SACA Newsletter - July 2015

"Regulation taking back seat" continued:

Enforcement against contractors who break the rules has at times become more lax, according to former ROC Director William Mundell, who held the post from 2009 to 2015 under then-Gov. Jan Brewer. Fleetham has espoused a view of the ag

ency’s role as being primarily about issuing licenses instead of regulating the industry. He has stated a reluctance to tackle anything but major violations in the contracting industry. And some in the industry are upset over the new director’s decision to close a handful of ROC offices that service far-flung rural areas.

“It’s alarming and it puts the public at risk,” said Mundell. 

At a May luncheon in Prescott, Fleetham told the crowd that going after unlicensed contractors was not a top priority, according to attendees. While he said the ROC would continue targeting major violators, Fleetham said it was the industry’s job to expose smaller fish in the world of illegal contracting, attendees said.

Those comments did not escape the notice of the Yavapai County Contractors Association, which hosted the luncheon. Sandra Griffis, the group’s executive director, raised the issue to Ducey in a June 2 letter.

“Director Fleetham recently stated at the Yavapai Contractors Association meeting that licensed contractors are on their own when dealing with unlicensed contractors unless the criminal activity become(s) newsworthy,” Griffis wrote. “How are criminal activity reduced and the public protected by eliminating investigative oversight and turning a blind eye to it unless it becomes newsworthy?”

Griffis said Fleetham also described the ROC’s primary responsibility as issuing licenses.

“This statement demonstrates a total lack of understanding of the laws that govern the ROC or a conscious decision to ignore them. I hope this isn’t at your urging,” Griffis wrote to Ducey. “I agree with your goal to reduce regulations but there is a point when regulations and enforcement are critical and vitally important.”

Mundell said those comments echoed remarks Fleetham made at a construction law seminar hosted by the State Bar of Arizona, in which Fleethan said the ROC’s primary obligation is to be a licensing agency, not an enforcement agency.

The former director said two particular cases at the ROC highlight Fleetham’s relaxed attitude toward enforcement.

In 2014, the ROC issued a subpoena for records from AAA+ Flooring Inc., which the agency suspected of contracting during a 30-day suspension of its license. Mundell said ROC had suspended the agency’s license – its second suspension – for refusing to pay $4,500 in reimbursement to the agency’s recovery fund for money it paid a AAA+ customer for poor workmanship. After AAA+ refused to turn over the records, the case went to court, where a Maricopa County judge ruled in favor of the ROC.

But rather than pursue a revocation of AAA+ Flooring’s license, as Mundell did, Fleetham’s ROC reached a settlement in which the company’s license was suspended for a mere seven days. Mundell referred to it as a “sweetheart deal.”

“With repeat offenders, discipline gets tougher, not more lenient,” Mundell said. “If this case is any indication, it means the public will not be protected from incompetent or dishonest contractors.”

In another case, the ROC had refused to grant a license to Capital Landscapes LLC after the agency determined that it did not have the requisite experience. An administrative law judge upheld the agency’s decision in March. But ROC issued a license to Capital Landscapes one month later.

Griffis was especially concerned about the ROC’s announcement on May 28 that it would close offices in Kingman, Prescott, Show Low and Yuma in June, while restructuring offices in Flagstaff and Tucson. The closures and restructuring will eliminate five customer service representative positions.

The ROC’s press release on the closures said increases in technological capabilities and efficiencies have eliminated the need for brick-and-mortar offices in outlying areas of the state. Yavapai County investigators will maintain a “virtual office” while working out of the agency’s Flagstaff office.

But Griffis noted that the decision leaves the ROC with only one office in rural Arizona. She said many people, especially the elderly, who do not have access to computers rely on those offices. With the reduction in staff who can assist with investigations, Griffis predicted a backlog of complaints and said unlicensed contracting, “will again grow by leaps and bounds.”

Griffis emphasized that the ROC is funded through fees on contractors. In return, the contractors expect accountability, sound decision-making, service to the community and the timely handling of complaints.

“It is imperative that the ROC perform these functions and that they spend their funds efficiently, effectively and in both the public’s best interest and the industry’s best interest,” Griffis wrote. “That is not what is happening at ROC.”

ROC spokesman Jim Knupp said the agency would not respond to Mundell’s comments. Regarding his comments to YCCA, Fleetham emphasized that the agency only has 15 investigators for unlicensed activity in the entire state, and that he was only expressing a realistic view of the ROC’s capacity to tackle the problem.

“When speaking to trade associations or contractors, AZ ROC addresses the reality of the agency’s inability to end unlicensed entity activity alone and reinforces the importance of industry involvement in assisting our agency as we work to curb unlicensed activity,” Fleetham said in a statement emailed to the Arizona Capitol Times.

In a letter to Ducey and state lawmakers, Fleetham reiterated that he did not believe it was necessary to maintain physical buildings in outlying areas. And he said the closures would save about $300,000 per year. But the closures were not aimed at reducing costs, he said.

Fleetham said the extra money would allow ROC to hire more investigators. The agency will soon post four openings for investigations, Fleetham wrote, and plans to add six more who will specifically target unlicensed contracting activity.

“These cost savings will enable AZ ROC to hire additional investigators to increase our efforts in tackling the seemingly never-ending problem with unlicensed entities performing contracting work,” Fleetham wrote.

ROC did not mention the additional investigators in the press release that announced the four office closures.

Some in the industry defended ROC’s office closures. Yira Hoffman, a member of the Yuma Southwest Contractors Association’s board and the group’s former executive director, said she supported the move.

“I can appreciate the fact that they’re always trying to save money. As a taxpayer, I do appreciate that,” Hoffman said.

ROC legal counsel James Hanson explained the agency’s reversal of its decision to deny Capital Landscapes a license in a filing with the Office of Administrative Hearings. He said the agency’s then-licensing chief denied Capital Landscape’s license based on “exaggerated requirements” that were “both fictitious and impractical.”

Specifically, Hanson said the licensing chief, who no longer works for ROC, improperly denied the license because he’d been unable to get in touch with former employers who could verify the applicants’ experience, even though that employer and others detailed the experience in notarized statements. Hanson also noted that the licensing chief erroneously determined that the applicant had far less experience than he and former employers claimed.

“Given those two senseless assertions, the denial letter’s fundamental ‘finding’ … lacked merit and appears to have been arrived at arbitrarily,” Hanson wrote.

Hanson’s filing didn’t address other reasons for Capital Landscape’s license denial, including assertions that the applicant’s employer had a suspended license during part of his employment.

Knupp said AAA+ Flooring’s suspension was consistent with penalties given to others who contracted with suspended licenses during Mundell’s tenure. Under an October consent order, one company received a five-day suspension and a $1,000 fined for contracting while its license was suspended. In June, another received only a “letter of concern.” Another company in December received a 16-day suspension. And a company in February got a 90-day suspension.

Knupp said the practice of issuing “back-end subpoenas” to contractors suspected of contracting while their licenses were suspended was short-lived and was no longer in effect by the time of Fleetham’s confirmation in March. But the agency continued disciplinary actions against contractors that were subjected to the 11-month policy.

Contractors who complied with the subpoenas and were found to be contracting on suspended licenses received various penalties of up to $1,000 per violation and disciplinary actions that ranged from letters of concern to revocation of their licenses.

“Issuing subpoenas remains within the statutory authority of the agency and Director Fleetham understands the agency has the statutory authority to reinstate the broad application or use of back-end subpoenas as a tool, if necessary,” Knupp said in an email.

Farrell Quinlan, who runs the Arizona chapter of the National Federation of Independent Business, said he considers Fleetham a “breath of fresh air” after the ROC became “very punitive” under Mundell. He emphasized that, as a licensed contractor and a former ROC investigator, Fleetham brings a unique perspective to the agency.

“He’s lived under it. He’s been a regulated contractor and he’s been a regulator himself. So I think he’s got a great perspective and we should probably give him a chance to show us what he can do in that position before we start making judgment,” Quinlan said.

Scholarship continued: 

When she started experimenting, she found that she genuinely liked welding.  “There is great satisfaction in knowing you’ve created something that will last a lifetime”.

Hope is 18 years old, a home-schooled student that has completed level 12 in the Arizona Study Program, and has received the James Anthony Award.   She received her GED in February 2015.

Besides welding, Hope’s passion is music.  Hope is presently teaching music to 12 children and because her students are enrolled in various community activities, is a member of the Cochise Music Teachers Association (CMTA).

Hope is involved in community activities, such as performing for a local retirement home 2-3 times a year with the “Sonshine Ensemble”, a group with her sisters and friends.   Hope has assisted in science camp for several years, and participated in College Ensemble.

Hope has been learning German and plans on spending a month in Germany to become fluent. 

Several letters of reference detailing Hope’s welding projects, her ability to plan, and her work ethic assured our organization that she was a worthy recipient!  “She came and did her own measurements on each opening, did a material take-off, and designed each gate.  She did a fantastic job in a very professional and timely manner.”

Hopes other interests include hiking in the Huachuca Mountains, rock climbing in Cochise Stronghold, and a good game of competitive table tennis!

Congratulations, Hope!  We are privileged in taking a part in educating such a bright and dedicated member of our community … AND congratulations on being the first female to receive a construction scholarship from the Southeastern Arizona Contractors Association! 

We are pleased that we had such great candidates this year!  Applications for the 2016 scholarship will be posted on January 1, 2016 on the SACA website:  www.saca-az.org

Gowan continued:  

for the Indian reservation, and the Eastside of Pima County (Rosemont area, Corona, Vail, Rita Ranch, and the surrounding mountains of East Tucson). 

Representative Gowan was honored to be elected by the Republican Caucus to serve as the Speaker of the House. The prior two years he served as the House Majority Leader and was appointed to serve on Rules, the Federalism and Fiscal Responsibility Committee and the Technology and Infrastructure Committee. His statutory committee assignments included: Legislative Council, the Joint Legislative Budget Committee, and the Joint Committee on Capital Review. 

During his time at the legislature, Representative Gowan has been extremely successful in passing legislation. Much of his focus has been aimed at making Arizona the most veteran friendly state within the union. He has previously helped secure funding for the Southern Arizona’s Veteran’s Home that is now being built in Tucson. Most recently, he orchestrated a monumental military benefits package, which among other things, makes Arizona campuses more veteran supportive, helps disabled veterans navigate bureaucracy when obtaining special license plates, and encourages government contracts for veteran-owned businesses. 

He has also been instrumental in enacting legislation on behalf of the Boy Scouts of America, including securing for them accessible recreational areas (Rose Canyon Lake), creating a special license plate with proceeds benefitting the organization, and championing a law in 2010 to make the 100th anniversary of the Boy Scouts of America officially recognizable by the state of Arizona.

In recognition of his efforts, Representative Gowan has received several awards and recognitions while serving at the House of Representatives. Most recently, he was given the Legislative Friend Award for dedication to strong, effective local government in Arizona by the League of Arizona Cities and Towns. Also, he was presented with a Certificate of Appreciation from the U.S. Department of Defense, signed by Robert L. Gordan, III, Deputy Assistant Secretary of Defense for Military Community and Family Policy, “for his leadership on public policy changes positively impacting the quality of life of Service members and their families residing in Arizona, during the 2011 Legislative Session.” Other awards and recognitions include:

• NRA (National Rifle Association) A+ rating
• Arizona Citizen’s Defense League (AzCDL) Legislator of the Year (2012)
• Spirit of Business Award from the Tucson Metropolitan Chamber of Commerce for his “work passing legislation that impacts the region in a positive manner and promotes a strong local economy.” (2012)
• Friend of the Family recognition from the Arizona Family Project (2012) (2013)
• Guardian of Small Business Award from the National Federation of Independent Business for “having worked effectively to protect and preserve the future of free enterprise and small business." (2011)
• U.S. Army Freedom Team Salute for “outstanding contributions to the United States Army and support of Soldiers fighting the Global War on Terrorism.” (2011)
• Award of Sincere Appreciation from the U.S. Army Yuma Proving Ground for “year-round support of the Yuma Proving Ground and America’s men and women in uniform.” (2011)
• Seven Seals Award from the United States Assistant Secretary of Defense for “meritorious leadership and initiative in support of the men and women who serve America in the National Guard and Reserve.” (2010)
• Certificate of Appreciation from the Boy Scouts of America – Grand Canyon Council, for “exemplary work in preparation and execution of the 100th Anniversary Celebration.” (2010)
• Certificate of Appreciation from the Arizona Hemophilia Association for help in “enhancing the quality of life in the hemophilia community through education, awareness, and social service.” (2009)

The Representative is a proud graduate of the University of Arizona, holding a B.A. in Secondary Education/Social Studies. He has been married to his wife Jessica for 18 years, and they have two sons. Originally hailing from Northern California, they have lived in Arizona since 1993. When he is not busy with legislative business, David enjoys being active at his local church and in his son’s Boy Scouts, where he acts as the Chairman of Troop 408. Representative Gowan has become very engaged in his local educational community where he sits on the Board for Veritas Christian Community School. He is a member of the Sierra Vista ELKS Lodge #2065, and is also a committed martial artist, and is the Chairman of Tai Shin Ki Do Martial Arts System founded by Hanshi Barnes. 

Growing up, Representative Gowan learned his core values from his father, Jim, who is himself a military Veteran. And, that is why he now feels very blessed to be serving the ones who protect us everyday abroad and at home. In his own words, “We ought to be a hub…a shiny beacon of light for all veterans in Arizona. May God bless and protect those who defend and protect us and our freedoms every day! And, to them, I say thank you.”

Larry and James continued:

Larry was on the board from 1991 to around 2003, and then took some time off until 2004.  

Larry served as President in 1996, and in 2011-2012 and was a Director serving as a City Liaison  and Scholarship Co-chair until the end of last year.   

Larry brought a lot of great insight on the board, and still is involved with the SACA Scholarship Program.

His goal is to build up the SACA scholarship program to help increase a quality work force for our members. 

We really appreciate his service to SACA.

James or “Robbie” became a Director in 2011, and stayed on the board becoming the Vice-President in 2014.  

Robbie chaired the SACA Construction News & Views, the SACA monthly newsletter and the SACA Charity Golf Tournament.  

Robbie's quick wit, ideas and energy that he brought to the SACA board was invaluable. 

We really appreciate his service to SACA.