Chairperson Gale convened a meeting of the Nebraska Real Estate Commission at 9:05 a.m. on August 17, 2004, in the Staybridge Room of the Staybridge Suites, located at 2701 Fletcher Avenue in Lincoln, Nebraska. All of the members of the Real Estate Commission were present. Also present were Director Les Tyrrell, Deputy Director for Education Teresa Hoffman, Deputy Director for Enforcement Terry Mayrose, and Administrative Assistant Heidi Burklund. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, was present for the errors and omissions insurance contract award protest. Chairperson Gale introduced Wesley W. Grady of North Platte, who was appointed by the Governor to replace Commissioner Wiebusch when her term expires at the end of the month.

Director Tyrrell presented a public notice and proofs of publication thereof relating to this meeting, all of which are attached to and made a part of these minutes. Chairperson Gale reported that all Commissioners had been notified of the meeting simultaneously, in writing, and that a proposed tentative agenda accompanied the notification.

Chairperson Gale pointed out to those in attendance that a public copy of the materials being used during the meeting was available to the public on the counsel table in the meeting room, and that the procedures followed were in accordance with the Open Meetings Law. Chairperson Gale asked that guests sign the guest list.

Director Tyrrell noted that agenda items 12c, 16f, 16g, and 17 had been added since the tentative agenda was mailed to the Commissioners.

After review of the final agenda, a motion was made by Poskochil and seconded by Wiebusch to adopt the final agenda as presented. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

The minutes of the Commission meeting held on June 14, 2004, were considered.

After review, a motion was made by Strand and seconded by Wiebusch to approve the minutes as presented. Motion carried with Johnson, Moline, Poskochil, Strand, Wiebusch, and Gale voting aye, with Shepard not participating or voting, not having been present at the meeting.

Director Tyrrell presented the Receipts and Expenditures Reports for June and July. Copies of said reports are attached to and made a part of these minutes.

The cash fund balance as of June 30, 2004, was $797,334.13, which compared to a cash fund balance of $670,949.92 on June 30, 2003.

Regarding the July report, Director Tyrrell noted that Receipts Category 484500, Reimbursement from Non-Government Source, showed that Mr. Cutler paid his disciplinary hearing expenses. In addition to the items noted for correction regarding the June report, Expenditures Categories 571100, Board and Lodging, and 572100, Commercial Transportation, showed expenses for the ARELLO District Meeting in South Carolina.

The cash fund balance as of July 31, 2004, was $757,958.03, which compared to a cash fund balance of $631,139.81 on July 31, 2003.

After discussion, a motion was made by Moline and seconded by Strand to file the June and July Receipts and Expenditures Reports for audit. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Director Tyrrell presented a Renewal Report, which showed renewals as of June 30, 2004. A copy of said report is attached to and made a part of these minutes.

No action was necessary on this report.

Director Tyrrell presented the Monthly Budget Spread for FY 2004-2005. A copy of said report is attached to and made a part of these minutes.

No action was necessary on this report.

Director Tyrrell presented the 2005-2007 Biennium Budget Proposal. A copy of said proposal is attached to and made a part of these minutes.

Commissioner Moline said it was an interesting document, and that he felt it was an appropriate amount to request.

Commissioner Moline, as Chairperson of the Budget and Planning Subcommittee, described the budgeting process. Commissioner Moline and Commissioner Wiebusch, who had reviewed the budget documents at length during the Budget and Planning Subcommittee meeting, recommended a $10.00 decrease for the 2005 license fees, and recommended that the Commission not raise examination fees when the expense increases next summer. There were some potential additional expenses coming in this year, with several hearings set which could take multiple days, and if more Commissioners chose to attend ARELLO meetings. Commissioner Moline said that he and Commissioner Wiebusch thought the $10.00 license fee reduction could be maintained for several years. The budgetary low water mark was usually in September or October, depending on when renewals went out. The Subcommittee estimated the low point for the cash fund balance this year would be $643,000.00, and the target was $500,000.00. A $10.00 license fee reduction should be possible to maintain for 4-5 years without increasing fees, and would bring the cash fund balance into the target range.

Commissioner Moline said the Commission did not want to drastically change fees every year. Director Tyrrell noted that, if the anticipated reduction in the number of licensees did not occur, the Commission could lower fees again next year. Commissioner Strand said Director Tyrrell could say the Commission was systematically reducing fees, if the Legislature asked. Director Tyrrell said they sometimes ask such questions during the budget approval process.

Director Tyrrell suggested that the new fee be effective for renewals for 2005, and that the Commission make the reduction of license issuance fees effective 1-1-05. That would be fair to all licensees, regardless of the amount of the reduction.

Commissioner Moline said the amount depended on how dramatic a change the Commission could tolerate. Commissioner Poskochil said that Commissioner Moline gave an excellent analysis. In the late 1980s, the industry lost 30% of its licensees. The Commission could not increase fees when licensees were not making it. Commissioner Poskochil was in favor of a gradual reduction, and see how it went. There would be a day of reckoning in the real estate industry, and Commissioner Poskochil did not want to increase fees when the market was slow.

A motion was made by Strand and seconded by Moline that renewal fees be reduced by $10.00 for 2005 licenses; that new license fees be reduced by $10.00 effective 1-1-05; and that the Commission leave examination fees at the same level during 2005.

Director Tyrrell said there would be a $165,300.00 impact on new license fees with a $25.00 reduction. Mr. Neilan said his charge was only to discuss renewal fees, because past licensees had already contributed to the cash fund balance.

Chairperson Gale said that if he was getting this right, and he was struggling with it, when the Commission got its appropriation from the Legislature, that covered the entire amount of estimated expenditures. The Commission had the cash fund balance on top of that, which was unallocated and unappropriated. If the Commission needed to use that, staff would go to the Legislature for deficit appropriation of that money. Director Tyrrell said it would only be for deficit expenditure purposes, and for that, it would not matter if the number of licensees would drop. The Commission did not have to go to the Legislature to raise fees, because the Legislature only appropriated expenditures. Chairperson Gale said maybe the Commission had more authority here, and could use the deficit budget process for additional expenditures. Chairperson Gale noted the Commission would have to exceed its high estimates to need deficit appropriations.

Commissioner Moline said that, for a couple of years, he had thought the Commission was taking in too much money, and needed to get to equal expenditures and receipts. It came down to getting there dramatically or not, and either way worked. Chairperson Gale said the money was coming from individual business people, and the question was how much right the Commission had to keep that money from their pockets.

Commissioner Johnson proposed an amendment to the motion, to reduce fees by $20.00 for active licensees only. Director Tyrrell asked for clarification that the motion was to just reduce renewal fees for 2005 by $20.00. Commissioner Johnson said that was correct, as the Association had requested.

Commissioner Strand said that next year was another year. As long as the cash fund balance was not growing, that was what was important. Commissioner Strand did not want the Commission to find themselves in a position of not managing. It was imprudent to make it an erratic fee schedule and overshoot the mark. Commissioner Strand did not feel the amendment was acceptable.

Chairperson Gale said the motion to amend failed for lack of a second. Seeing no further discussion of the original motion, Chairperson Gale called the question.

A vote was taken on the pending motion. Motion carried with Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Johnson and Gale voting nay.

Chairperson Gale noted for the record that he was not voting against a reduction in fees, he just felt it was not enough of a reduction. Commissioner Johnson said that was why he voted against the motion as well.

Director Tyrrell noted that pages 7 and 8, the funds analysis of the budget proposal, could be amended with a notation that the Commission was anticipating lowering fees effective as noted in Exhibit 4d to make it accurate. Commissioner Strand said he would not change the numbers any, which had been conservative. Director Tyrrell said he would indicate that the Commission will be lowering fees per the motion.

Chairperson Gale asked how Director Tyrrell arrived at a 2.5% reduction in licensees. Director Tyrrell said he had used a 2.5% reduction, because he thought the numbers of licensees will start decreasing. It was not an exorbitant number, just enough to cover if there was a decline. If the Commission had a situation like the late 1980s, with a 30% reduction, that would be another story. 2.5% seemed reasonable. Commissioner Strand said the $10.00 fee reduction resulted in approximately that number.

On behalf of the Subcommittee, a motion was made by Moline and seconded by Wiebusch to approve and submit the budget proposal as presented; to authorize staff to make any appropriate grammatical or similar changes; to add the notation of the impending fees decrease; and to give Director Tyrrell leeway to adjust the budget if rent increases were significant.

After discussion, motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Director Tyrrell presented an exhibit regarding proposed fee adjustments. A copy of said exhibit is attached to and made a part of these minutes. This agenda item was addressed during discussion of agenda item 4b.

There were no specialized registrations to be presented at the meeting.

Deputy Director Hoffman presented for ratification the Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other Jurisdictions Report, a copy of which is attached to and made a part of these minutes.

After review, a motion was made by Moline and seconded by Strand to ratify issuance of the licenses as set forth in the report. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Deputy Director Hoffman presented for ratification the June and July Examination Reports, copies of which are attached to and made a part of these minutes.

After review, a motion was made by Moline and seconded by Wiebusch to ratify the June and July Examination Reports for the purpose of issuing licenses. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Deputy Director Hoffman presented for ratification the Prelicense Education Instructor Approval Report, a copy of which is attached to and made a part of these minutes.

Deputy Director Hoffman presented for ratification the Continuing Education Activity Approval Report, a copy of which is attached to and made a part of these minutes.

Deputy Director Hoffman presented for ratification the Continuing Education Instructor Approval Report, a copy of which is attached to and made a part of these minutes.

After review, a motion was made by Wiebusch and seconded by Johnson to ratify the reports. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Deputy Director Hoffman presented for ratification the Continuing Education Activity Significant Change Report, a copy of which is attached to and made a part of these minutes.

After review, a motion was made by Strand and seconded by Shepard to ratify the report. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Deputy Director Hoffman presented the Continuing Education Activity Rejection Report, a copy of which is attached to and made a part of these minutes.

No action was necessary on this report.

Director Tyrrell presented a summary report of the pending complaints, which included a list of licensees presently under disciplinary action or on appeal. A copy of said report is attached to and made a part of these minutes.

No action was necessary on this report.

The following sworn complaints and investigative matters were presented to the Commission:

Item A Complaint #2004-017 - Woods Bros Real Estate Group, Inc. vs. Forrest J. Pollard, Marion Dean Larsen, & Coad Jay Miller

Prior to discussion of this matter, Commissioner Moline recused himself, thereby nullifying any potential conflict of interest. Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Strand and seconded by Wiebusch that the complaint be set for hearing on alleged violations 4, 6, and 11 as made against Respondent A in the original report, and dismissed without prejudice against Respondents B and C. Motion carried with Johnson, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

Item B Complaint #2004-024 - Jason & Stacey Sudbeck vs. Nancy Johnson Faulhaber

Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Johnson and seconded by Shepard that the complaint be dismissed without prejudice. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

There were no stipulation and consent orders to be presented at the meeting.

The hearing scheduled for the meeting was continued.

Chairperson Gale reviewed the procedure for informal special appearances.

The Carper letter explained the O Street Carpet situation. Mr. Hardt had assumed he would be billed, which was a miscommunication. Mr. Hardt wrote the check on the spot, and when it did not clear, he took care of it. Mr. Carper did not want to prosecute, but the Lincoln Police Department (LPD) prosecuted him anyway. LPD just wanted to violate him on what was going on at the time. Mr. Carper was not being cheated. Mr. Hardt just should have told them to keep the carpet, and not written the check. Mr. Carper has no problem with Mr. Hardt.

Mr. Hardt said he is an honest person, and had 8 years of references. He has a good work ethic, and tried to do the right thing.

Commissioner Moline said he was a CPA, and had also been a banker. He found it interesting that a CPA would advise Mr. Hardt to anticipate income. In banking, the bank always tried to take care of its customers with bad checks. In all of these problems, Mr. Hardt said he was a victim of circumstance, which was too much for Commissioner Moline to buy. Commissioner Moline said he would also vote no.

A motion was made by Moline and seconded by Poskochil to not allow Mr. Hardt to sit for the examination. Motion passed with Johnson, Moline, Poskochil, Shepard, Wiebusch, and Gale voting aye, and with Strand voting nay.

Chairperson Gale reviewed the procedure for informal special appearances.

Chairperson Gale asked how Mr. Seckinger was apprehended. Mr. Seckinger said the others got into trouble, and they told the police he had the stuff to get a lesser sentence. Chairperson Gale asked if Mr. Seckinger was acquainted with the others involved. Mr. Seckinger said yes, they were not good friends, but knew each other.

Chairperson Gale said Mr. Seckinger had shown progress, but was just off parole, and had not been on his own for long without supervision. Chairperson Gale said maybe Mr. Seckinger should complete his SCC degree, and maybe get involved in the community, to show public spirit. Licensure was a very significant public trust, and Mr. Seckinger was not quite there yet.

Commissioner Strand asked if Mr. Seckinger was eligible to apply for a pardon. Mr. Seckinger said he thought that was after 7-10 years, from the end of his sentence last May. Chairperson Gale said it depended. If the person was in the community and managing his own life, it could count. If someone was incarcerated, he was not managing his own life. Commissioner Strand encouraged Mr. Seckinger to keep track of the dates, so he could get a pardon and get his civil rights restored. That carried a lot of weight with the Commission.

A motion was made by Poskochil and seconded by Shepard to not allow Mr. Seckinger to sit for the examination. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

Chairperson Gale said Mr. Seckinger made a good impression, and could come back in the future. He was headed in the right direction, but would need more time between being off probation and applying.

Chairperson Gale reviewed the procedure for informal special appearances.

Mr. Voss said that, for the last 8 years, he had built homes and duplexes and started a laundromat. He also rehabbed repossessed homes. He had keys to hundreds of HUD houses, because he installed new locks, did maintenance on them, and got them ready to resell. He had done that with his uncle for the last 3 years, from Lincoln to Sioux Falls. He had built and sold homes, and had up to 12 rental properties at a time. He went to real estate school to enter the workforce on a professional level, because he was getting too old for manual labor, and was fascinated by real estate. He had a job lined up in Columbus if he could get a sales license. Mr. Voss said he did well in the real estate courses, which he took January-April. He also helped his brother, who flunked the test. He hoped he would not. Mr. Voss tried everything he could to make money, because he was an entrepreneur. The laundromat did not make it.

Mr. Voss said he had no stability before he was on probation. His parents were both alcoholics. Mr. Voss had never held a job, and had no place to live. Now he had structure, was reformed, and liked who he had become. Mr. Voss wanted a chance at the life he could have had. His daughter just came back into his life. He had not known about her, because he and his girlfriend had broken up, and she did not tell him about his daughter. The daughter was now 18, and had been in contact for the last 3 years. Mr. Voss said what he did was hideous, and he was not the same person. Mr. Voss also has a son he had not found yet. He had put his son up for private adoption, and the son will soon be 15. At the time, before he was in treatment, he chose drinking and running around over his son. That was hard to face up to. He made mistakes, and hoped he had corrected them.

Commissioner Strand asked about the nullification, and noted that his sex offender registry had a 2010 expiration. Mr. Voss said he was at the lowest level of classification. Only the sheriff knew about him, because Mr. Voss had to register with him. Nobody could find out about it, because he took that precaution.

Commissioner Johnson noted that Mr. Voss had a good business with his uncle, and did pretty well. Commissioner Johnson asked if Mr. Voss just wanted out of the physical side of the business. Mr. Voss said yes, he wanted to enter into the professional side. Rehabbing was hard work, because they were old houses, and some were really nasty. Mr. Voss wanted to leave the past behind. Driving trucks hurt his back, and caused headaches and stress. Commissioner Johnson asked if Mr. Voss would work in Columbus. Mr. Voss said yes.

Chairperson Gale asked how old Mr. Voss was at the time of his crime. Mr. Voss said he was 30 at the time. The girl was living with his brother and her mom, and she stopped by. She was looking more for a father figure. He should not have done it. He had been drinking all night, and went to treatment right after that happened.

Commissioner Strand said the Commission did background checks, which included an FBI check. Commissioner Strand asked if Mr. Voss would be on the sex offender registry until 2010. Mr. Voss said yes, and it would show up if he gave permission for a background check. Commissioner Strand said that the nature of the job was showing homes and driving the public around. He did not know, since he was in possession of the knowledge that Mr. Voss was on the registry, how to answer someone who asked how he could have approved someone who was on the sexual offender registry. Mr. Voss said it will always be on his record, he just will not have to register anymore after 2010. Commissioner Strand asked if it would show up on a background check. Mr. Voss said yes, for the rest of his life. He could not get it off his record, because it was a permanent record type of thing. Commissioner Strand asked what would happen if he was pardoned. Director Tyrrell said the conviction might be pardoned, but would not be removed from the record.

Commissioner Strand asked for clarification that eventually Mr. Voss would not have to register. Mr. Voss said yes. He could get the requirement removed, but he did not want the publicity, so he just registered. Mr. Voss noted that he had turned himself in, and there had been no warrant for his arrest. He confessed on his own, when he realized what he did was stupid.

A motion was made by Wiebusch and seconded by Strand to not allow Mr. Voss to sit for the examination. Motion carried with Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye, and with Johnson and Moline voting nay.

Director Tyrrell presented an exhibit regarding the Rice Insurance Services Company LLC (RISC) protest of the errors and omissions insurance plan contract award. A copy of said exhibit is attached to and made a part of these minutes. Ms. Cindy Rice Grissom and her attorney, Loel P. Brooks, were present and representing RISC.

Chairperson Gale said Ms. Rice Grissom did an excellent job representing her company and her issues. Chairperson Gale appreciated her coming here today. Under Nebraska law, this was the procedure to be followed if a bidder took exception to a contract award. The protest permitted a complainant to take an administrative step, without seeking judicial relief or an injunction. Ms. Rice Grissom presented her thoughts. This was not a negotiating session or an opportunity to hear an explanation from the Commission, it was just her opportunity to impress upon the Commission the points she felt were not adequately considered.

Chairperson Gale asked Director Tyrrell if a new RFP would be required if the Commission decided to change vendors. Director Tyrrell said it was his understanding that the Commission could change the award or re-bid. The Materiel Division would urge a re-bid, to open the field to everybody. Chairperson Gale asked if the Commission should schedule an executive session to adopt a response. Director Tyrrell asked Counsel Widger if the Commission could go into closed session, or if the discussion had to be in open session. Counsel Widger indicated she would review the statute, but if the Commission could go into closed session, it could only discuss the situation in closed session. It could not take a position. Chairperson Gale asked if the Commission could discuss it at its next meeting, or if the timing required that it be addressed at this meeting. Director Tyrrell noted that the next meeting was scheduled for September 15, which was after renewals were usually mailed. The Commission could do an emergency meeting, with an emergency meeting notice, prior to the September meeting. Director Tyrrell noted that renewals were mailed on the last day of October last year. The Commission had time, it was just a matter of what the Commission wanted to do.

Chairperson Gale asked if the Commission was required to respond to a written protest. Director Tyrrell said yes, it should be a written response. Chairperson Gale said that if the Commission decided to uphold its previous decision, it would respond to RISC in writing. If the Commission decided to change the awarding of the contract, that would open the Commission up to a protest from WUGI. Chairperson Gale said it would be difficult to have a new bid. Director Tyrrell said staff would issue the same RFP, then give proposers a month or so to submit their proposals, then the Commission could hold a special meeting to handle review and award of the new bids. Director Tyrrell said he only knew of two proposers, but the Commission could still mail to all 5 potential providers who had asked to be included, and could ask those who submitted bids to do it within 3 weeks or so. Director Tyrrell said he would talk with Don Medinger at the Materiel Division to make sure it was not too short a time for proposals. Chairperson Gale asked if the current coverage expired on 12-31-04. Director Tyrrell said yes. Director Tyrrell had not yet signed the contract with WUGI, because he was waiting for the outcome of this meeting. Currently, the Commission did not have a contract, but had awarded the contract. Director Tyrrell agreed that changing the award could propel the Commission into another protest.

Commissioner Wiebusch asked if the Commission could go into closed session today. Commissioner Strand asked what was the purpose of a closed session. Chairperson Gale said the Commission received a lot of information today, and it would be an opportunity to discuss it off the record. Chairperson Gale said the Commission could also discuss it on the record today. Commissioner Strand asked if the Commission did the initial review in closed session. Director Tyrrell said no.

Commissioner Poskochil asked if it would be appropriate to ask Ms. Rice Grissom a question. Chairperson Gale said he did not know, and asked Counsel Widger. Counsel Widger said she had asked Don Medinger from Material for guidance. The protest was for a provider to provide information and clarify the issues. It was not a negotiating session. If a question got into negotiation, the Commission needed to ask the same questions of WUGI. The Commission was not prohibited from asking questions, but had to be very careful to keep the playing field level. Questions were discouraged, to not approach the verge of negotiation. Commissioner Poskochil said his question was on optional coverages, and that the material previously provided was actually what was understood. His question was regarding savings provided by endorsements. Chairperson Gale said that should be discussed by the Commission. Commissioner Poskochil said he just wanted to ask if those were the coverages.

Counsel Widger said the purpose of the RFP was to inform providers of the services requested. The bid was self-contained. The Commission could not ask additional clarifying questions, because clarifying questions were already asked of both. The more clarifying questions asked of one provider, the more the other provider needed the opportunity to clarify as well. She agreed with Materiel that the more questions were asked, the more the Commission would be going outside of the bounds of the proposals as submitted. She was not sure where to start drawing the line of where to stop and where to ask WUGI. Counsel Widger was concerned with the integrity of the proposal process when a discussion was held with one provider and not the other.

Chairperson Gale said he was a country lawyer, and the Commission was like a jury. They had the information, and now a question was raised. The jury could not take new evidence, but could send a clarifying question to the judge. The Commission needed to keep a firewall between them and new information which might taint the whole process. The Commission might want to stand by the information already received, as a public body following the public bid process. The Commission could discuss whether to have clarification questions submitted to both RISC and WUGI, but they should be submitted in writing and on the record. It was not the same if one question was asked here in conversation, and there were other written questions. Chairperson Gale noted the Commission could meet the following day, if needed.

Counsel Widger noted that if the Commission intended to ask clarification questions in writing, it was not necessary for Ms. Rice Grissom to stay until tomorrow. Ms. Rice Grissom noted she had a scheduling conflict, and her flight would leave soon. Mr. Brooks could represent RISC in her absence. Mr. Brooks said they appreciated and supported the opportunity to further clarify their position. He felt it was certainly in the public interest for the Commission to have the information. Mr. Brooks felt the Commission did not have adequate information when it made the decision. Mr. Brooks said he felt fairness must be maintained at all costs, and heartily endorsed asking the same questions of the other bidder.

Chairperson Gale said the choices were a motion to take up the discussion in executive session tomorrow, a motion to deny the protest, or a motion to re-bid. A response was ultimately required. Director Tyrrell said yes, a response was required, but he was unsure if the discussion could be held in closed session. Counsel Widger said that, at this point, the Commission did not need to make decision, and could address the 11:40 agenda item. Director Tyrrell said the Commission could discuss the issue and make a determination now, or do the 11:40 agenda item now and discuss the protest later today or tomorrow.

Chairperson Gale noted that he and Commissioners Wiebusch and Moline served on the Budget and Planning Subcommittee, and had reviewed the proposals with staff. They had the staff analysis along with their own. Chairperson Gale said he was still comfortable with the analysis, which noted price and coverage issues. The Subcommittee was unanimous to not consider the changes to the RISC proposal, and to not re-bid. Commissioner Moline had done a thorough review of the premium differences, including the points raised today.

Commissioner Moline said he was out getting errors and omissions insurance for HomeServices of Nebraska, and could negotiate with each provider and pick the best deal. RISC provided service for the Commission last year on short notice, which was appreciated. State procurement procedures required that the Commission just use the proposals received. The policies were in legalese, and were deciphered with staff, Counsel Widger, and procurement input. Commissioner Moline felt the decision was still correct. Commissioner Moline had followed the presentation today, and had time to think about it. The Commission ultimately decided on WUGI because the policy was simpler and better for the licensees out there. A big issue was that, with the RISC policy, licensees lost the ability to sell their own home. They got the coverage back in, but with a home warranty required. The Subcommittee went through the proposals as fairly as they possibly could, as they applied to Nebraska, and came up with the best recommendation. Commissioner Moline said his recommendation today was to either re-bid the whole thing, or stay with the same decision. A change would cause more problems down the road. The Subcommittee had listed everything out in the policies, and followed the instructions for the procurement process.

Commissioner Wiebusch said that Commissioner Moline stated it very well. Each Subcommittee member had notes at the subcommittee meeting, and they did a side-by-side comparison. There was discussion and a decision to not use the changes to the RISC proposal, so the Commission did not have to re-bid. The Subcommittee used the bids as submitted. Commissioner Wiebusch said the additional upper limit option was also a discussion topic for the Subcommittee. Commissioner Wiebusch concurred with Commissioner Moline that the Commission should either re-bid or stay with the original decision.

Commissioner Strand said he was trying to give weight to the incumbent for bailing the Commission out, but was persuaded by the Subcommittee that the WUGI policy had enough benefits to outweigh that.

Chairperson Gale said a re-bid was not a small matter, but was not impossible, if the Commission felt those two new items would ultimately have made a difference if they were treated as clarifications rather than changes to the bid. The Commission needed to reflect on whether there was a good reason to re-bid, if that information could be allowed in.

Chairperson Gale said that was the cruel reality of bidding - you gave it your best shot. If somebody made a mistake, they were not able to be a finalist in the bidding. A bidder was not allowed to change a mistake, to keep the process on a level playing field. Chairperson Gale said he was not saying this was a mistake, and noted it was called a clarification, but the reality was that you could not introduce more evidence later.

Commissioner Strand said the way RISC had unbundled services, it made it less apples and oranges, and made for a differently priced product.

Commissioner Shepard said he was not at the Subcommittee meeting or the Commission meeting last month, but he read the information many times. Commissioner Shepard said he did not think he would have made any different decision. If the RFP was re-bid, providers might choose not to bid again. Both providers might walk. Since the Commission was here to protect the public, Commissioner Shepard was not willing to take that chance. There were some semantical differences, but the right decision was made. Commissioner Shepard did not want to put it back out for bid.

Chairperson Gale asked if it was an annual RFP. Director Tyrrell said there was the original RFP plus 5 renewals, but the Commission could put out an RFP any time they chose.

Commissioner Johnson said that one of the factors, that RISC had 13 of 13 state-mandated programs, indicated their price and service was pretty good. Chairperson Gale said he did not think there was any question that RISC was a competitive, quality company. It was not just a matter of coverage and price. Other significant considerations included the deductible, requirements for coverage, trust account coverage, the ability to take credit cards, licensees having a choice of attorney, and being able to purchase a group plan in the company name. They were not all directly dollar amount issues, but substantive coverage issues. Many of the issues weighed in favor of WUGI. Some dollar issues may have been raised, but there would have to be a new RFP. The issues would pretty much remain the same, and were of importance to the Commission. Chairperson Gale said he did not see that the Commission had reached the bar to justify re-bidding.

A motion was made by Moline and seconded by Wiebusch to reaffirm the previous vote to award the errors and omissions insurance plan contract to Williams Underwriting Group Inc. for calendar year 2005. Commissioner Moline offered a friendly amendment to inform RISC and WUGI of the decision, and the amendment was accepted by the seconder. Motion carried with Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye, and with Johnson voting nay.

After discussion, a motion was made by Wiebusch and seconded by Poskochil to adopt the plan as presented. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

No action was necessary on the report.

Director Tyrrell noted that the ARELLO Mid-Year Meeting was held on June 24-27, 2004.

Commissioner Wiebusch said it was nice to meet with the Southern District. Our district met and voted to try to do a joint district meeting every time. The Southern District had invited our district to their meeting in Nashville next July, and Commissioner Wiebusch encouraged the Commissioners to attend. The conferences were better and more substantial if districts did it together, and it built camaraderie between districts. Commissioner Wiebusch encouraged holding combined district meetings in the future. This was a good meeting. Commissioner Wiebusch talked with other ARELLO members about putting together written guidelines for district vice presidents to use for guidance regarding their responsibilities.

Commissioner Johnson said that ARELLO meetings were great. Staff had gone for years, which provided continuity. They knew what was expected of participants. Commissioners passed through in just a few years. The Commission should be proud of Commissioner Wiebusch, who was very active as District Vice President, and spent a lot of time on strategic planning. Commissioner Wiebusch had quite a bit of input, but now that she has learned the ropes, her time was up. That was how it worked. This meeting had excellent outside speakers, and roundtables so that attendees could talk to other jurisdictions. Time limitations prevented doing more. There was value in networking outside the structured meetings. Commissioner Johnson said Nebraska appreciated what Commissioner Wiebusch had done in a short period of time.

Deputy Director Hoffman said people learned more with the districts holding meetings together. The strength was that the meetings were small enough to get acquainted, learn different ways to accomplish goals, and share mistakes and successes. Commissioner Wiebusch had been in charge of the meetings, and handled her responsibilities beautifully without much guidance.

Commissioner Johnson said he found the law committee review very valuable. Tom Miller was very good at that, and he always looked forward to it.

No action was necessary on this report.

Director Tyrrell noted that the ARELLO Annual Meeting registration deadline is August 27, 2004. Director Tyrrell urged the Commissioners to contact Monica regarding registration and make their hotel reservations as soon as possible. Commissioners Johnson, Poskochil, and Shepard, and future Commissioner Grady, were planning to attend.

No action was necessary on this report.

Deputy Director Hoffman attended the Real Estate Educators Association (REEA) meeting, which was held prior to the district meeting. The Association included college professors, publishers, instructors, and regulators. It was a wide and diverse group with a common interest in real estate education. The jurisdictions gave updates on their education programs. 2 or 3 jurisdictions were beefing up post-license education, which was required during the first year after licensure. Approximately the same number were phasing out post-license education, and concentrating on pre-license. It was harder to enforce post-license education, which involved revoking an issued license, than pre-license. People could argue both sides. The issue of having more diverse classrooms was also addressed, with licensees having a wide range of abilities and backgrounds. There was a legal review of recent cases which brought current cases to the classroom. There was also a talent parade, which gave workshop providers 20 minutes to encapsulate their programs, and helped regulators to decide who to book for future instructor development workshops. It was time well spent, and it was nice to be back.

Commissioner Poskochil asked if there were geographic trends among jurisdictions regarding pre-license and post-license education. Deputy Director Hoffman said no, she did not see geographic patterns. People were looking to make education more valuable in both cases, by adding hours and making subjects more substantial, and taking out peripheral subject matter. How jurisdictions were doing it was inconsistent.

No action was necessary on this report.

Director Tyrrell presented the Errors and Omissions Insurance Loss Report - Second Quarter 2004. A copy of said report is attached to and made a part of these minutes.

Director Tyrrell noted that there was nothing unusual in the report. Some were 2004 claims, and others were under the equivalent policies from previous years.

Chairperson Gale noted that most claims were in the $2000 range, except for two, and asked if they were both settled. Director Tyrrell said yes. Commissioner Wiebusch asked about the question marks. Director Tyrrell said that meant they were unsure of the allegations. Ms. Rice Grissom clarified that question marks indicated that, at the time of the report, the person adjusting the claim did not have enough information or was not far into the allegations.

No action was necessary on this report.

Director Tyrrell reported that the amendments to Title 299, Chapter 8, Errors and Omissions Insurance, were approved by the Governor on August 2, 2004, and were effective August 7, 2004.

Chairperson Gale asked about approval timing. Director Tyrrell noted that each level of approval had 45 days, but it was not a drop-dead deadline.

No action was necessary on this report.

Director Tyrrell presented the Trust Account Examination Evaluation Report - Second Quarter 2004. A copy of said report is attached to and made a part of these minutes.

No action was necessary on this report.

Deputy Director Mayrose said the ARELLO Investigator Workshop was held in Denver last weekend, and was well-attended. Content included statement analysis, appraisals, and a legal update. The interaction with counterparts from other jurisdictions was valuable. The presenters were good and made the content interesting.

No action was necessary on this report.

Director Tyrrell presented the Special Resolution honoring Commissioner Wiebusch for her service to the Commission. A copy of said resolution is attached to and made a part of these minutes.

A motion was made by Moline and seconded by Johnson to ratify the resolution, and to give great thanks to Commissioner Wiebusch for her service to the Commission. The Commission adopted the resolution by acclamation, then decided a roll call vote was required. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Gale voting aye, and with Wiebusch abstaining.

Chairperson Gale expressed his appreciation for Commissioner Wiebusch, who could always be counted on as a Commissioner and as Acting Chairperson.

September 15-16, 2004 - Days Hotel Carlisle, Omaha
October 18-19, 2004 - Ramada Limited South, Lincoln
November 18-19, 2004 - Days Hotel Carlisle, Omaha
January 12-13, 2005 - Staybridge Suites, Lincoln
February 15-16, 2005 - Staybridge Suites, Lincoln

Recesses and Adjournment
At 10:03 a.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 10:17 a.m.

At 11:48 a.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 12:03 p.m.

At 12:45 p.m., Chairperson Gale declared a recess for lunch, and reconvened the meeting at 1:35 p.m.

At 3:15 p.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 3:28 p.m.

At 5:10 p.m. on August 17, there being no further business to come before the Commission, a motion was made by Wiebusch and seconded by Moline that the meeting adjourn. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, Wiebusch, and Gale voting aye.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing minutes of the August 17, 2004, meeting of the Nebraska Real Estate Commission were available for inspection on August 31, 2004, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,
Les Tyrrell
Director