2016 ANNUAL REPORT
CULTIVATING Skills and Safety Through providing real jobs for capable people
TECHNOLOGY AND TRAINING
TABLE OF CONTENTS Message from Our CEO . . . . . . . . . . . . . . . . . . . . . . . . . .3 Our Accomplishments and Actions Taken . . . . . . . . . . . . . . . 4 Report to the Community . . . . . . . . . . . . . . . . . . . . . . . . 5 CHEST Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 JOI Safety Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Dominique Calhoun . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Louis Colon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Financial Report Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . 12 Statements of Financial Position . . . . . . . . . . . . . . . . . . . 13 Statements of Functional Expenses (2015) . . . . . . . . . . . . . 14 Statements of Functional Expenses (2016) . . . . . . . . . . . . . 15 Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . 16 Statements of Activities and Changes in Net Assets . . . . . . . 17 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 17
Awards of Merit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Leadership Team and Board of Directors . . . . . . . . . . . . . . 2 1 Maria Trejo: Bruce Whitcomb Wingman Award Recipient . . . . . 22 Our Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Front cover: JOI employee Erica Shelley closely listens and takes notes during a CHEST training program held at Balboa Naval Hospital. Right-hand page: Suzanna Bates and Oscar Galvan are Certified Hospital Environmental Service Technicians working at Balboa Naval Hospital, San Diego.
2 Job Options 2016 Annual Report
GROWING a Culture of Safety, Technology and Training
During this past fiscal year, our management team has been working alongside our employees to sharpen their skills so that we can continue to enhance our contractual performance. This year’s report features two of our initiatives in these areas: our CHEST Program and our progressive JOI Safety Program, which we believe is rated second-to-none in our industry. In fiscal 15/16, we again broke the $50 million mark in annual revenue, exceeding $50.9 million. This milestone was reached in our 29th year of operation thanks to the combined efforts of all of our employees, as we adhere to our mission to “provide real jobs for capable people.” Over the years, our annual report has profiled outstanding Job Option employees. This year we feature Dominique Calhoun, a custodian at the San Ysidro Border Crossing and Louis Colon, a shelf stocker who works at the 32nd Street Commissary. You'll read how Dominique overcame challenges and now has a full, well-rounded and productive life. Likewise, Louis’ unwavering dedication to his job has brought him enormous satisfaction and praises from his peers. We are grateful for their service and dedication to the work they perform.
Jeffrey A. Johnson, CEO
3 Job Options 2016 Annual Report
OUR ACCOMPLISHMENTS AND ACTIONS During our fiscal year 2015–2016, we continued our efforts to operate our businesses in an efficient manner so that we are able to provide exceptional service while operating in a challenging federal government budget environment.
Restructuring Improves the Bottom Line The most significant accomplishment in Fiscal 2015/16 was restructuring our Laundry Operations around a smaller volume so that we could break even. In Fiscal 14/15, the Laundry Division had lost over $870K. We then promoted Nazar Masry to Vice President of Healthcare and Laundry Operations in 2015. He led an effort that significantly reduced our management staff and overall headcount and decreased our Employees costs by over $500,000 in 2016 annually. Nazar also instituted a more proactive preventative maintenance plan that reduced overall repair and maintenance expenses and helped improve plant productivity, which saved an additional $250,000 in annual labor costs. These efforts substantially diminished the losses the division had been incurring and Laundry was profitable over the second half of Fiscal 15/16, while also improving its disabled ratio. Going forward, we
941
will save over $120,000 annually at our San Bernardino Laundry Facility by combining our finishing plant with the Washington Street Facility.
Revenue Growth Surpasses 50 Million We were pleased with fiscal 2015/16 results with revenue of $50.9 million and net contribution of $468K. Net contribution would have been substantially higher had we not been charged an additional $339K workers’ compensation premiums during the year. This fee comprised 23% of our other workers’ compensation expenses and was based on the value of our injuries the last three years. We remain focused on implementing programs to contain the cost of our injuries.
Investment in Training In our largest business sector, Hospital Environmental Services, we continue to invest in technology and training programs that include the certification of large numbers of our frontline housekeepers and floor technicians as Certified Hospital Environmental Service Technicians
2015/2016 Revenue
Employee Growth 2000–2016 1000
2% Administrative
16% 1%
Commissary
Linen Sales
10% Laundry
$50.9 MILLION
18% Food Service
Number of Employees
Facilities
16%
800 600 400 200 0
37%
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Year
Hospital EVS
4 Job Options 2016 Annual Report
TAKEN
REPORT TO THE COMMUNITY
(CHEST), a program developed by the Association for Healthcare Environment (AHE). It covers all aspects of a frontline worker’s typical tasks and will increase the effectiveness and productivity of our workforce. We have also invested in a program called Virtual Manager at our hospital sites, using handheld devices for our housekeepers and floor technicians to perform real-time updates on the work they have completed. This helps us to better balance work assignments and document task completion at specific times. These programs prepare us for the challenges and opportunities that we will face this next year. Soon operations at Weed Army Hospital at Fort Irwin will substantially increase as a much larger facility of over 200,000 square feet opens this summer. Our contract will more than double and our revenue base in this division will then annualize over $20 million. Overall, the AbilityOne program that we operate under has shown little growth over the past year. The program has been suffering from adverse publicity over the last several years regarding compliance issues among a few of the 500 or so not-for-profits that manage over 2,300 projects in the program. Regarding JOI’s compliance, we received our annual field audit from SourceAmerica in September and the results showed no outstanding issues.
E
ntering our 30th year as a San Diego-based not-for-profit, our mission continues to focus on providing meaningful employment for disabled individuals in janitorial, food service, laundry, administrative services, hospital environmental services, commissary inventory management and shelfstocking. The majority of our employment opportunities result from contracts with agencies within the federal government that are offered under the provisions of the AbilityOne Act. This program enables certain government contracts to be set aside for not-for-profit companies, such as ours, that primarily employ individuals with disabilities. These individuals must work a minimum of 75% of the direct labor hours expended under these contracts. We have long-term contracts with the U.S. Department of Defense, General Services Administration, Veterans Administration and Homeland Security (U.S. Customs and Border Protection). Our largest customer is the Department of Defense. We have a substantial presence at many of the Navy and Marine Corps bases throughout Southern California, as well as Navy and Army hospitals and medical clinics in California, Georgia and Florida. Approximately 90% of our current employees work for us under contracts we have with federal agencies, with the remainder working under commercial contracts. Over the past 11 years, our annual rate of growth has been approximately 7 percent. In fiscal 2015/16, revenues grew to $50.9 million. JOI is entirely self-funded through the contractual revenue received from various government and commercial accounts. We are not dependent on any gifts or grants to fund our operations. As such, it is our responsibility to operate within our budgetary confines. The company is comprised of seven divisions: Hospital Environmental Services, Facilities, Food Services, Professional/Administrative, Laundry, Linen Sales and Commissary Services.
Historical Revenue 2000–2016 50
Revenue In Millions ($)
40 30 20 10 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Year
5 Job Options 2016 Annual Report
COMMITTED
“
The CHEST certification program emphasizes the vital importance of our ESTs’ performance, adding to their sense of pride and job satisfaction. They are keenly aware of the tremendous value this training will give them to best serve their patients.
”
Nazar Masry, VP of Healthcare and Laundry Operations
JOI Environmental Services employees celebrate the completion of the CHEST training in front of Balboa Naval Hospital.
CHEST Program
A
t the end of 2016, we implemented the Certified Healthcare Environmental Services Technician (CHEST) training program. Developed by the Association for the Healthcare Environment (AHE), the program strengthens the skills of our frontline healthcare environmental services technicians (EST) while specifically addressing the “Triple Aim” in healthcare: to improve the patient-care experience, improve overall population health and reduce the per capita cost of healthcare. Meticulously trained ESTs perform potentially life-saving work and are the “only thing standing between patients and an environment contaminated with potentially harmful, resistant bacteria.” AHE has used evidence-based research and cleaning practices to formulate the curriculum for the certification. There’s a growing need to address the essential and evolving job tasks, requisite skills and knowledge needed by healthcare environmental services technicians in order to operate effectively and safely. The program focuses on topics such as infection prevention, disinfection, working safely and responsibly, waste removal, and effective communication.
The program consists of 24 hours of interactive classroom training followed by a knowledge assessment test. Certifications are in effect for three years and must be renewed by participation in continuing education courses or through further testing. We plan to implement this program at each of our healthcare facilities. These include the Naval Medical Center in San Diego, Martin Army Community Hospital in Fort Benning, Georgia and Weed Army Community Hospital in Fort Irwin, California. JOI supervisors go through rigorous training to teach the course to our technicians. In 2017, over 100 employees will become Certified Healthcare Environmental Services Technicians. “As health organizations continue to focus on cost, quality and outcomes, research and evidence supports the emergence of the healthcare environment as a critical force in patient and employee safety and satisfaction. The new program solidifies the role of the environmental services technician in the patient care team and validates their competency.” Association for Healthcare Environment.
6 Job Options 2016 Annual Report
TO STRENGTHENING OUR SKILLS AND SAFETY PROGRAMS
JOI Safety Program
W
“
We will always make sure employee health and safety is our No. 1 priority at Job Options. Gladis Jarquin, Administrative Services Division Manager and Safety Officer
”
e have been busy this past year strengthening our Safety Department by providing the resources and tools necessary to enhance our program. As with all businesses, employees are a company’s most valuable resource; therefore, the key to maintaining a safe and healthy workplace is to encourage employee engagement and provide ongoing education and training. In addition to appointing Leora Alvarez as Safety Compliance Training Administrator, our team launched “Road to Safety,” an employee portal website. It is a resource for both management and line staff to have access to training materials, guides and checklists. The site allows employees to quickly access safety tips, suggestion forms, a photo gallery of safety events and other valuable resources. The site also features a “Safety Wall of Fame” which recognizes employees who go above and beyond their safety accomplishments on their job. In addition to being an effective tool to increase employee safety engagement, the website also provides our customers with evidence that Job Options is committed to the safety of our employees, which helps support the control of escalating workers’ compensation costs. This is very important to our customers as workers’ comp costs are incorporated into the overall contract budget. Each one of over 900 employees is trained on a variety of safety topics every month. Additionally, new hires receive New Employee Safety Orientations specific to their worksite. We track safety compliance at each of our contract locations on a monthly basis. We celebrate “Safe Days at Work” and have a company-wide event each year providing employees with opportunities to win prizes and receive recognition for a job well done.
7 Job Options 2016 Annual Report
DOMINIQUE CALHOUN San Ysidro Land Port of Entry Environmental Services
“
For more than six years, Dominique has worked at the border and has been a great addition to our team. He completes the tasks assigned to him and takes pride in ensuring all areas he is responsible for exceed our customer’s expectations. He provides exceptional customer service for the Department of Homeland Security.
”
Anthony Enriquez, Project Manager, San Ysidro Land Port of Entry
D
ominique is the model of a person who overcame
After six years of service as a janitor at the San
adversity at every level and persevered. Belittled
Ysidro Border Crossing, Dominique has been lauded
by teachers and so-called friends; homeless for a time,
by his supervisor for his ability to surpass customer
Dominique fought off the negativity in his life and
expectations. As a diligent employee, he takes time
was determined to change. Despite his disabilities, he
to encourage and support co-workers, offering to
learned to read, received his high school diploma and
assist them with their tasks. With his difficult early
took college courses. It was a chance introduction to
years behind him, he is thankful that Job Options
a work program that led Dominique to apply at Job
has given him the opportunity to build a productive
Options. He credits JOI for helping to change his life
life. Dominique and his wife Ebony (who works as a
for the better.
caregiver) are hoping to adopt an orphan in the future.
The San Ysidro Land Port of Entry is the busiest land border in the world, with more than 30 million people crossing into the U.S. from Mexico alone each year. 8 Job Options 2016 Annual Report
“
I never gave up.
”
9 Job Options 2016 Annual Report
Louis Colon 32nd Street Naval Commissary Commissary Services
“
Giving great customer service has always been our foremost goal. I am grateful for Louis’ dedication and commitment to his work. He has been a stellar employee and a great contributor to the success of our team.
”
Gregory Bisbee, Commissary Division Manager
L
ouis is a shelf stocker at the 32nd Street Naval Commissary–the largest in the nation. With 126,000
square feet filled with everything one would need on their grocery list, Louis’ job is to see that all the shelves in his department are not only filled, but also stacked with precision. On a normal day, there are 15 workers on one side of the commissary replenishing the stock. On the other side: Louis.
Louis’ supervisor, Greg Bisbee, remarked that Louis
not only wants to work seven days a week, but when he does take a day off, it takes four employees to complete the work he usually does on his own.
He is respected by JOI management and our federal
government customer for his excellent memory and near-perfect accuracy when shelf stocking all available product for over 20,000 line items.
When Louis is not working, you can find him using
the carpentry skills he learned from his father to make furniture. He also enjoys swimming and often goes beyond the surfline to swim closer to the porpoises. But his current and most important downtime activity is planning his upcoming wedding with his fiancée, Fanny.
10 Job Options 2016 Annual Report
“My favorite cereal is Reese’s Puffs.” Like all great shoppers, he buys them on sale.
“
I enjoy my work and try to always do my best.
”
11 Job Options 2016 Annual Report
Table of Contents Statements of Financial Position
13
Statements of Functional Expenses (2015)
14
Statements of Functional Expenses (2016)
15
Statements of Cash Flows
16
Statements of Activities and Changes in Net Assets
17
Notes to Financial Statements
17
Independent Auditor’s Report Board of Directors Job Options, Inc. San Diego, California
Report on the Financial Statements We have audited the accompanying financial statements of Job Options, Inc. which comprise the statement of financial position as of September 30, 2016, and the related statements of activities and changes in net assets, functional expenses, and cash flows for the fiscal year then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Job Options, Inc. as of September 30, 2016, and the changes in its net assets and its cash flows for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.
Prior Period Financial Statement The financial statements of Job Options, Inc. as of, and for the year ended, September 30, 2015, were audited by other auditors whose report dated January 22, 2016, expressed an unmodified opinion on those statements.
San Diego, California January 22, 2016
12 Job Options 2016 Annual Report
Statements of Financial Position For the fiscal years ended September 30, 2016 and 2015
Assets
2016
2015
Cash and cash equivalents (Note 3)
$ 3,574,516
$ 1,971,881
Contracts receivable, net (Note 4)
6,389,468
7,142,454
Other receivables
106,020
191,720
Prepaid expenses
232,377
344,227
10,302,381
9,650,282
Fixed assets, net of depreciation (Note 6)
3,975,262
4,654,626
Deposits
95,657
111,513
Other assets
5,000
5,000
Total Assets
$ 14,378,300
$ 14,421,421
Liabilities and Net Assets
2016
2015
Accounts payable and other liabilities
$ 2,034,472
$ 1,806,701
Accrued payroll and payroll related expenses
3,138,247
3,197,263
Current portion of capital lease obligations (Note 7)
391,313
539,238
Current portion of notes payable
265,444
1,223,973
5,829,476
6,767,175
Capital lease obligations, net of current portion
178,733
570,046
Notes payable, net of current portion
1,106,934
270,699
1,285,667
840,745
7,115,143
7,607,920
Current assets:
Total current assets
Current liabilities:
Total current liabilities Long-term liabilities (Note 7)
Total long-term liabilities Total liabilities
Net assets Unrestricted Total net assets Total Liabilities and Net Assets
13 Job Options 2016 Annual Report
7,263,157
6,813,501
7,263,157
6,813,501
$ 14,378,300
$ 14,421,421
Statements of Functional Expenses For the fiscal year ended September 30, 2015
2015 Program Services
Management and General
Total
Salaries and wages
$ 21,883,089
$ 2,393,778
$ 24,276,867
Employee payroll benefits
11,385,928
547,358
11,933,286
Supplies and inventory costs
1,910,616
39,599
1,950,215
Equipment costs
274,594
18,716
293,310
Building repairs and maintenance
6,033
2,255
8,288
Utilities
647,220
58,628
705,848
Telephone
100,716
11,366
112,082
Office supplies
67,473
106,927
174,400
Travel and entertainment
161,352
137,525
298,877
Building rent
314,039
144,559
458,598
SourceAmerica commission
1,734,209
–
1,734,209
Insurance
256,675
178,180
434,855
Bank charges
69,027
206,142
275,169
Licenses and taxes
18,585
23,854
42,439
Professional fees
7,051
411,269
418,320
Dues and subscriptions
2,200
5,815
8,015
Bad debt expense
–
77,235
77,235
Outside services
400,910
–
400,910
Loss on inventory
(12,427)
(16,503)
(28,930)
Indirect costs
10,000
–
10,000
Miscellaneous
2,497
4,393
6,890
Depreciation
907,368
11,159
918,527
Total Expenses
$ 45,676,669
$ 4,362,255
$ 50,038,924
14 Job Options 2016 Annual Report
Statements of Functional Expenses For the fiscal year ended September 30, 2016
2016 Program Services
Management and General
Total
Salaries and wages
$ 21,621,375
$ 2,265,238
$ 23,886,613
Employee payroll benefits
11,868,369
658,741
12,527,110
Sub-contractor services
5,975,606
–
5,975,606
Supplies and inventory costs
2,311,506
69,806
2,381,312
Equipment costs
351,735
23,492
375,227
Building repairs and maintenance
8,766
2,109
10,875
Utilities
605,354
41,686
647,040
Telephone
114,082
16,751
130,833
Office supplies
76,162
112,225
188,387
Travel and entertainment
146,687
71,728
218,415
Building rent
309,439
188,331
497,770
SourceAmerica commission
1,735,401
–
1,735,401
Insurance
250,010
216,662
466,672
Bank charges
71,980
155,661
227,641
Licenses and taxes
28,392
37,647
66,039
Professional fees
34,906
203,002
237,908
Dues and subscriptions
10,937
3,372
14,309
Bad debt expense
–
124,325
124,325
Gain (loss) on sale of asset
(21,502)
–
(21,502)
Outside services
331,402
–
331,402
Miscellaneous
3,298
8,296
11,594
Depreciation
894,109
9,600
903,709
Total Expenses
$ 46,728,014
$ 4,208,672
$ 50,936,686
15 Job Options 2016 Annual Report
Statements of Cash Flows For the fiscal years ended September 30, 2016 and 2015
2016
2015
Change in net assets
$ 449,656
$ 436,344
Adjustments to reconcile change in net assets to net cash
Depreciation
903,709
918,527
Loss on disposal of asset
21,502
62,985
Reserve for bad debt
135,761
–
Contracts receivable
617,225
(1,871,265)
Other receivables
85,700
(63,396)
Prepaid expenses
111,850
(94,345)
Deposits
15,856
–
Accounts payable and other liabilities
227,771
706,283
Accrued payroll and payroll related expenses
(59,016)
566,831
2,510,014
661,964
(339,634)
(520,984)
(339,634)
(520,984)
Proceeds from notes payable
1,142,953
428,351
(Payments) for capital leases and notes payable
(1,804,485)
(966,230)
(661,532)
(537,879)
Net change in cash and cash equivalents
1,508,848
(396,899)
Cash and cash equivalents, beginning of year
1,971,881
2,368,780
Cash and cash equivalents, end of year
3,480,729
1,971,881
$ 171,160
$ 220,355
Cash flows from operating activities:
from operations:
(Increase) decrease in operating assets:
Increase (decrease) in operating liabilities:
Net cash flows provided by operating activities Cash flows from investing activities: Purchase of fixed assets Net cash flows used in investing activities Cash flows from financing activities:
Net cash flows used in financing activities
Supplemental disclosures: Cash Paid for Interest
16 Job Options 2016 Annual Report
Statements of Activities and Changes in Net Assets For the fiscal years ended September 30, 2016 and 2015
2016
2015
Contract revenue
$ 50,932,827
$ 50,471,622
Interest and investment income
3,515
3,646
Gain on litigation settlement
450,000
–
Revenues
Total Revenue
51,386,342
50,475,268
Expenses Program services
46,728,014
45,676,669
Management and general
4,208,672
4,362,255
50,936,686
50,038,924
Change in unrestricted net assets
449,656
436,344
Net Assets, Beginning
6,813,501
6,377,157
Net Assets, Ending
$ 7,263,157
Total Expenses
$ 6,813,501
Notes to Financial Statements Note 1 Organization
all activities of the Organization, and are not subject to donor-imposed stipulations. These generally result from revenues generated by providing services, receiving unrestricted contributions, and receiving interest from investments, less expenses incurred in providing program-related services, raising contributions, and performing administrative functions. Temporarily Restricted Net Assets: Net assets that are subject to donorimposed stipulations that will be met either by actions of the Organization and/or the passage of time. When a donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the statement of activities as net assets released from restrictions. There were no temporarily restricted assets as of September 30, 2016 and 2015. Permanently Restricted Net Assets: Net assets that are subject to donorimposed stipulations that the restrictions be maintained permanently by the Organization. Generally, the donors of these assets permit the Organization to use all or part of the income earned on the related investments for general or specific purposes. There were no permanently restricted assets as of September 30, 2016 and 2015. c. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Job Options, Inc. (the “Organization”) is a not-for-profit entity that contracts with federal agencies and private companies to provide a variety of services, including janitorial, grounds maintenance, shelf stocking, and laundry throughout Southern California, Utah, and Georgia. Work is performed primarily under time and material and negotiated price contracts. The workforce consists principally of capable individuals with severe mental, physical, or psychological disabilities. On-the-job training and continued support is provided to assist employees in reaching their fullest potential. The Organization works closely with the Department of Rehabilitation and other non-profit agencies that assist individuals with disabilities and currently employs over 950 individuals. Job Opportunities, Inc. (the "Company") is a for-profit corporation that is 100% wholly owned by the Organization. The Company was incorporated March 13, 2010, in the State of California. The purpose of the Company is to provide vocational rehabilitation services on contracts that may not be available for the Organization. The investment in the Company is $5,000 and is reflected on the statements of financial position as other assets. The Company had no activity for the fiscal years ended September 30, 2016 and 2015.
Note 2 Summary of Significant Accounting Policies a. Accounting method - basis of accounting The financial statements were prepared in accordance with accounting principles generally accepted in the United States of America as applicable to not-for-profit organizations. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported on the financial statements. Basis of accounting relates to the timing of measurement made, regardless of the measurement focus applied. The Organization uses the accrual basis of accounting. Revenues are recognized when they are earned and expenditures are recognized in the accounting period in which the liability is incurred. b. Financial statement presentation The financial statements are presented in conformity with Accounting Standards Codification (ASC) 958-205, Not-For-Profit Entities – Presentation of Financial Statements. Under ASC 958-205, the Organization reports information regarding its financial position and activities according to three classes of net assets: Unrestricted Net Assets: Unrestricted net assets are available to support
d. Income taxes The Organization is exempt from income taxes under Internal Revenue Code Section 501(c)(3). It is, however, subject to income taxes from activities unrelated to its tax-exempt purpose. The Organization uses the same accounting methods for tax and financial reporting. Generally accepted accounting principles (GAAP) provides accounting and disclosure guidance about positions taken by an entity in its tax returns that might be uncertain. Management has considered its tax positions and believes that all of the positions taken in its federal and state exempt organization tax returns are more likely than not to be sustained upon examination. The Organization’s returns are subject to examination by federal and state taxing authorities, generally for three years and four years, respectively, after they are filed.
17 Job Options 2016 Annual Report
e. Cash and cash equivalents Cash and cash equivalents are from time to time variously composed of cash on hand, cash in banks, and liquid investments with original maturities of three months or less. There were no cash equivalents for the fiscal years ended September 30, 2016 and 2015. f. Contracts receivable Contracts receivable consists of balances due for services provided pursuant to written and verbal contracts with various public and private agencies. Generally accepted accounting principles in the United States of America require that an allowance for doubtful accounts be established for accounts receivable. It is the Organization’s policy to evaluate the collectability of receivables on a regular and ongoing basis, if deemed necessary, an adjustment to the allowance for bad debt account is recorded. Accordingly, contracts receivable are shown net of an allowance for doubtful accounts. g. Inventory Inventory consists primarily of laundry items, hospital items, amenities, and other various rental items. The values of the inventory are stated at the lower of cost or market value. Costs are determined using the first-in, first-out method. h. Fixed assets Fixed assets are recorded at cost and depreciated under the straightline method over their estimated useful lives of 3 to 15 years. Repair and maintenance costs, which do not extend the useful lives of the asset, are charged to expense. The cost of assets, sold or retired, and related amounts of accumulated depreciation are eliminated from the accounts in the year of disposal, and any resulting gain or loss is included in the earnings. Management has elected to capitalize and depreciate all assets costing $1,000 or more; all other assets are charged to expense in the year incurred. i. Reclassifications Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported net assets or changes in net assets. j. Retirement Plans The Organization has five departments, NMC, Georgia, Fort Irwin, VAM, and Food Service, which are covered under union contracts for health and welfare and pension benefits. Contributions for these benefits are carried in employee benefits. Contributions of varying amounts for health and welfare are paid to outside administrators. These contributions are also carried in employee benefits. See Note 9 for additional information. k. Functional allocation of expenses The costs of providing the program services have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the program services based on direct costs and management’s estimates of the usage of resources.
Note 3 Cash and Cash Equivalents
2016
Petty cash Total Cash and Cash Equivalents
2016
2015
Accounts receivable - contracts
$ 5,831,029
$ 6,628,796
Accounts receivable REAs/Claims pending
694,200
583,658
Less: allowance for doubtful accounts
(135,761)
(70,000)
$
$
Total Contracts Receivable
6,389,468
7,142,454
Consistent with generally accepted accounting principles in the United States of America, contracts receivable as of September 30, 2016 and 2015, are shown net of an allowance for doubtful accounts in the amount of $135,761 and $70,000, respectively. The Organization recorded bad debt expense of $124,325 and $77,235 for the fiscal years ended September 30, 2016 and 2015, respectively.
Note 5 Equipment Settlement In November 2013, the Organization initiated litigation against a former laundry customer to recover the loss of equipment previously written off in 2013. In March of 2016, litigation settled in the amount of $450,000. This amount is included as Gain on Litigation in the Statement of Activities and Changes in Net Assets.
Note 6 Fixed Assets Fixed assets at September 30, 2016 and 2015, consisted of the following: 2016
2015
Land
$ 100,539
$ 100,539
Buildings
1,439,789
1,439,789
Leasehold improvements
554,934
541,098
Furniture and fixtures
63,238
61,080
Equipment
8,785,668
8,774,772
Automobiles
738,439
595,797
(7,707,345)
(6,858,449)
$ 3,975,262
$ 4,654,626
Total fixed assets, net of depreciation 2015
During the fiscal years ended September 30, 2016 and 2015, $884,952 and $918,527, were charged to depreciation expense respectively.
Deposits:
Cash on hand
Contracts receivable at September 30, 2016 and 2015, consisted of the following:
Less: accumulated depreciation
Cash at September 30, 2016 and 2015, consisted of the following:
Cash in banks
Note 4 Contracts Receivable
$ 3,573,666
$ 1,971,031
850
850
$ 3,574,516
$ 1,971,881
Note 7 Long-Term Liabilities
Cash balances held in banks are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). The Organization maintains its cash in bank deposit accounts that at times may exceed federally insured limits. At September 30, 2016 and 2015, the Organization had $3,442,981 and $1,787,896, respectively, of funds in excess of FDIC insurance limits.
a. Capital leases The Organization entered into various capital lease agreements with Tetra Financial Group that mature on May 1, 2018, for assets purchased with an aggregate cost value of $1,390,046. Effective interest rates range from 8.14% to 10.58%. Included in the purchase price is sales tax. The outstanding principal balance on this capital lease as of September 30, 2016 and 2015 was $309,503 and $677,623, respectively. The Organization entered into a capital lease with Celtic Leasing during the fiscal year ended September, 30, 2012, that matured on December 30, 2015, for assets purchased with an aggregate cost value of $900,947 including sales
18 Job Options 2016 Annual Report
tax. The effective interest rate is 4.615%. The outstanding principal balance on this capital lease as of September 30, 2016 and 2015, was $0 and $61,256, respectively. In July 2014, the Organization entered into a lease/purchase agreement with U.S. Bank that matures on August 20, 2018, for equipment purchased with an aggregate cost value of $70,519. Effective interest rate is 5.51%. Included in the purchase price is sales tax. The outstanding principal balance on this capital lease as of September 30, 2016 and 2015 was $34,421 and $51,689, respectively. The Organization entered into two equipment finance agreements with Regents Capital Corporation for assets purchased with an aggregate cost value of $384,941. The agreements mature on December 1, 2018 and March 8, 2019, respectively. Effective interest rates range from 4.926% to 4.998%. Included in the purchase price is sales tax. The outstanding principal balance on these capital leases as of September 30, 2016 and 2015, was $226,122 and $318,716. Debt service requirements for the capital leases as of September 30, 2016, are as follows: Year ending September 30
Principal
2017
$ 418,067
2018
158,169
2019
27,142
Total net minimum lease payments
603,378
Amount representing interest
(33,332)
Present value of net minimum lease payments
570,046
Less current portion
(391,313)
Long Term Portion
$ 178,733
Year ending September 30
Principal
Interest
Total
2017
$ 265,444
$ 87,984
$ 265,444
2018
222,784
71,339
222,784
2019
136,396
56,509
136,396
2020
135,478
47,949
135,478
2021
98,025
44,280
98,025
Thereafter
514,251
48,979
514,251
Total
$ 1,372,378
$ 357,040
$ 1,372,378
Long-term liabilities activity Long-term liabilities activity includes debt and other long-term liabilities. Changes in obligations for the fiscal year ended September 30, 2016, are as follows: Balance (2015) Capital leases
Due in one year
Payments $ (539,238)
$ 570,046
$ 391,313
(1,265,247)
1,372,378
265,444
$ (1,804,485)
$ 1,942,424
$ 565,757
$ 1,109,284
–
Notes Payable
Total
$ 2,603,956
1,494,672
Balance (2016)
Additions
1,142,953
$ 1,142,953
Note 8 Health and Welfare Pension Plan Included in accounts payable and other liabilities as of September 30, 2016 and 2015, were $420,092 and $530,559, respectively, due to various trusts for health and welfare pensions. Included in employee benefits expense were $5,927,102 and $5,632,248 of health and welfare benefits for the fiscal years ended September 30, 2016 and 2015, respectively.
b. Notes payable In 2004 the Organization entered into a construction loan agreement with Capital Impact Partners, formerly, NCB Development Corporation, in the amount of $181,571 for the construction of a facility. During the year ended September 30, 2005, additional proceeds of $503,429 were added to the loan. During the year ended September 30, 2007 additional proceeds of $433,906 were added to the loan. Effective interest rate was 8.375 % through April 7, 2011, at which point the interest rate will fluctuate at 3.5% over the weekly average yield of U.S. Treasury Securities. The current interest rate is 5.75%. On April 7, 2016, the loan was refinanced at 6.25% for 10 years with a maturity date of May 1, 2026. The outstanding principal balance on this note payable as of September 30, 2016 and 2015, were $674,945 and $688,038, respectively. On January 17, 2006, the Organization entered into a loan agreement with Capital Impact Partners, formerly, NCB Development Corporation, for $582,500. The interest rate started at 8.25% and on April 7, 2016, the interest rate was revised to 5.50%. Principal and interest in the amount of $4,867 will be paid monthly with any accrued interest and principal balance due in full on the maturity date of May 1, 2021. The balance as of September 30, 2016 and 2015, was $313,631 and $379,431, respectively. The Organization entered into a loan agreement with King Commercial Finance for the purchase of equipment in the amount of $569,130 that will mature May 1, 2018. The interest rate is 7.13% per annum. The loan calls for one payment at $8,846, three payments of $8,999, one payment of $9,402 and 55 payments of $11,466. The outstanding principal balance on this note payable as of September 30, 2016 and 2015, was $215,652 and $333,273, respectively. The Organization has various car loans outstanding with maturities through 2018. The outstanding principal balance on these loans as of September 30, 2016 and 2015, was $168,150 and $93,929, respectively. Debt service requirements for the notes payable as of September 30, 2016, are as follows:
Note 9 Operating Leases The Organization leases facilities under separate lease arrangements for more than one year. The future minimum lease payments are as follows: Year ending September 30
2017
$ 586,074
Lease Payments
2018
470,861
2019
262,977
2020
188,021
2021
1,374
Total future lease payments
$ 1,509,307
The Organization receives no sublease rental revenues nor pays any contingent rentals associated with these leases. For the fiscal year ended September 30, 2016 and 2015, operating lease expense was $497,770 and $458,598, respectively.
Note 10 Subsequent Event The Organization’s management has evaluated events or transactions that may occur for potential recognition or disclosure in the financial statements from the balance sheet date through March 3, 2017, which is the date the financial statements were available to be issued. Management has determined that there were no subsequent events or transactions that would have a material impact on the current year financial statements.
19 Job Options 2016 Annual Report
2015 SourceAmerica National Performance Excellence Award Government Contracting 2015 Employer of the Year City of San Diego Committee on Employment of People with Disabilities
2009 NISH National Business Innovation Award 2008 NISH Board Award for Performance Excellence Randy Williams
2014 SourceAmerica National William M. Usdane Award Yolanda Richardson
2006 Governmental Relations Grassroots Excellence Award
2014 SourceAmerica Pacific West Region Evelyne Villines Award Elizabeth Coss
2006 NISH National Business Innovation Award
2014 NCSE Management Excellence Award Pacific West Region Doug Baker 2013 GSA Region 9 NISH Performance Award 2013 CIMS GB Certification with Honors Hospital Environmental Services and Facilities Division
2006 NAVFAC SW FEAD SD Safety Award Facilities Maintenance Category Janitorial Services for Naval Medical Center San Diego 2005 NISH National William M. Usdane Award James Bandy 2004 Fastest-Growing Company Award San Diego Business Journal 2002 NISH National Evelyne Villines Award Jim Smith
AW AR D S
2012 NISH Pacific West Region Evelyne Villines Award Steve Credle
2010 NISH Pacific West Region William M. Usdane Award Rosamaria Santana
2012 NCWC Management Excellence Award – West Region Carol Whiteley 2011 Chula Vista Laundry Plant Accreditation Healthcare Laundry Accreditation Council
20 Job Options 2016 Annual Report
Marcy McCabe Contracts Manager mmccabe@joboptionsinc.org
Verlyn Soderstrom Bruce Whitcomb, Director Emeritus Richard Woodaman
Dr. William Mead Associate Director bmead@joboptionsinc.org Juan Agundis Director of Information Technology jagundis@joboptionsinc.org Doug Baker Food Service Division Manager dbaker@joboptionsinc.org
Gregory Bisbee Commissary Division Manager gbisbee@joboptionsinc.org Veronica Serrano Contracts Manager vserrano@joboptionsinc.org
Nazar Masry Healthcare and Laundry Services Vice President nmasry@joboptionsinc.org
IP
Pamela Ross
Valorie Seidl Human Resources Director vseidl@joboptionsinc.org
SH
Patrick O'Sullivan
William Eastwood Associate Director beastwood@joboptionsinc.org
Gladis Jarquin Administrative Services Division Manager and Safety Officer gjarquin@joboptionsinc.org Jounina Boka Financial Controller jboka@joboptionsinc.org Steve Credle PTS Administrator and Purchasing Agent scredle@joboptionsinc.org
ER
Deborah Martinez-Shriver
Joe Ryan Director of Linen Sales jryan@joboptionsinc.org
D
Kathleen Leverette
Jeffrey Johnson Chief Executive Officer jjohnson@joboptionsinc.org
A
Dr. Richard Skay, Chairman
Hugo Mezamartinez Laundry Division Manager hmezamartinez@joboptionsinc.org
LE
BO A
R
D
Margaret-Ann PeĂąa NAVFAC Division Manager and Facilities Division Manager mpena@joboptionsinc.org
21 Job Options 2016 Annual Report
MARIA TREJO HONORED WITH wingman award
Pictured from left to right: Nancy Whitcomb, Bruce Whitcomb, Maria Trejo, Jeff Johnson.
M
aria Trejo, a dedicated Customer Service Representative at the Otay Mesa SENTRI Enrollment Center, was awarded the very first Bruce Whitcomb “Wingman” Award for 2016. The Wingman Award was established in honor of Job Options’ former Board President, Bruce Whitcomb, who retired from BRUCE WHITCOMB his position in December 2015 following over 20 A W A R D years of service. To be considered, each year Project Managers are asked to nominate a staff member who has shown outstanding character and commitment to performing in an exemplary
W WINGMAN
manner. It is clear from the nomination that she well deserves to be the first recipient of this award. Maria is consistently the first person to ask a co-worker
if she can help them and is always striving to make sure every customer, especially those that are elderly or challenged in any way are assisted quickly. Simply put, she is a kind soul and a person who puts the interests of others before her own. Two years ago, following the birth of her first baby, Maria and her husband experienced an extremely challenging time due to their daughter suffering from medical complications. Thankfully her daughter recovered, yet Maria never let it interfere with the quality of her work despite the heavy burden she and her husband were shouldering. She has shown true character and strength as she continued to show up to work with a positive attitude. Over the years, Maria has expressed her deep gratitude and appreciation for having been hired at Job Options. She takes nothing for granted and is thankful for the opportunity to help provide for her family. Thank you, Maria, for all that you do for Job Options, SENTRI and your family. Congratulations on this well-deserved honor!
22 Job Options 2016 Annual Report
JOI services Administrative Services
Medical Waste Transfer and Disposal Office/Administrative Cleaning Operating and Emergency Room Cleaning Patient Room Cleaning
Bilingual Services Customer Service Data Entry Office Support Project Management Word Processing
Hospitality and Food Services Cashiering Cooking and Baking Food Ordering Food Service Budget Development Inventory Procurement Kitchen Cleaning Menu Planning Plate and Silverware Bar Replenishment Pot Washing Restaurant Area Cleaning Scullery Self-Serve Bar Replenishment Silverware and Table Setting Replenishment Table Busing and Cleaning
Building and Custodial Services Carpet Cleaning and Bonneting Common Area Cleaning Floor Maintenance Food Preparation Area Cleaning Furniture and Office Cleaning Restroom Cleaning, Sanitizing and Re-Supply Waste Container Maintenance Window Cleaning Vacuuming and Dusting
Commissary and Warehousing Forklift Handling Inventory – Tracking, Management and Order Writing Material Management and Logistics Shelf-Stocking Truck Loading and Unloading
Laundry Services
Beds Maintenance Lawn Care – Planting, Trimming, Weeding, Watering Irrigation Systems Street Sweeping
Customer Inventory Drying Flat Work and Finishing Folding and Packaging Full Rental and COG Pick-up and Delivery Soil Sorting Steam Cleaning Washing
Hospital Environmental Services
Linen Sales Services
Clinic, Pharmacy and Laboratory Cleaning Exam/Treatment Room Cleaning Labor and Delivery Room Cleaning
Assisted-Living Facilities Linens Dust Control Linens Hotel, Resort and Spa Linens
Grounds and Landscape Maintenance
23 Job Options 2016 Annual Report
PROVIDING REAL JOBS FOR CAPABLE PEOPLE
ISO 9001:2008 Certification
CORPORATE OFFICE
LAUNDRY PLANT
LAUNDRY PLANT
FOOD SERVICES
3465 Camino Del Rio South Suite 300
Chula Vista Plant
San Bernardino Plant
San Diego, CA 92108
2248 Main Street, Suite 10 Chula Vista, CA 91911
1110 S. Washington Avenue San Bernardino, CA 92408
560 Greenbrier Drive Suite 103 Oceanside, CA 92054
T 619.688.1784
T 619.575.7627
T 909.890.4612
F 619.688.9884
F 619.424.8768
F 909.890.4673
E info@joboptionsinc.org W joboptionsinc.org
COMET CREATIVE Concept, Graphic Design NANETTE NEWBRY Creative Direction RICHARD DOWDY STEVE WHALEN Photography ©2017 Job Options, Inc. 04/17
T 760.547.2480 F 760.547.2485