job options inc. annual report 2008

| Job Options 2008 Annual Report

annua

l report

08

CONTENTSOur Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Work That Inspires Randy Williams . . . . . . . . . . . . . . . . 2-3

Work That Inspires Brett Saville . . . . . . . . . . . . . . . . . . . . 4-5

Our Accomplishments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Our Report to the Community . . . . . . . . . . . . . . . . . . . . . . . 7

FiNaNCial REpORTIndependent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . 8

Statements of Financial Position . . . . . . . . . . . . . . . . . . . . 9

Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Liabilities and Net Assets . . . . . . . . . . . . . . . . . . . . . . 9

Statements of Activities and Changes in Net Assets . . . 10

Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . 11

Statements of Functional Expenses 2008 . . . . . . . . . . . . 12

Statements of Functional Expenses 2007 . . . . . . . . . . . . 13

Notes to Financial Statements . . . . . . . . . . . . . . . . . . .14-15

Management and Board of Directors . . . . . . . . . . . . . . . . 16

Our Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Our Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ON OUR COVER

Brett Saville (left) and Randy Williams (right) have found inspiration in their daily lives through their employment with Job Options. Read their profiles inside this report.


We believe that meaningful employment provides the best mechanism for integrating people with disabilities into productive society. Work enhances

self worth, teaches marketable skills and provides a sense of accomplishment and belonging. It reinforces that the individual with a disability is a valuable member of society and that he or she has a productive place in it. Employment also reduces the dependence on public assistance programs and enables the employed individual to gain more economic security and choices than they would otherwise have.

Our Mission

JOI haS helped OveR 4,000 dISaBled IndIvIdualS take theIR place In OuR cOmmunIty, WheRe they can cOntRIBute and gaIn a Real SenSe Of Self WORth fROm the WORk they peRfORm.

Job Options, Inc. (JOI) focuses exclusively on providing meaningful employment opportunities for people with disabilities in environments where they work and interact with non-disabled people. This can help reinforce the fact that they are not so different after all, and that we all have diverse talents and skills as well as challenges. JOI coordinates with other social agencies that provide assistance programs to people with disabilities. These programs include vocational training, counseling and assisted-living housing. Once the individual is ready, JOI provides skill assessment, job placement assistance, on-the-job training, ongoing job support programs, and finally, job search assistance into competitive employment.

Our employees include individuals with diverse disabilities, ranging from physical disabilities to psychological, emotional and developmental disabilities, as well as those who are disabled because of substance- abuse histories. Over the course of its history, JOI has helped over 4,000 disabled individuals take their place in our community where they can contribute and gain a real sense of self worth from the work they perform.

Job Options 2008 Annual Report | Page 2

Randy Williams


In 2008, Randy received an AbilityOne award for his outstanding performance

and service at JOI. AbilityOne coordinates its activities with non-profit organizations across the country to employ individuals who

are blind or have severe disabilities. The Federal Government purchases over two billion dollars annually in goods and services through AbilityOne, with JOI

employing individuals who otherwise would not have meaningful employment. > Randy Williams is a perfect example of what Job Options is all about: giving

disabled individuals a chance to gain not only independence, but a real sense of accomplishment and self worth. “Job Options has made me more

independent, and let me learn more skills...people can trust you.Did you know they call me ‘Number One’ at work?”

Randy Williams is a peRfect example of What Job options

is all about: giving disabled individuals a chance

to gain not only independence, but a Real sense of

accomplishment and self WoRth.

RaNDY WilliaMS has been employed by Job Options at the San Ysidro Border

Crossing (SYBC) for nearly 13 years, where he is a groundskeeper, maintenance worker and landscaper. Despite his disability, Randy is exceptionally self-

reliant and takes enormous pride in the fact that his supervisors trust him to work without supervision. His supervisor and Border Inspectors call Randy “Number One.” > In addition to his

work at the border crossing, Randy also does landscape maintenance at the U.S. Post Offices in Grantville, Linda Vista and Rancho Bernardo. Randy’s supervisor, Job Options’ Assistant Division Manager Fred Garcia,

notes that he drives Randy to the three post offices once a week and can leave him at the sites, as “Randy knows exactly what to do. He’s very independent,” Fred added that when he first came to the SYBC as supervisor, Randy was “shy and would eat lunch alone. Now, Randy’s a changed person, he’s sociable, friendly and self-confident.” > Randy says he most enjoys going to local bookstores. Though he doesn’t draw or paint, “I’m big on art

books,” says Randy. “Van Gogh, Cezanne, Monet, Gauguin, Frida Kahlo. You know, 17th, 18th and 19th century…Michelangelo. I like them all.” With his mother, Randy has made several trips to Europe.

“We went to the Louvre and other museums and I saw in person the paintings in the books. I enjoyed it so much.” Says Randy: “I’m still shy around girls, but everyone’s said I’ve

improved a lot since I first came to Job Options.”

Brett and his co-workers at the laundry sort, wash, dry and fold 500,000 pounds of items each month.

As with 75% of the workers at the Chula Vista facility, Brett is disabled. But that has not been a hindrance to his ability to perform

his tasks well, something that Supervisor Joe Orlando is quick to point out. “He’s here every day, right on time, ready to work. He knows what to do and goes right to his job, without fail.” > Through government and private industry contracts, Job Options is able to fill positions with severely disabled

people who can be counted on to do their jobs efficiently and with pride. Despite his willingness to work hard at the laundry, Brett is adamant

about one thing: He does not do laundry at home!

Job options has given WoRkeRs like bRett an oppoRtunity

to excel in the WoRkplace. they peRfoRm meaningful

functions that give them financial secuRity and pRide that

comes With knoWing theiR haRd WoRk is appReciated.

BRETT SaVillE In the 20 years that Brett has been employed by Job Options,

he’s missed only a few workdays from his job, which begins daily at 8:00 a.m. Brett’s commute to JOI’s Chula Vista laundry facility from his home in Mission Hills is

made by bus and trolley. And while travel can take up to an hour each way, Brett doesn’t mind; it’s the work that inspires his punctuality and devotion to his place at Job Options’ laundry.

“My job is very good. I like it a lot.” > Born in South Bend, Indiana, Brett moved to San Diego early in his life. He attended Roosevelt Junior High and San Diego High School, and now shares a home with his mother

and two siblings. He enjoys movies, particularly watching old films on TV. But his primary focus is on his work, which has given him a full measure of independence and pride in bringing home a weekly paycheck.

> At the laundry, Brett is a machine finisher and sorter, tasks that he has performed well as he enters his 21st year at Job Options. Brett’s ability has been recognized with two Employee of the Month

awards (in August and December of 2007). “I go the extra mile,” says Brett, a testament to his dedication to doing the best job possible at the laundry.

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BRETT saVillE

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Computer-Based Quality Control Systems We are converting paper-based quality control systems and assessments into our computer- based electronic systems. The database results give us more useful information about performance trends and where operations need to improve.

Automation Cost ReductionWe are purchasing capital equipment that improves cleaning quality while reducing labor hours to respond to budget reductions that the Navy has undertaken. This effort at NMC Balboa Hospital alone is projected to reduce the contractual cost by 3 to 4%.

Green CleaningThese efforts include policies, procedures, training and shared responsibility that minimize the impact of cleaning materials on the health of building occupants and protecting while the environment as a whole.

Initial reactions of NAVFAC personnel have been positive, and we are optimistic that the continued leadership that we are showing will eventually result in additional contracts being put under this umbrella.

claim RecoveRyA small percentage of the time, we perform work outside the scope of our Federal Contracts. In order to be reimbursed for this work, we file requests for equitable adjustments and claims with the appropriate agency of the federal government under which the work is performed. Over the past three years, this work has amounted to slightly over $700,000. We have historically booked a reserve against these claims of 50% of the overall value. In the past year, we have worked diligently to settle as many of these outstanding claims as possible, and we have gotten settlement on well over half of the gross dollar amount of these claims. In the process of settling these issues we have also learned a good deal about how we may successfully file future claims which will aid our profitability.

impRoved pRofitability in laundRy opeRationsOur laundry operations continued the turnaround that began three years ago, and profitability grew more than planned. While our volume from commercial business has suffered from the recent economic downturn, productivity gains made at both plants have enabled us to continue to substantially improve operating results. Productivity at our new plant in San Bernardino grew by more than 20% over the past year, as capital additions enabled us to more efficiently process our food and beverage linen, and devote our tunnel washing system to mainly sheets and towels, thus increasing our throughput. We are currently in the initial stages of more fully automating our Chula Vista plant along the lines of what we have done in San Bernardino. In addition to productivity gains, we have dramatically increased disabled employment in our laundry operations. In our San Bernardino facility almost all direct labor hours are now worked by people with disabilities.

commissaRy cost ReductionAll AbilityOne providers are having the value of their commissary contracts cut severely. In our case, commissary contracts have been cut approximately 10% or $1 million annually. In response, we have initiated an aggressive cost reduction program to reduce our operating costs by this amount. Our efforts over the past six months indicate we are two-thirds toward our goal. These efforts include utilizing better information systems to increase efficiency, and adopting best practices we’ve learned from other large commissary providers, thereby enabling a reduction in the labor.

navfac leadeRshipWe are the Prime Contractor to the Navy and manage 15 custodial subcontracts throughout the Southwestern United States. As Prime Contractor, we have initiated the following programs to improve profitability and performance:

JOB OptIOnS Revenue OveR the paSt Seven yeaRS haS almOSt tRIpled, gROWIng fROm $13.6 million Fiscal 2001/2002 to more than $36 million in Fiscal 2007/2008. We are on track to

generate approximately $40 million in revenue in Fiscal 2007/2008. During this period of rapid

expansion, the number of disabled employees has grown from 200 eight years ago to over 517.

Our Accomplishments


Job Options is a San Diego-based not-for-profit organization whose primary mission is to provide meaningful employment for people with disabilities. We meet this goal by employing individuals in basic services such as janitorial, food service, laundry, administrative/clerical, commissary-inventory management and shelf-stocking services to government and commercial customers. Most of our employment opportunities are with various agencies within the federal government and are offered under the provisions of AbilityOne, formerly known as the Javits-Wagner-O’Day program. AbilityOne enables certain federal government contracts to be set aside for firms that primarily employ individuals with disabilities. Under this legislation, people with disabilities must work a minimum of 75% of the direct labor hours expended under these contracts. We currently have long-term contracts with the U.S. Department of Defense, General Services Administration, Veterans Administration, Homeland Security (U.S.

Customs Border Protection) and the U.S. Postal Service. Our largest customer is the Department of Defense, with a substantial presence at many of the Navy and Marine Corps bases throughout Southern California. Approximately 87% of our current employees work in federal government facilities, with the remaining 13% in the commercial sector.

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6.88.5 9.3

JOB OPTIONS REVENUE

JOB OPTIONS DIVISIONAL REVENUE

NUMBER OF JOB OPTIONS EMPLOYEES

MIL

LION

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PLOY

EES

12.713.6

20.6

26

28.930.1

31.1

06/08

36.1

1139Admin(3%)

1699Custodial

(5%)NAVFAC

(8%)

Food Service(17%)

Hospital(20.5%)

Laundry(20.5%)

Commissary(26%)

96087500

7491

6332 2798

Job options divisional Revenue

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6.88.5 9.3

JOB OPTIONS REVENUE



MIL

LION

SEM

PLOY

EES

12.713.6

20.6

26

28.930.1

31.1

06/08

36.1

1139Admin(3%)

1699Custodial

(5%)NAVFAC

(8%)

Food Service(17%)

Hospital(20.5%)

Laundry(20.5%)

Commissary(26%)

96087500

7491

6332 2798

numbeR of Job options employees

JOI is now in its 20th year of operation. Over the past seven years, our annual rate of growth has been over 20%. This growth resulted in JOI generating revenue of over $36 million in fiscal 2007/2008. To meet the requirements of our contracts, JOI currently employs over 800 people, the majority of whom have a physical, psychological, developmental or emotional disability.

Job Options is entirely self-funded through the contract revenue we receive from various governmental and commercial entities. We do not depend on any gifts or grants to fund our operations, and therefore have an ongoing responsibility to operate within budget. In 2006/2007, we reorganized our Custodial Division into three separate groups: Hospital Environmental Services, NAVFAC and Base Custodial to more effectively service our customers. This resulted in JOI having seven major Divisions – Food Service, Laundry, Commissary and Professional/Administrative Services in addition to the three mentioned above.

Our Report to the Community

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6.88.5 9.3

JOB OPTIONS REVENUE



MIL

LION

SEM

PLOY

EES

12.713.6

20.6

26

28.930.1

31.1

06/08

36.1

1139Admin(3%)

1699Custodial

(5%)NAVFAC

(8%)

Food Service(17%)

Hospital(20.5%)

Laundry(20.5%)

Commissary(26%)

96087500

7491

6332 2798

Job options Revenue

We BelIeve JOI IS pOISed tO cOntInue SuBStantIal gROWth In the neaR teRm aS We puRSue Selected cOmmeRcIal OppORtunItIeS and expanSIOn In the aBIlItyOne pROgRam.


Independent audItOR’S RepORt

financial reportTo the Board of DirectorsJob Options, Inc.

We have audited the accompanying statements of financial position of Job Options, Inc., a California Not-for-Profit Corporation (the “Organization”) as of September 30, 2008 and 2007, and the related statements of activities, changes in net assets, functional expenses and cash flows for the years then ended. These financial statements are the responsibility of the Organization’s management. Our responsibility is to express an opinion 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Job Options, Inc., a California Not-for-profit Corporation as of September 30, 2008 and 2007, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Donald McLean and CompanySan Diego, CaliforniaFebruary 17, 2009

Statements of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9Statements of Activities and Changes in Net Assets . . . . . . . . . . . . . . . 10Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11Statements of Functional Expenses 2008 . . . . . . . . . . . . . . . . . . . . . . . 12Statements of Functional Expenses 2007 . . . . . . . . . . . . . . . . . . . . . . . 13Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14


financial report

The accompanying notes are an integral part of these financial statements

Job oPtioNS, iNC . A CALIFORNIA NOT-FOR-PROFIT CORPORATION

StAtEmENtS oF FiNANCiAl PoSitioNSEPTEMBER 30, 2008 AND 2007

ASSEtS 2008 2007

CURRENT ASSETSCash and cash equivalents $ 873,465 $ 888,042 Inventory 207,280 250,947 Contracts receivable 6,388,310 5,301,716 Accounts receivable – 113,304 Prepaid expense 158,959 177,799

Total Current Assets 7,628,014 6,731,808

PROPERTY AND EQUIPMENTEquipment 3,548,276 3,253,268 Furniture and fixtures 6,321 6,321Leasehold improvements 296,455 296,455 Building 1,322,048 1,322,048Land 100,539 100,539Automobiles 351,212 261,995 Less: Accumulated depreciation (2,264,566) (1,886,855)

Net Property and Equipment 3,360,285 3,353,771

NON-CURRENT ASSETSDeposits 31,854 43,290

Total Assets $ 11,020,153 $ 10,128,869

liAbilitiES ANd NEt ASSEtS

CURRENT LIABILITIESAccounts payable and other liabilities $ 2,101,648 $ 1,719,674 Accrued payroll and payroll related expenses 1,554,614 1,472,099 Notes payable, current 369,617 416,193

Total Current Liabilities 4,025,879 3,607,966

NOTES PAYABLE, NET OF CURRENT PORTION 2,192,925 2,095,534

Total Liabilities 6,218,804 5,703,500

NET ASSETS – UNRESTRICTED 4,801,349 4,425,369

Total Liabilities and Net Assets $ 11,020,153 $ 10,128,869



A CALIFORNIA NOT-FOR-PROFIT CORPORATION

StAtEmENtS oF ACtivitiES ANd ChANgES iN NEt ASSEtSFOR ThE YEARS ENDED SEPTEMBER 30, 2008 AND 2007

Job oPtioNS, iNC .

2008 2007 REVENUE

Contract revenue $ 35,802,675 $ 30,753,594 Claims and other revenue 766,916 297,132 Interest and investment income 40,474 56,233

Total Revenue 36,610,065 31,106,959

DIRECT EXPENSEEmployee salaries $ 15,331,335 $ 13,343,162 Employee benefits 6,731,759 5,880,188 Subcontractor services 4,837,201 3,230,461 General supplies 1,148,448 1,207,483 NISh commission 1,156,326 934,280 Utilities 768,028 703,013 Depreciation 400,991 358,800 Equipment leases and rents 239,623 292,575 Other business services 335,083 275,849 Travel 304,846 242,393 Equipment repair and maintenance 176,654 198,214 Bank services and interest 118,687 130,262 Insurance 133,234 147,825 Facility rents 152,631 128,666 Bad debt expense 366,036 110,166 Professional fees 1,415 86,230 Food and paper goods 517 63,374 Telephone 86,953 61,492 Printing and postage 22,457 36,379 Office supplies 41,775 28,049 Building maintenance 16,237 24,832 Licenses and tax 10,250 7,956 Minor equipment 13,076 6,631 Staff development 8,091 4,924 Marketing – 4,855 Dues and subscriptions 280 586

Total Direct Expense 32,401,933 27,508,645

ADMINISTRATIVE EXPENSE 3,832,152 3,265,718

Total Expense 36,234,085 30,774,363

Change in Unrestricted Net Assets 375,980 332,596

NET ASSETS AT BEGINNING OF YEAR 4,425,369 4,092,773

NET ASSETS AT END OF YEAR $ 4,801,349 $ 4,425,369




StAtEmENtS oF CASh FlowSFOR ThE YEARS ENDED SEPTEMBER 30, 2008 AND 2007

Job oPtioNS, iNC .

2008 2007

CASh FLOw FROM OPERATING ACTIVITIES:Excess of revenues over expenses $ 375,980 $ 332,596

Add charges to revenue not requiring use of cash: Depreciation 402,435 358,800

Adjustments to reconcile excess of revenue over expenses to net cash flow from operating activities

(Increase)/decrease in contracts and accounts receivable (973,290) (45,000) (Increase)/decrease in inventory 43,667 2,078 (Increase)/decrease in prepaid expense 18,840 12,440 (Increase)/decrease in deposits 11,436 (14,434) Increase/(decrease) in accounts payable and other liabilities 464,489 740,926

Net cash (used) by investing activities 343,557 1,387,406

CASh FLOw FROM INVESTING ACTIVITIES Acquisition of property and equipment (411,957) (528,365) Disposal of equipment 3,007 150,003

Net cash (used) by investing activities (408,950) (378,362)

CASh FLOw FROM FINANCING ACTIVITIES Proceeds from additional notes payable 423,805 190,835 Principal payments on notes payable (372,989) (1,004,293)

Net cash provided by financing activities 50,816 (813,458)

NET INCREASE/(DECREASE) IN CASh AND CASh EQUIVALENTS (14,577) 195,586

CASh AND CASh EQUIVALENTS BEGINNING OF YEAR 888,042 692,456

CASh AND CASh EQUIVALENTS AT END OF YEAR $ 873,465 $ 888,042

SUPPLEMENTAL INFORMATION Interest paid $ 190,085 $ 179,119




StAtEmENtS oF FuNCtioNAl ExPENSES 2008FOR ThE YEAR ENDED SEPTEMBER 30, 2008

Job oPtioNS, iNC .

TOTAL PROGRAMSERVICE

MANAGEMENTAND GENERAL

2008

Payroll $ 15,355,698 $ 15,331,335 $ 24,363 Payroll benefits 6,686,818 6,731,759 (44,941)Management fee 3,639,579 – 3,639,579 Sub-contractor services 4,837,201 4,837,201 –General supplies 1,153,912 1,148,448 5,464 NISh and other commissions 1,156,326 1,156,326 – Utilities 768,028 768,028 – Depreciation 402,435 400,991 1,444 Equipment leases and rents 265,995 239,623 26,372 Other business services 335,280 335,083 197 Travel 304,922 304,846 76 Insurance 205,325 133,234 72,091 Equipment repair and maintenance 178,282 176,654 1,628 Bank services and interest 190,085 118,687 71,398 Facility rents 152,631 152,631 – Professional fees 9,869 1,415 8,454 Bad debt expense 366,036 366,036 – Telephone 92,893 86,953 5,940 Food and paper goods 517 517 –Printing and postage 26,362 22,457 3,905 Office supplies 42,910 41,775 1,135 Building maintenance 16,237 16,237 –Licenses and taxes 17,459 10,250 7,209 Staff development 8,091 8,091 –Minor equipment 13,076 13,076 –Marketing 990 – 990 Dues and subscriptions 7,128 280 6,848

Totals $ 36,234,085 $ $32,401,933 $ 3,832,152




StAtEmENtS oF FuNCtioNAl ExPENSES 2007FOR ThE YEAR ENDED SEPTEMBER 30, 2007

Job oPtioNS, iNC .

2007

TOTAL PROGRAMSERVICE

MANAGEMENTAND GENERAL

Payroll $ 13,343,162 $ 13,343,162 $ – Payroll benefits 5,914,039 5,880,188 33,851 Management fee 3,048,810 – 3,048,810 Sub-contractor services 3,230,461 3,230,461 – General supplies 1,208,751 1,207,483 1,268 NISh and other commissions 934,280 934,280 – Utilities 703,013 703,013 – Depreciation 358,800 358,800 – Equipment leases and rents 298,261 292,575 5,686 Other business services 281,297 272,722 8,575 Travel 252,523 242,394 10,129 Insurance 208,650 147,825 60,825 Equipment repair and maintenance 198,321 198,214 107 Bank services and interest 179,119 130,262 48,857 Facility rents 128,666 128,666 – Professional fees 125,651 86,230 39,421 Bad debt expense 110,166 110,166 – Telephone 63,948 61,492 2,456 Food and paper goods 63,374 63,374 – Printing and postage 36,379 27,691 8,688 Office supplies 29,015 28,224 791 Building maintenance 24,872 24,832 40 Licenses and taxes 9,173 7,956 1,217 Staff development 7,211 4,924 2,287 Minor equipment 6,631 6,631 – Marketing 6,050 4,855 1,195 Dues and subscriptions 2,740 586 2,154 Donations 1,000 – 1,000

Totals $ 30,774,363 $ 27,497,006 $ 3,277,357


NotE 1 – NAtuRE oF buSiNESSJob Options, Inc. (the “Organization”) contracts with federal agencies and private companies to provide a variety of services, including janito-rial, grounds maintenance, shelf stocking and laundry throughout South-ern California. 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 in-dividuals with disabilities and currently employs over 800 individuals.

NotE 2 – SummARY oF SigNiFiCANt ACCouNtiNg PoliCiESbasis of AccountingThe Organization utilizes the accrual method of accounting for financial statement reporting. Under this method, revenue is recognized when earned and expenses are recognized when incurred.

use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash EquivalentsCash equivalents consist of short-term highly liquid investments that are readily converted to cash with an original maturity of three months or less.

The Organization’s cash equivalents include $1,061,400 invested in the Dreyfus Government Prime Cash Management Fund for which the average maturity cannot exceed 60 days.

Fair valueThe carrying amounts reported in the statements of financial position for cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their immediate short-term maturity.

depreciation and Fixed AssetsThe Organization capitalizes all fixed asset acquisitions and major improvements with a cost basis of $1000 or more with a determinable life greater than one year at the acquisition cost. Replacement, maintenance and repairs, which do not improve or extend the life of the respective asset, are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful life of the asset. Amortization expense and accumulated amortization have been included in depreciation expense and accumulated depreciation, respectively.

Short-term investmentsIn accordance with accounting principles generally accepted in the United States of America, the Organization accounts for its short-term investments with a readily determinable market value by recording and reporting those investments at fair value. Information about the income earned from short-term investments is discussed in Note 3.

Retirement PlansThe Organization offers a non-contributory 403-B savings plan. The plan allows eligible employees to defer up to the maximum allowed under appropriate laws governing the plan selected.

The Organization has two departments, NMC 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. Employees in other divisions are paid $.90 per hour as part of the mandated health and welfare benefit. Additional contributions of varying amounts for health and welfare are paid to outside administrators. These contributions are also carried in employee benefits.

income taxes The Organization is a non-profit Corporation exempt from income taxes, except for unrelated business income, under Internal Revenue Code Section 501 (C)(3). Unrelated business activities do not result in significant taxable income.

Functional ExpensesThe costs of providing the Organization’s programs have been summarized on a functional basis in these financial statements. Based on management’s estimates, costs have been allocated between programs and supporting services as they relate to those functions.

Contracts Receivable and Accounts ReceivableContracts 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 Organizations’ 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.

basis of PresentationAccounting principles generally accepted in the United States of America require that the Organization present information about its financial position and activities in three classes of net assets: unrestricted, temporarily restricted and permanently restricted. In these reporting periods, the Organization had only unrestricted net assets.

The Organization reports contributions as restricted if they are received with donor stipulations that limit the use of the donated asset. when a donor-imposed restriction expires, that is, when the time restriction expires, or the purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets. when restrictions on contributions are satisfied in the same period as the receipt of the contribution, the Organization reports both the revenue and the related expense in the unrestricted net assets.

Administrative ExpenseAdministrative expense shown on the statement of activities reflects all costs associated with administration/management and general. Based on management’s estimates, administrative costs have been allocated be-tween programs and supporting services as they relate to those functions as reflected in the statements of functional expense.

NotE 3 – ShoRt-tERm iNvEStmENtSShort-term investment income was comprised of interest and dividends in the amount of $40,474 and $56,233 for the years ended September 30, 2008 and 2007, respectively.

NotE 4 – CoNCENtRAtioN oF CREdit RiSKThe Organization, at various times during the year, may maintain cash bal-ances in excess of the FDIC limit in a high-quality financial institution. The FDIC limit is currently $250,000. As of September 30, 2008, the Organization’s cash was under the FDIC limit.

NotE 5 – RElAtEd PARtiES – mENtAl hEAlth SYStEmS, iNC .Beginning in the year ended September 30, 1994, Mental health Systems, Inc. (MhS) assisted in establishing Job Options, Inc. (JOI), as a non-profit entity administering vocational rehabilitation programs for MhS. Although JOI is no longer administering vocational rehabilitation programs for MhS, they have entered into other business transactions since that time.

As of September 30, 2008 and 2007, the Organization had the following outstanding liabilities and lease commitments with MhS:

The Organization has entered into an operating lease agreement with MhS for laundry equipment. The lease commenced December 15, 1997, and matures December 15, 2012. Monthly lease payments decrease annually in years one through eight and become fixed in years nine through fifteen.

Monthly lease payments during the year ended September 30, 2008, and September 30, 2007, were $1,800. Total lease payments during the years ended September 30, 2008 and 2007, were $21,600 and $21,600,

NotES to FiNANCiAl StAtEmENtS


respectively. Aggregate future lease payment liabilities are $16,118 for the year ending September 30, 2009. Organization has the ability to cancel lease with thirty days notice. The Organization would then incur a penalty of three months rent.

The Organization has entered into a second operating lease agreement with MhS for laundry equipment. The lease commenced February 1, 1998, and matures February 1, 2013 and requires monthly lease payments of $885. Total lease payments during each of the years ended September 30, 2008, and 2007 were $10,620. Aggregate future lease payment liabilities were $7,967 for the year ending September 30, 2009. Organization has the ability to cancel lease with thirty days notice. The Organization would then incur a penalty of three months rent.

NotE 6 – RElAtEd PARtY – bEhAvioRAl mANAgEmENt SYStEmS, iNC .The Organization has entered into an agreement with Behavioral Manage-ment Systems, Inc. (BMS) as of April 1, 2004. BMS is a for-profit entity which has been organized to provide administrative services to the Organi-zation. Officers of Job Options, Inc. are also officers of BMS. Management fees were $3,639,579 for the year ended September 30, 2008.

NotE 7 – oPERAtiNg lEASE CommitmENtSThe Organization has entered into various operating lease agreements for equipment, vehicles and office space. The leases expire at various dates throughout the years ending September 30, 2012.

Future minimum payments, by year and in the aggregate, under non-cancellable operating leases with initial or remaining terms of one year or more consisted of the following as of September 30:

Years ending September 30;

2009 $ 477,303

2010 308,520

2011 301,087

2012 179,566

2013 and thereafter 256,556

$ 1,523,032

NotE 8 – NotES PAYAblENotes payable consist of the following:

The Organization has entered in a non-cancelable lease with Associated Bank in the amount of $500,000 for the purchase of laundry equipment, effective interest at 7.85%, 60 monthly payments of $10,102, with a $1 buy-out at lease maturity date of January 23, 2009. The balance as of September 30, 2008 and 2007 was $39,757 and $152,991, respectively.

The Organization had available a revolving line of credit from NCB Development Corporation that was reduced from $1,000,000 to $582,500. The interest rate started at 8.25% and will fluctuate at 3.5% over the weekly average yield of US Treasury Securities. 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, 2008 and September 30, 2007 was $555,827 and $567,223, respectively.

The Organization entered into a capital lease with Celtic Leasing during the year ended September 30, 2007. The agreement allowed for the purchase of equipment up to $367,822. As of September 30, 2008, the principal balance was $320,382. The effective interest rate as of September 30, 2008 was 6.94%

The Organization entered into a capital lease with Celtic Leasing during the year ended September 30, 2008. Additional equipment was purchased in the amount of $189,083. As of September 30, 2008, the principal balance was $189,083. The effective interest rate as of September 30, 2008 was 7.68%.

In 2004 the Organization entered into a construction loan agreement with 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. The balance as of September 30, 2008 and 2007 was $1,042,419 and $1,065,968, respectively. Effective interest rate is 8.375% through 4/7/11 at which point the rate will fluctuate at 3.5% over the weekly average yield of US Treasury Securities. The loan will mature March 27, 2016.

During the year ended September 30, 2005, the Organization entered into an equipment loan agreement with NCB in the amount of $500,000. Additional proceeds of $196,720 were added to the loan. The interest rate is the NCB Commercial Loan Base Rate which is currently 6.22%. This loan will mature October 1, 2010. The balance as of September 30, 2008 and 2007 was $363,087 and $520,629, respectively.

The Organization has various car loans outstanding with maturities through 2009. The balance in these loans was $23,250 and $14,440 as of September 30, 2008 and 2007, respectively.

Aggregate future maturities of long-term debt are as follows:

Years ending September 30;

2008 $ 369.614

2009 367,064

2010 219,288

2011 163,327

2012 85,429

Thereafter 1,357,821

Total 2,562,543

Less current portion 369,614

Long-term debt $ 2,192,929

NotE 9 – ASSEtS ACQuiREd viA CAPitAl lEASEIncluded in fixed assets are $688,696 of assets that have been acquired via a capital lease agreement at September 30, 2005. There are two separate lease agreements; each requires a $1 buy-out at the completion of the lease term. As of September 30, 2008 and 2007, amortization expense, which has been included in depreciation expense, was $44,278 and $54,624, respectively.

NotE 10 – hEAlth ANd wElFARE moNEY PuRChASE PENSioN PlANIncluded in accounts payable and other liabilities as of September 30, 2008 and 2007 were $248,770 and $215,352, respectively, due to various trusts for health and welfare pensions. Included in employee benefits expense were $3,467,456 and $2,907,805, of health and welfare benefits for the years ended September 30, 2008 and 2007, respectively.

NotE 11 – CoNtRACtS ANd ACCouNtS RECEivAblE – AllowANCE FoR doubtFul ACCouNtSConsistent with generally accepted accounting principles in the United States of America, contracts receivable as of September 30, 2008 and 2007, are shown net of an allowance for doubtful accounts in the amount of $280,000 and $156,942, respectively. The Organization recorded bad debt of $366,036 and $110,166 for the years ended September 30, 2008 and 2007, respectively.


The quality of service we deliver to our customers is a result of our employees’ ability to get

the job done efficiently, professionally and with pride. Job Options and its employees have been

the recipients of many awards and accolades through the years, including:

2008 NISH Board Award for Performance Excellence – Randy Williams

2007 NISH Award for Outstanding Performance

2006 NAVFAC SW FEAD San Diego Safety Award – Facilities Maintenance Category, Janitorial Services for Naval Medical Center

2006 NISH National Business Innovation Award

2006 Grassroots Excellence Award for Governmental Relations

2005 NISH National William Usdane Award – James Bandy

2004 Fastest Growing Company Award – San Diego Business Journal

2002 NISH National Evilyne Villines Award – Jim Smith

MaNaGEMENTWilliam R. Mead, Ph.D. Chief Executive Officer

Jeffrey Johnson Chief Operating Officer

Doug Baker Food Service Division Manager

Margaret Ann Pena NAVFAC Division Manager Custodial Division Manager

Gladis Jarquin Administrative Services Division Manager/Safety Officer

Char Healy Controller

Joe Marino Director of Quality Assurance

Darren Taplin Navfac Contract Manager

Bill Eastwood, MA Chief Administrative Officer

Joe Ryan Laundry Division Manager

Jeffrey Abate Hospital Environmental Services Division Manager

Carol Whiteley Commissary Division Manager

Valorie Seidl Human Resources Director

Juan Agundis Information Technology Director

Steve Credle PTS Administrator and Purchasing

Richard Carrillo Director of Contracts Governmental Relations

BOaRD OF DiRECTORSCelia Ballesteros

Patrick O’Sullivan

Management and Board of Directors

Dr. Richard Skay

Bruce Whitcomb, Chairman

Richard Woodaman

Our Awards

JOI haS helped OveR 4,000 dISaBled IndIvIdualS take theIR place In OuR cOmmunIty WheRe they can cOntRIBute and gaIn a Real SenSe Of Self WORth fROm the WORk they peRfORm.


aDMiNiSTRaTiVE SERViCESCustomer service • Data entry • Office support • Word processing • Bilingual services • Project Management

liNEN aND laUNDRY SERViCESUniforms • Table linens and napkins • Bed linens and terry • Pick-up and delivery • Flat work, finishing, dry cleaning • Folding • Item rental and COG • Amenities• Dust control (mats, wet mops, dust mops)

BUilDiNG aND CUSTODial SERViCESFloor maintenance • Floor auto scrubbing • Floor power polishing • Carpet cleaning • Vacuuming • Window cleaning • Furniture and office cleaning • Food preparation area cleaning • Hospital aseptic cleaning • Biological agent decontamination and prevention • Restroom cleaning and sanitizing • Common area cleaning • Low dusting and cleaning – walls, doors, furniture, etc. • High dust and cleaning – blinds, ceiling fans and drapes • Waste containers – empty, wash and sanitize • Strip and make beds • Change towels • Restock supplies

GROUNDS/laNDSCapE MaiNTENaNCELawn care • Planting • Trimming • Weeding • Watering • Beds maintenance • Street sweeping • Irrigations system construction and maintenance

COMMiSSaRY aND WaREHOUSiNGInventory tracking, management and order writing • Material management and logistics-truck loading/unloading, forklift handling • Shelf-stocking

FOOD aND HOSpiTaliTY SERViCESCashiers • Salad/Pastry/Deli/Other – Self-serve bar replenishment • Table busing and cleaning • Silverware and table setting replenishment • Scullery • Pot washing • Kitchen cleaning • Plate silverware bar/replenishment • Restaurant area cleaning • Cooking and baking • Menu planning • Food service budget development • Food ordering • Procurement inventory in storage

Concept and Design by STUDIO2055, www.studio2055.comPhotography by Richard Dowdy: STUDIO2055

aS a valued paRtneR, JOB OptIOnS playS a key ROle In pROvIdIng

SOlutIOnS In a WIde Range Of aReaS tO BuSIneSS and gOveRnment.

Our Services

Corporate offiCe

3465 Camino Del Rio SouthSuite 300San Diego, CA 92108Phone: 619-688-1784Fax: 619-688-9884

Laundry pLant

Chula Vista Plant2248 Main Street, Suite 10Chula Vista, CA 91911Phone: 619-575-7627Fax: 619-424-8768

Laundry pLant

San Bernardino Plant1110 S. washington AvenueSan Bernardino, CA 92408Phone: 909-386-0342Fax: 909-890-4673

food ServiCeS

560 Greenbrier Drive Suite 103Oceanside, CA 92054Phone: 760-547-2480Fax: 760-547-2485

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providing real jobs for capable people

job options inc. annual report 2008

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