ANNUAL REPORT 2015
TABLE OF CONTENTS
Introduction from Jeff Johnson
3
Our Accomplishments and Actions Taken
4
Report to the Community
5
Christopher Thomas
6
Terry Brewer
8
Martin Army Community Hospital
10
Kim Kramer
11
Financial Report Independent Auditor’s Report
12
Statements of Financial Position
13
Statement of Functional Expenses (2014)
14
Statement of Functional Expenses (2015)
15
Statements of Cash Flows
16
Statement of Activities and Changes in Net Assets
17
Notes to Financial Statements
17
Awards of Merit
20
Leadership Team and Board of Directors
21
Tribute to Al Salcedo
22
Our Services
23
On front cover from left to right: Bradley Luke Jr. (EVS General Manager), Jerry Wrobel (Project Manager), Jeffrey Worsham (Assistant Project Manager), Ashlee Griffin (Quality Control Manager), Derrick Brown (Assistant Project Manager) and Shaterica Bean (Administrative Assistant)
QUALITY AND CLIENT SATISFACTION STARTS WITH US
T
his past year a significant milestone was reached by our employees at Martin Army Community Hospital (MACH) at Fort Benning, Georgia. Job Options was honored with the SourceAmerica National Performance Excellence Award for our outstanding performance at MACH. This is the first time JOI has been recognized for this prestigious award, which is a tribute to the commitment and tremendous efforts of our managers, supervisors and employees, to whom we dedicate this award. I offer my congratulations to our employees who are responsible for Job Options receiving this award. It is our tradition in these reports to profile outstanding employees who work tirelessly for our customers. Here we profile two exceptional MACH employees, Christopher Thomas and Terry Brewer, along with Kim Kramer, a shining star working at Camp Pendleton in California. All of us at Job Options look ahead with renewed enthusiasm to continue our mission, providing real jobs for capable people.
Jeffrey A. Johnson, CEO
3 Job Options 2015 Annual Report
OUR ACCOMPLISHMENTS AND ACTIONS TAKEN
In 2015, we continued our efforts to operate our businesses in an efficient manner so that we can provide exceptional service while operating in a challenging federal government budget environment.
JOB OPTIONS HISTORICAL REVENUE 2000-2015
2.5%
ADMIN
17.5%
17%
50
COMMISSARY
11%
LAUNDRY
2014/2015 REVENUE
$50.5 MILLION
REVENUE IN MILLIONS ($)
FOOD SERVICES
15%
FACILITIES
37%
40
30
20
10
0
HOSPITAL
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
YEAR
O
ur business continued to grow in our largest sector – Hospital Environmental Services (HES) – by over $2 million in Fiscal Year 14/15 to $18.1 million through an expanded contract we received for providing housekeeping and environmental services at the new Martin Army Community Hospital (MACH) at Fort Benning, Georgia. This division will generate over $20 million in revenue in Fiscal Year 16/17 as we begin servicing the new, larger Army hospital at Fort Irwin, California.
percent. We withdrew from bidding on a new commissary contract at Hill Air Force Base as the price required to secure the contract was 17 percent less than what we had been receiving, and we believed we could not operate profitably at that price. In November 2015, we resolved a dispute at Hill AFB with the Defense Commissary Agency. They reissued a contract performance rating that gave us acceptable grades and an acceptable overall rating that reversed $15,000 in previously-taken contractual deductions.
Recipient of Highest Award This year, we were honored by SourceAmerica in receiving one of their most prestigious awards – the National Performance Excellence Award in Government Contracting – for the work we have performed at Martin Army Hospital. In winning this award, we competed with over 5oo other not-for-profit companies that operate approximately 2,700 AbilityOne projects. We will receive this award at the SourceAmerica National Training Convention in Washington, D.C. in April. Our consistent high-performance assessments and cost-saving actions have led to this award.
We restructured our laundry operations with the intent to reduce the division’s losses. Though we fell short of our goal, we streamlined our efforts and this division now reports to Nazar Masry, who has been promoted to Vice President of Healthcare and Laundry Operations. Joe Ryan, who previously ran the division, has become Division Manager for our new Linen Sales Division. We are excited to become a premier provider of quality linen to the hospitality and healthcare industries through his efforts. To succeed Joe, Hugo Mezamartinez was promoted to Laundry Division Manager.
JOI’s performance at this hospital, over the past five years, has been instrumental in securing the confidence of ARMY MEDCOM in the AbilityOne (A1) program. This has led to an expansion of the A1 Program into an additional nine ARMY MEDCOM hospitals.
Safety First Another major focus has been to promote safety in the workplace and reduce our workers’ compensation expenses. While the number of injuries that we sustain has remained relatively constant, the injuries have been more serious over the past eighteen months. This resulted in additional workers’ compensation premiums as we are partially self-insured. In response, we have devoted additional resources to programs that make our work environments safer and our employees more engaged and satisfied with their work environment.
Significant Actions and Promotions We experienced a decline in profitability in our Commissary Division due to a drop in shelf-stocking productivity at 32nd Street Naval Commissary. This was corrected in the fourth quarter by expanding the role of our more productive stockers, and productivity increased by 50 4
Job Options 2015 Annual Report
REPORT TO THE COMMUNITY
As Job Options (JOI) enters its second quartercentury, for the first time in our history we have generated over $50 million in annual revenue. As a not-for-profit company, we continue to hire individuals with disabilities, providing superior support services at competitive prices. We offer worthwhile employment to those who otherwise would have difficulty securing positions in the job market within their communities.
NUMBER OF JOB OPTIONS EMPLOYEES
IN 2015
922 922
2000-2015 1000
NUMBER OF JOB OPTIONS EMPLOYEES
IN 2015 EMPLOYEES
NUMBER OF EMPLOYEES NUMBER OF EMPLOYEES
2000-2015
800
1000 600
800
EMPLOYEES
400
600 200
400 0
00
01
02
03
04
05
200
0
W
06
07
08
09
10
11
12
13
14
15
YEAR 00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
YEAR
e employ individuals in janitorial, food services, laundry, administrative services, hospital environmental services, commissary inventory management and shelf-stocking facilities for government and commercial customers. Most employment opportunities result from contracts with agencies within the federal government, offered under the provisions of the AbilityOne program. The program enables certain federal government contracts to be set aside for firms like ours that primarily employ individuals with disabilities. Under this legislation, such individuals must work a minimum of 75 percent of labor hours through these contracts.
and medical clinics in Georgia and Florida. Approximately 90 percent of our contracted employees work within federal agencies. The remaining workers are placed within the commercial sector. This year we celebrate 29 years of operation. To meet the requirements of our contracts, JOI employed 922 people as of September 30, 2015. The majority of these employees have a physical, psychological, developmental or emotional disability. We remain committed to our mission of expanding our contracts in order to employ as many individuals with disabilities as possible. In performing this mission, JOI is entirely self-funded through the contractual revenue received from government and commercial accounts. We are not dependent on gifts or grants to fund our operations. As such, it is our responsibility to operate within budgetary confines.
Long-term contracts with the U.S. Department of Defense, General Services Administration, Veterans Administration and Homeland Security (U.S. Customs and Border Protection), provide employment for disabled workers. Our largest customer is the Department of Defense, giving us a substantial presence at many Navy and Marine Corps bases throughout Southern California, as well as military hospitals
Our company has seven divisions: Hospital Environmental Services, Facilities, Food Services, Professional/Administrative, Laundry, Linen Sales and Commissary Service Divisions.
5 Job Options 2015 Annual Report
6 Job Options 2015 Annual Report
CHRISTOPHER “
THOMAS
”
I work hard to get the job done, and if they need something done when someone isn’t right there, I don’t ask questions…I say ‘I’m on my way!’
MARTIN ARMY COMMUNITY HOSPITAL ENVIRONMENTAL SERVICES Bradley Luke, General Manager at the hospital, characterizes Chris as “An eager person who wants only to do his job well. As an experienced Environmental Services worker at the Martin Army Community Hospital at Fort Benning, Chris has been employed since 2015. He is passionate about doing his job. He makes my job a whole lot easier.”
“The best part of my work is cleaning the carpet in the hospital and keeping it looking new. My main job is cleaning the stairways, hallways and reception areas. I get excited about the equipment I use. I make sure the vacuum cleaners are working, and do some maintenance on them myself. I like working for Job Options; the benefits are great. At home, I help my family with bills and groceries, and take my mom out to eat. I live with my mom and my grandmother, who will be 88 this year. My mom works, so when I get home I have the house cleaned before she comes home. I think I was hired by Job Options because I work hard and get the job done.”
7 Job Options 2015 Annual Report
TERRY “
BREWER
”
My main challenge in my job is organizing my time… will I have enough time to do this and that? I try to work everything on a time basis to get all my work done.
MARTIN ARMY COMMUNITY HOSPITAL ENVIRONMENTAL SERVICES “Terry Brewer, who is an Environmental Services employee, takes his job very seriously,” says Bradley Luke. “Working in a hospital can be difficult, but Terry takes each task as a challenge and does the best possible job.”
“I’ve worked for Job Options since 2011. I am here to keep the hospital clean. I make beds, sanitize bathrooms, whatever is necessary to keep our hospital super clean. I was trained to do the jobs professionally. What I do helps the hospital. We are the ones who help nurses and doctors. If they need the trash taken out or environmental hazards cleaned up and disposed, we do it. As I see it, they couldn’t do their job if we didn’t do ours. Even though some may not look at us as an important factor, I like to say we’re indispensible. When I’m not working I like to go to movies, eat out (I like Italian food) or just stay home and enjoy being there.”
8 Job Options 2015 Annual Report
9 Job Options 2015 Annual Report
MARTIN ARMY COMMUNITY HOSPITAL
“
”
The facility was so clean we needed sunglasses to inspect it. Joint Commission Inspectors
Bradley Luke Jr. EVS General Manager
W
e at Job Options are grateful to have been awarded the prestigious SourceAmerica Award for our outstanding performance at the Martin Army Community Hospital (MACH) at Fort Benning, Georgia.
on inspections that uncover any problem areas and then take immediate action to correct deficiencies. Maintaining employee performance standards is the key to meeting our objectives. Meetings between JOI management and government representatives are held at least monthly, where action items are addressed and assigned to supervisory personnel. At the most recent Joint Commission Survey in August of 2015, several Commission inspectors remarked, “The facility was so clean we needed sunglasses to inspect it.”
When JOI acquired the contract with MACH, we inherited a hospital with substandard conditions due to poor performance by the previous contractor. ACIS (American Institute for Cleaning Service), an independent assessment firm, rated the facility at 55 percent (with 85 being an acceptable score). Over the next six months, EVS General Manager Bradley Luke and his staff toiled diligently to improve the quality standards of the original hospital and outlying clinics. Mr. Luke’s crew of workers improved the cleanliness rating, with the most recent score hitting 97.5 percent in the main hospital, and 99.3 percent in outlying clinics. These are the highest scores ever given by AICS in surveys of MEDCOM hospitals under contract with AbilityOne. That is a testament to the JOI employees at MACH who diligently perform at the highest level of care and dedication. The number of disabled workers at the hospital has increased from 70 to 103, a disabled ratio that exceeds the requirements of the AbilityOne program.
The significant improvement at MACH was an important factor in MEDCOM’s (Army Medical Command) decision to expand the AbilityOne program into future Army hospital environmental service contracts. As a result, an additional eight Army hospital facilities have been added to the AbilityOne Program. This program now employs nearly 600 people with disabilities at ten Army hospitals. In late April 2016, Job Options’ CEO, Jeff Johnson, along with Bradley Luke, will journey to Washington, D.C. to attend a ceremony to receive the SourceAmerica Award on behalf of the employees at Job Options. We take pride in our company’s continued commitment to offer employment to deserving individuals with disabilities.
JOI works closely with the government operations and quality-assurance staff at the hospital to focus
10 Job Options 2015 Annual Report
KIM
“
KRAMER ”
When I began my Job Options employment at Camp Pendleton, I was shy. Not any more! I have a lot of good friends who have helped me get where I am today.
CAMP PENDLETON JANITORIAL SERVICES
“Kim is well liked by all her peers,” says her supervisor Tom Sanchez. “Kim has the most positive, pleasant attitude no matter what task she is assigned. She makes everyone happy (she bakes banana nut bread for us), exceeding our customer’s expectations with the high quality of her work. On the base, she travels to various sites to do her housekeeping duties. She’s never been late to work. She’s an amazing individual.”
“When I came to Camp Pendleton I was trained by a great work coach. She helps me a lot, and I like everyone I see at the base. I have won seven Extra Mile awards. I keep a positive attitude, and a desire to do a good job every day. It must be my personality and way of working. I have been employed by Job Options in Janitorial Services for six years, and only missed a few days of work when I was ill. My favorite part of my job is just coming to work! And I always try to be happy. I live with my mom in San Marcos and I like to be with my family, go shopping and to movies and have family picnics.”
11 Job Options 2015 Annual Report
Table of Contents Statements of Financial Position
13
Statement of Functional Expenses (2014)
14
Statement of Functional Expenses (2015)
15
Statement of Cash Flows
16
Statement 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. (a nonprofit organization), which comprise the statements of financial position as of September 30, 2015 and 2014, and the related statements of activities and changes in net assets, functional expenses, and cash flows for the fiscal years then ended, and the related notes to the financial statements.
Management's Responsibilities 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 Responsibilities Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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, 2015 and 2014, and the changes in its net assets and its cash flows for the fiscal years then ended in accordance with accounting principles generally accepted in the United States of America.
12 Job Options 2015 Annual Report
San Diego, California January 22, 2016
Statements of Financial Position For the fiscal years ended September 30, 2015 and 2014
Assets
2015
2014
Cash and cash equivalents (Note 3)
$ 1,971,881
$ 2,368,780
Contracts receivable, net (Note 4)
7,142,454
5,271,189
Other receivables
191,720
128,324
Inventory (Note 5)
93,787
93,787
Prepaid expenses
344,227
249,882
9,744,069
8,111,962
Fixed assets, net of depreciation (Note 6)
4,560,839
5,021,367
Investments (Note 7)
5,000
5,000
Deposits
111,513
111,513
Total Assets
$ 14,421,421
$ 13,249,842
Liabilities and Net Assets
2015
2014
Accounts payable and other liabilities
$ 1,806,701
$ 1,100,418
Accrued payroll and payroll related expenses
3,197,263
2,630,432
Current portion of long-term debt (Note 8)
1,763,211
896,710
6,767,175
4,627,560
840,745
2,245,125
840,745
2,245,125
7,607,920
6,872,685
Current assets:
Total current assets
Current liabilities:
Total current liabilities Long-term liabilities (Note 8) Long-term liabilities, net of current portion Total long-term liabilities Total liabilities
Net assets Unrestricted Total net assets Total Liabilities and Net Assets
13 Job Options 2015 Annual Report
6,813,501
6,377,157
6,813,501
6,377,157
$ 14,421,421
$ 13,249,842
Statement of Functional Expenses For the fiscal year ended September 30, 2014
2014
Program Services
Management and General
Salaries and wages
$ 22,007,169
$ 1,994,602
$ 24,001,771
Employee payroll benefits
10,694,963
625,369
11,320,332
Sub-contractor services
5,032,493
–
5,032,493
Supplies and inventory costs
1,914,322
47,237
1,961,559
Equipment costs
302,177
40,613
342,790
Building repairs and maintenance
18,597
2,385
20,982
Utilities
841,127
41,266
882,393
Telephone
107,879
12,638
120,517
Office supplies
65,508
104,639
170,147
Travel and entertainment
168,881
71,487
240,368
Building rent
314,018
164,412
478,430
NISH commission
1,636,499
599
1,637,098
Insurance
248,208
195,386
443,594
Bank charges
92,216
218,934
311,150
Licenses and taxes
27,869
28,084
55,953
Professional fees
16,077
232,241
248,318
Dues and subscriptions
3,289
7,620
10,909
Bad debt expense
–
84,950
84,950
Outside services
545,164
1,025
546,189
Loss on inventory
74,076
4,842
78,918
Indirect costs
(87,000)
–
(87,000)
Miscellaneous
84
13,812
13,896
Depreciation
887,160
8,760
895,920
Total Expenses
$ 44,910,776
$ 3,900,901
$ 48,811,677
14 Job Options 2015 Annual Report
Total
Statement of Functional Expenses For the fiscal year ended September 30, 2015
2015
Program Services
Management and General
Salaries and wages
$ 21,883,089
$ 2,393,778
$ 24,276,867
Employee payroll benefits
11,385,928
547,358
11,933,286
Sub-contractor services
5,529,514
–
5,529,514
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
NISH 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
15 Job Options 2015 Annual Report
Total
Statements of Cash Flows For the fiscal years ended September 30, 2015 and 2014
2015
2014
Change in net assets
$ 436,344
$ 283,095
Adjustments to reconcile change in net assets to net cash
Depreciation
918,527
895,920
Loss on disposal of asset
62,985
4,843
Contracts receivable
(1,871,265)
2,585,506
Other receivables
(63,396)
(133,681)
Inventory
–
149,478
Prepaid expenses
(94,345)
(57,134)
Deposits
–
(29,203)
Accounts payable and other liabilities
706,283
(898,684)
Accrued payroll and payroll related expenses
566,831
99,634
661,964
2,899,774
(520,984)
(509,863)
(520,984)
(509,863)
Proceeds from capital leases and notes payable
428,351
270,571
(Payment) for capital leases and notes payable
(966,230)
(952,108)
(537,879)
(681,537)
Net change in cash and cash equivalents
(396,899)
1,708,374
Cash and cash equivalents, beginning of year
2,368,780
660,406
Cash and cash equivalents, end of year
1,971,881
2,368,780
$ 220,355
$ 258,069
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 2015 Annual Report
Statement of Activities and Changes in Net Assets For the fiscal years ended September 30, 2015 and 2014
2015
2014
Contract revenue
$ 50,471,622
$ 49,093,220
Interest and investment income
3,646
1,552
Revenues
Total Revenue
50,475,268
49,094,772
Expenses Program services
45,676,669
44,910,776
Management and general
4,362,255
3,900,901
50,038,924
48,811,677
Change in unrestricted net assets
436,344
283,095
Net Assets, Beginning
6,377,157
6,094,062
Net Assets, Ending
$ 6,813,501
Total Expenses
$ 6,377,157
Notes to Financial Statements income earned on the related investments for general or specific purposes. There were no permanently restricted assets as of September 30, 2015 and 2014.
Note 1 Nature of Business Job Options, Inc. (Organization) 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 nonprofit agencies that assist individuals with disabilities and currently employs over 950 individuals.
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. 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 taxexempt purpose. The Organization uses the same accounting methods for tax and financial reporting.
Note 2 Summary of Significant Accounting Policies
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.
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.
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.
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:
f.
Unrestricted net assets: Unrestricted net assets are available to support 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.
Contracts receivable and accounts 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 and accounts 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.
Temporarily restricted net assets: Net assets that are subject to donor-imposed 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, 2015 and 2014.
h. Fixed assets Fixed assets are recorded at cost and depreciated under the straight-line 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.
Permanently restricted net assets: Net assets that are subject to donor-imposed 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
17 Job Options 2015 Annual Report
i.
j.
recorded bad debt expense of $77,235 and $84,950 for the fiscal years ended September 30, 2015 and 2014, respectively.
Investments The Organization presents its investments in accordance with Accounting Standards Codification (ASC) 958-320, Not-For-Profit Entities - Investments Debt & Equity Securities. Under ASC 958-320, investments in marketable securities with readily determinable fair values and all investments in debt securities are reported at their fair values in the Statement of Financial Position. The fair values of these investments are subject to change based on the fluctuations of market values. Unrealized gains and losses are included in the change in net assets. Investment income and gains restricted by a donor or by the Organization are reported as increases in unrestricted net assets if the restricted are met (either by the passage of time or by use) in the reporting period in which the income and gains are recognized. See Note 7 for additional information.
Note 5 Inventory Inventory at September 30, 2015 and 2014, consisted of the following:
Fair value measurements Fair value of an investment is the amount that would be received to sell the investment in an orderly transaction between market participants at the measurement date. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following categories: Level 01
Valuation based on quoted market prices in active markets for identical assets or liabilities that the Organization has the ability to access.
Level 02
Valuations based on pricing inputs that are other than quoted prices in active markets which are either directly or indirectly observable.
Level 03
Valuations are derived from other valuation methodologies, including pricing models, discounted cash flow models, and similar techniques.
2015
2014
$ 93,787
2015
2014
Land
$ 100,539
$ 100,539
Buildings
1,439,789
1,439,789
Leasehold improvements
541,098
541,098
Furniture and fixtures
61,080
58,921
Equipment
8,680,985
8,311,060
Automobiles
595,797
594,913
(6,858,449)
(6,024,953)
$ 4,560,839
$ 5,021,367
$ 1,971,031
$ 2,367,930
850
850
$ 1,971,881
$ 2,368,780
Investments are reported at fair value in the accompanying statement of financial position. The level 2 fair value measurements for the fiscal years ended September 30, 2015 and 2014, are as follows:
2015
Description
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, 2015 and 2014, the Organization had $1,787,896 and $2,383,486, respectively, of funds in excess of FDIC insurance limits.
2014
Fair Market Value
Cost
Fair Market Value
Cost
Stocks
$
5,000
$
5,000
$
5,000
$
5,000
Total
$
5,000
$
5,000
$
5,000
$
5,000
The fair value of the Job Opportunities, Inc. stock is based on cost as there is no current market for the stock. Job Opportunities, Inc. is a for-profit company that is 100% owned by the Organization. See Note 11 for further information.
Note 4 Contracts Receivable
Note 8 Long-Term Liabilities
Contracts receivable at September 30, 2015 and 2014, consisted of the following:
Accounts receivable - contracts
$ 93,787
Note 7 Investments
Deposits:
Total Cash and Cash Equivalents
Total Inventory
During the fiscal years ended September 30, 2015 and 2014, $918,527 and $895,920, respectively, were charged to depreciation expense.
Cash and cash equivalents at September 30, 2015 and 2014, consisted of the following:
Petty cash
$ 93,787
Total fixed assets, net of depreciation
Note 3 Cash and Cash Equivalents
Cash on hand
$ 93,787
Less: accumulated depreciation
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.
Cash in banks
Hospital inventory*
Fixed assets at September 30, 2015 and 2014, consisted of the following:
k. Retirement Plans The Organization has four departments, NMC, Georgia, Fort Irwin, 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.
Concentration of Risk
2014
Note 6 Fixed Assets
The categorization of an investment within the hierarchy is based on the pricing transparency of the investment and does not necessarily correspond to the Organization’s perceived risk of that investment.
l.
2015
2015
2014
$ 6,628,796
$ 4,856,704
a. 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, 2015, are as follows: Balance (2014)
Balance (2015)
Due in one year
Accounts receivable REAs/Claims pending
583,658
475,485
Less: allowance for doubtful accounts
(70,000)
(61,000)
Capital leases
$ 1,478,218
$ 428,351
$ (703,355)
$ 1,203,214
$ 578,122
$
Notes Payable
Total
$ 3,141,835
Total Contracts Receivable
$
7,142,454
5,271,189
Consistent with generally accepted accounting principles in the United States of America, contracts receivable as of September 30, 2015 and 2014, are shown net of an allowance for doubtful accounts in the amount of $70,000 and $61,000, respectively. The Organization
18 Job Options 2015 Annual Report
1,663,617
Additions
$
428,351
Payments
(262,875)
$ (966,230)
1,400,742
$ 2,603,956
1,185,089
$ 1,763,211
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 1 payment at $8,846, 3 payments of $8,999, 1 payment of $9,402 and 55 payments of $11,466. The outstanding principal balance on this note payable as of September 30, 2015 and 2014, was $333,273 and $442,821, respectively.
b. Capital leases The Organization entered into various capital lease agreements with Tetra Financial Group that mature on May 1, 2018, for assets purchased in the amount of $1,390,046. Included in the purchase price is an addition in the amount of $200,052 in March 2014. 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, 2015 and 2014 was $677,623 and $1,013,582, respectively.
Debt service requirements for the notes payable as of September 30, 2015, are as follows:
The Organization entered into a capital lease with Celtic Leasing during the fiscal year ended September, 30, 2012, that matures December 30, 2015, for assets purchased in the amount of $900,947 including sales tax. The effective interest rate is 4.615%. The outstanding principal balance on this capital lease as of September 30, 2015 and 2014, was $61,256 and $299,375, respectively. In July 2014, the Organization entered into a lease/purchase agreement with US Bank that matures on August 20, 2018, for equipment purchased in the amount 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, 2015 and 2014 was $51,689 and $68,032, respectively. The Organization has various car loans outstanding with maturities through 2018. The outstanding principal balance on these loans as of September 30, 2015 and 2014, was $93,929 and $97,228, respectively.
Year ending September 30,
Principal
2016
1,185,089
2017
126,286
2018
89,367
Total
$ 1,400,742
Note 9 Health and Welfare Money Purchase Pension Plan Included in accounts payable and other liabilities as of September 30, 2015 and 2014, were $530,559 and $391,077, respectively, due to various trusts for health and welfare pensions. Included in employee benefits expense were $5,632,248 and $5,197,657 of health and welfare benefits for the fiscal years ended September 30, 2015 and 2014, respectively.
The Organization entered into two equipment finance agreements with Regents Capital Corporation for assets purchased in the amount 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, 2015 is $318,716.
Note 10 Operating Leases
Debt service requirements for the capital leases as of September 30, 2015, are as follows:
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,
Principal
2016
$ 578,122
Year ending September 30
2017
418,452
2016
$ 696,876
2018
166,084
2017
237,646
2019
36,426
2018
223,340
2020
4,130
2019
199,979
Total
$ 1,203,214
2020 Total future lease payments
c. 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 US Treasury Securities. The current interest rate is 5.75%. The loan will mature March 27, 2016. The outstanding principal balance on this note payable as of September 30, 2015 and 2014, were $688,038 and $758,828, respectively. The Organization is working with Capital Impact Partners and has secured refinancing for these loans.
Lease Payments
185,962 $ 1,543,803
The Organization will receive no sublease rental revenues nor pay any contingent rentals associated with these leases. For the fiscal year ended September 30, 2015 and 2014, operating lease expense was $458,598 and $478,430, respectively.
Note 11 Related Parties a. Job Opportunities, Inc. Job Opportunities, Inc. (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 a noncurrent investment. The Company had no activity for the fiscal years ended September 30, 2015 and 2014.
The Organization entered into a loan agreement with California Bank and Trust for the purchase of equipment in the amount of $814,000 that matured on December 21, 2014. Interest rate is 3.5% over the lender’s LIBOR rate. The current interest rate is 6.244%. The outstanding principal balance on this note payable as of September 30, 2015 and 2014, were $0 and $46,877, respectively.
Note 12 Subsequent Event
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 May 1, 2011, the interest rate was revised to 5.625%. 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 April 1, 2016. The balance as of September 30, 2015 and 2014, was $379,431 and $415,089, respectively. The Organization is working with Capital Impact Partners and has secured refinancing for these loans.
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 January 22, 2016, 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 2015 Annual Report
AWARDS OF MERIT
2015 SourceAmerica National Performance Excellence Award Government Contracting
2015
2014
2014
Employer of the Year Committee on Employment of People with Disabilities
SourceAmerica National William M. Usdane Award Yolanda Richardson
SourceAmerica Pacific West Region Evelyne Villines Award Elizabeth Coss
2014
2013
2013
NCSE Management Excellence Award Pacific West Region Doug Baker
GSA Region 9 NISH Performance Award
CIMS GB Certification with Honors Hospital Environmental Services and Facilities Division
2012
2012
2011
NISH Pacific West Region Evelyne Villines Award Steve Credle
NCWC Management Excellence Award – West Region Carol Whiteley
Chula Vista Laundry Plant Accreditation Healthcare Laundry Accreditation Council
2010
2009
NISH Pacific West Region William M. Usdane Award Rosamaria Santana
NISH National Business Innovation Award
2006
2006
Governmental Relations Grassroots Excellence Award
NISH National Business Innovation Award
2005 NISH National William M. Usdane Award James Bandy
2004 Fastest-Growing Company Award San Diego Business Journal
20 Job Options 2015 Annual Report
2008 NISH Board Award for Performance Excellence Randy Williams
2006 NAVFAC SW FEAD SD Safety Award Facilities Maintenance Category Janitorial Services for Naval Medical Center San Diego
2002 NISH National Evelyne Villines Award Jim Smith
BOARD OF DIRECTORS Dr. Richard Skay, Chairman Kathleen Leverette Deborah Martinez-Shriver Patrick O'Sullivan Verlyn Soderstrom Richard Woodaman
LEADERSHIP TEAM Steve Credle Jeffrey Johnson Chief Executive Officer jjohnson@joboptionsinc.org
William Eastwood Associate Director beastwood@joboptionsinc.org
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
PTS Administrator and Purchasing Director scredle@joboptionsinc.org
Hugo Mezamartinez
Jounina Boka
Laundry Division Manager hmezamartinez@joboptionsinc.org
Financial Controller jboka@joboptionsinc.org
Joe Ryan
Gladis Jarquin
Director of Linen Sales jryan@joboptionsinc.org
Administrative Services Division Manager and Safety Officer gjarquin@joboptionsinc.org
Nazar Masry
Valorie Seidl Human Resources Director vseidl@joboptionsinc.org
Carol Whiteley
Healthcare and Laundry Services Vice President nmasry@joboptionsinc.org
Commissary Division Manager cwhiteley@joboptionsinc.org
Marcy McCabe
Veronica Serrano
Contracts Manager mmccabe@joboptionsinc.org
Margaret-Ann Pe単a NAVFAC Division Manager and Facilities Division Manager mpena@joboptionsinc.org
21 Job Options 2015 Annual Report
Contracts Manager vserrano@joboptionsinc.org
AL SALCEDO REMEMBERING A LIFE TOO SHORT “It is hard to forget someone who gave you so much to remember.” – Unknown
A
lden Salcedo was born in the Philippines and, upon his graduation, received nine full scholarships and a nomination from President Richard Nixon to attend the U.S. Naval Academy. He received his Bachelor of Science degree and was commissioned as a Supply Corps Officer before going on to receive two master’s degrees.
and Fort Irwin hospitals, which positioned Job Options as the second-largest provider of AbilityOne HES contracts. He created the Linen Sales Division and increased disabled employment by more than 150 employees. Al, you are truly missed by all of us at JOI. We miss your warm greetings in the morning, your sage professional advice, but most of all, we miss your clever sense of humor that always provided a well-timed break in our busy workdays.
Al was very active in several civic organizations, including the Asian Business Assoc., the San Diego Hire-A-Youth Program, PhilAm BID and Leadership Education for Asian Pacific. He was the president of FilipinoAmerican Community Empowerment and served on several nonprofit boards.
Al is survived by his wife of 22 years, Rosanna Guevarra-Salcedo, and their two sons. Through our daily efforts, all of us at Job Options strive to honor Al’s memory and the lasting impact he made on the company and on us all.
At JOI, Al secured the Hospital Environmental Services (HES) contracts at Fort Benning
22 Job Options 2015 Annual Report
OUR SERVICES Job Options plays a key role in providing award-winning services in a wide range of areas to commercial businesses and government agencies.
Medical Waste Transfer and Disposal Office/Administrative Cleaning Operating and Emergency Room Cleaning Patient Room Cleaning
Administrative Services Bilingual Services Customer Service Data Entry Office Support Project Management Word Processing 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
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
Grounds and Landscape Maintenance Beds Maintenance Lawn Care – Planting, Trimming, Weeding, Watering Irrigation Systems Street Sweeping
Laundry Services 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 Clinic, Pharmacy and Laboratory Cleaning Exam/Treatment Room Cleaning Labor and Delivery Room Cleaning
Linen Sales Services Assisted-Living Facilities Linens Dust Control Linens Hotel, Resort and Spa Linens
23 Job Options 2015 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
T 760.547.2480
F 619.688.9884
F 619.424.8768
F 909.890.4673
F 760.547.2485
E info@joboptionsinc.org W joboptionsinc.org
STUDIO 2055 Graphic Design NANETTE NEWBRY Creative Direction
Š2016 Job Options, Inc. 04/16
RICHARD DOWDY NATHAN LEDUC Photography