By Shauna Krause, President, Capitol Services, Inc.
The oldest clichés are often human wisdom, as ‘haste makes waste’ is always true. A contractor with ambitions to ‘roll the dice’ in Nevada joins two others with questions about ‘time and money’...
Q: We are a CA “B” General Building contracting company and are applying for a new license in the State of Nevada. We typically do smaller remodeling jobs; we don’t build new homes or buildings. We submitted our application and requested a bid limit of $50,000. The Nevada Board sent a letter stating that as “B” contractors we are required to request at least a $200,000 bid limit, and further stated that our financial statement must “support” that bid limit request.
We don’t need a bid limit that high, nor are we sure that our financials “support” a limit that high. My boss suggested I contact you to see if you know of any way around this requirement. Just to throw in another wrench, we need this license in a hurry and we don’t have time to wait for our accountant to prepare a new financial statement!
A: First of all, “B” contractors must request a limit of at least $200,000, there is no way around that. The Nevada Board assumes that most “B” contractors are doing ground-up construction and therefore the majority of their jobs will go over $200,000.
However, it’s possible that your company would not need a General Building “B” license if you are only doing repair and remodel work and no ground-up construction. Nevada has close to 100 classifications of contractor licenses, so you may want to consider obtaining a specialty license for the specific type of work you perform. Please call my office and we can discuss the nature of your typical jobs and determine whether a different classification may work for you.
Q: We are starting a new contracting business in CA and we need to find a Responsible Managing Employee (RME) or Responsible Managing Officer (RMO) so that we can obtain a license. What type of formal agreement is necessary and what is the typical salary for an RME/RMO?
A: We get asked this question frequently, but like any other employee, RME/RMO salaries vary and that is something determined internally within your company and worked out between you and your RME/RMO. The CSLB has certain duties that are required of an RME/RMO, however they do not involve any type of “formal agreement” beyond the requirement that the individual be an employee or Officer of the company.
Q: Will the CSLB take a letter or credit from our bank for both bond amounts required (Contractor’s Bond and Bond of Qualified Individual) in lieu of the actual bonds? We have established a letter of credit for the bonds with our current bank.
A: The CSLB will not accept a letter of credit. However, a cash deposit can be filed in lieu of the bonds. The cash deposit must be in the form of a cashier's check, bank certified check, certificate of deposit, savings account passbook, savings and loan association investment certificate or share account, or credit union certificate for funds or share account.
While knowledge is power, knowing where to go for the answers is half the battle. Get expert assistance immediately when you call 866-443-0657, email info@cutredtape.com, or write us at Capitol Services, Inc., 1225 8th St. Ste. 580, Sacramento, CA 95814. Research past columns at www.cutredtape.com.
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