval is pending on the other three for other locations.


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.


Testing Center Status


The CSLB has eight testing centers: Sacramento, Oakland, San Jose, Fresno, Oxnard, Norwalk, San Bernardino and San Diego. This year Oxnard will be reconfigured to correct inadequate spacing among the seats which will provide additional comfort for the applications. Oakland is in the process of being repainted.


Examination Development


The Examination Development Unit is responsible for ensuring that the 45 examinations are maintained and updated in accordance with testing standards, guidelines and regulations. There are two phases to the development process: occupational analysis and new examination development. These two phases must be completed every five to seven years for each of the examinations. There are new examinations for C-54 Tile, C-9 Drywall, and C-12 Earthwork and Paving. Occupational analyses have recently been completed for C-4 Boiler, Hot-Water Heating and Steam Fitting, C-21 Building Moving and Demolition, and C-47 Manufactured Housing. There are currently 12 other classifications that are in progress of Occupational Analyses or New Examination.


Enforcement Representative I Examination


In June 2011, the Testing Division administered the Enforcement Representative I civil service examination for the first time by computer and it was also the first time that the SCORE application was used for something besides licensing examinations. The exam was given again in December. It is the goal for the CSLB to continue administering this exam twice per year.


Ongoing Consumer Satisfaction Survey


The Testing Division has an ongoing survey of consumers whose complaint cases have been closed to assess the overall satisfaction with the Enforcement Division's handling of the complaints and compiles the data into an annual report. The CSLB began emailing the survey to consumers who provided email addresses to obtain the results in a more timely manner than those sent mail first class mail.


Public Affairs Program Update


Staffing Update

The Public Affairs Office was awaiting approval to hire a Retired Annuitant to assist on several projects. This was finally approved.


Website Highlights


Website Assistance Project

The Public Affairs Office prepares all press releases, industry bulletins and other items for the CSLB's website and the IT staff double-checks their work and uploads the material to the website. This has created timely posting to the website as well as links to the social media websites that the CSLB has.


Social Media

The CSLB currently has 794 "likes" on their Facebook page and 734 "following" them on Twitter. Most are contractors or aligned fields of the construction industry. The most popular topic seems to be information regarding enforcement actions.


The Public Affairs Office also maintains a YouTube page. You can view past quarterly Board meetings as well as the latest post of the Senior Scam Stopper seminar.


Email Alert Feature

Anyone can sign up through the CSLB's website to receive alerts for the California Licensed Contractor newsletter, Press Releases or Consumer Alerts, Industry Bulletins, and Public Meeting Notices or Agendas by email. As of January 25, 2012, there were 14,120 subscriptions, an increase of almost 1,000 in one month. The highest subscription rate is the Newsletter.


Email Registration on Applications/Renewals

Voluntarily submitted email addresses on license applications and renewal forms will be imported into the CSLB's system. The email database now consists of 93,556 addresses.


Media Relations Highlights


Media Calls

From November to February, the Public Affairs office had 16 separate media inquires and provided interviews to a variety of newspaper, radio, and television outlets. There have been numerous media clips, which are provided in the CSLB meeting packet which you can view on their website at http://www.cslb.ca.gov/Resources/BoardPackets/Board_Meeting_Packet_2-7-12.pdf .


Press Releases

Between November and February the Public Affairs Office distributed 7 press releases.


San Francisco District Attorney's Office Press Events

The Public Affairs Office participated in a press event held by the San Francisco District Attorney Office. This event announced the sentencing of an unlicensed contractor who did not pay foreign speaking day laborers and cheated customers out of money all while fraudulently using someone else's license number.


Disaster Outreach Highlights

Although there have been no major disasters, the Public Affairs office continued to support and assist the National Association of State Contractor Licensing Agencies' Resource Committee in developing model program materials for use by all states as part of disaster response.


The Nevada State Contractors Board recently put part of the CSLB's disaster response plan successfully into action after two recent wildfires in the Reno area.


Industry/Licensee Outreach Highlights


California Licensed Contractor Newsletter

This newsletter goes out quarterly. It was posted online in December and the next edition begins production in February.


Industry Bulletins

Industry Bulletins are sent by email as needed to more than 3,800 addresses, including those that sign up with the Email Alert system. Three Industry Bulletins were sent from November to February.


Publication Highlights


2012 Contractors License Law & Reference Book

The law reference book is delayed with the publisher and is expected to be released early March.


CSLB Publications

From November through February, six different publications were completed and five more are in progress. For a full list of the CSLB's publications, visit their website.


Community Outreach Highlights


Senior Scam Stopper Seminars

A promotional/informational brochure and letter was sent to each legislator in September about the Senior Scam Stopper Seminars. This increased interest in holding more of these seminars. Even though there are still travel restrictions in place for all non-enforcement activities (including Senior Scam Stopper Seminars), the CSLB has put in for travel exemptions in order to deliver these seminars. To date, all requests have been approved.


Speakers Bureau

CSLB speakers are in demand, especially on enforcement-related topics. More than a dozen presentations/appearances have been made or scheduled in 2012.



Enforcement Program Update


Vacancy Update

The hiring freeze was lifted at the end of November. There are still 25 vacant positions.


Intake/Mediation Centers Highlights

License Suspension Program Results in Workers' Compensation Compliance


Investigative Centers

Revoked Contractor Sentenced to Prison for Mortgage Scam

Unlicensed Contractor Sentenced to One Year in Jail

Discipline for Illegal Association & Pending Criminal Charges

Division of Apprenticeship Standards Case


Case Management


CSLB Sponsored Arbitration

CSLB sponsored arbitration successfully resolved 610 complaints in 2011. The Arbitration Mediation Conciliation Center continues to administer the arbitration program with a rating of 4.8 out of 5.0.

Statewide Investigative Fraud Team (SWIFT)



During 2011, SWIFT conducted 261 stings and sweeps which produced over 1,100 legal actions.


Partnering Sting in Fresno

There was a two-day sting in Fresno that targeted the landscaping and painting industries and resulted in 21 Notices to Appear.


Partnering Sweep in Sherman Oaks

There was a sweep in Sherman Oaks that issued three citations to unlicensed contractors, opened an investigation into a licensee contracting with an unlicensed contractor, two stop orders/penalty assessments issued and three audits for investigation of failure to withhold payroll taxes.


General Complaint Handling Statistics

The manageable level of pending complaints is 4,291. At the end of 2011, the pending caseload was 3,683.


Training Update

As per the Strategic Plan, the training for staff includes basic enforcement procedures, mentoring program, and specialized training. There were 11 courses provided to the staff over the year.


Review and Approval of Changes to Proactive Enforcement Strategy

David Fogt presented proposed proactive enforcement changes to the Board asking for a motion to approve designating 11 SWIFT investigators to partner with the Labor Enforcement Task Force.


Review and Approval of Enhanced Enforcement Representative Identification

CSLB has been developing an official CSLB emblem and professional identification card since a formal professional looking ID would help investigative staff identify themselves as government officials when they are in the field. This portion of the meeting was cancelled and held over to discuss at a future meeting.


Administrative and Program Update


Personnel Update



There are three analysts in Personnel and they are actively recruiting two more.



There are 58 vacant positions at CSLB. The majority of them are in the call center.


Business Services Update


Space/Leasing Facilities

Bakersfield is searching for a new location. San Francisco will be installing bullet proof glass. Fresno is in the process of adding a public counter and installing bulletproof glass. San Bernardino is reconfiguring the office and adding a public counter with bulletproof glass. Oxnard is waiting on pricing to reconfigure modular furniture in the testing center.



Over 100 contracts in support of the newly established Expert Consultants Contract requirements have been completed, creating significant workload for the staff.


Pitney Bowes Presort was awarded the "pre-sort" mail bid, but the Department of Consumer Affairs retracted it. No further efforts will be made to receive discount mailing services.



The Department of Consumer Affairs is cleaning up the Fleet Asset Management System and the Voyager Card database, cancelling some active cards. This is creating an inconvenience.


Information Technology Division Update


Limited Liability Company

SB 392 authorized LLC's to hold contractors licenses. IT completed many phases in order for this to be possible by the deadline of January 1, 2012.



The Department of Consumer Affairs has signed the contract with Accenture, who started in late September. They are currently figuring out the requirements for Phase I for BreEZe to include e-payment/online licensure, licensing and enforcement and imaging functions as well as workflow.


The BreEze Change Control Board has been established to review and approve changes to the current system. All modifications to the CSLB's licensing and enforcement system will have to be approved by this control board.


California Emails System Mail

The CSLB began its migration to the California Email System (the State's shared email system) in late January. They are the second board to move. The rest of the Department of Consumer Affairs will follow in March.


Budget Update


The CSLB basically has no budget problems. This is partially due to the fact of the hiring freeze.


Fiscal Year 2011-12 CSLB Budget and Expenditures

By December 31, 2011, CSLB spent roughly 50% of its Fiscal Year budget, which is right on target.



The CSLB experienced a 5.3% growth of revenue through December 31, 2011.


Workforce Cap Budget Adjustment

State departments have been required to submit plans to achieve a 5% workforce cap reduction. The CSLB's target is a reduction of just over $1.2 million. This caused the CSLB to eliminate 12 permanent positions.


Fund Condition

The Contractors' License Fund has a reserve of $14.9 million, to cover approximately three months.


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

The Construction Management Education Account spent roughly $6,600 in pro rata charges though December 31, 2011.


CMEA Fund Condition

The Construction Management Education Account currently has over 20 months in reserve but the projection shows that by 2014 there will be no reserves. These are grants. It has funded various items in the past.



The Board has identified the following objectives to help meet its goals.



April 17-18, 2012, Monterey, Strategic Planning Session


June 5, 2012, Orange County, Joint Board Meeting with Nevada State Contractors' Board


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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