Board Meeting Agenda July 24, 2017 – 6:00 p.m. · Board Meeting Agenda . July 24, 2017 – 6:00 p.m. 5:30 pm Dinner . 6:00 pm Meeting . I. Call to Order & Determination of a Quorum

Board Meeting Agenda July 24, 2017 – 6:00 p.m.

5:30 pm Dinner 6:00 pm Meeting I. Call to Order & Determination of a Quorum II. Welcome Guests III. Welcome New Board Members and Acknowledge Executive Team

A. Ann Johnston & Tariq Zafar B. Charlie Huber, Chair; Larry Lobue, Vice Chair; Hal Marshall, Treasurer; Sharon Lee, Secretary

IV. Public Comment V. Consent Agenda

Approve Board Meeting Minutes – May 22, 2017

VI. Assignment of Items Removed from Consent Agenda to Agenda

VII. CEO Report May, June 2017 – Program Highlights VIII. Board Training: Awareness: greater awareness about individuals with disabilities increases understanding about the abilities of individuals with disabilities, and greater understanding increases opportunities for individuals with disabilities, so we work to achieve greater awareness to achieve greater understanding to expand opportunities. IX. Committee Reports:

A. Executive Team Meeting Report – C. Huber Executive Committee Meeting Minutes June, July, 2017

B. Internal Committee Report – H. Marshall 1. Budget and Finance Committee

a) Accept Financials: May, June 2017 b) 2016 Audit

2. Real Estate Committee June 7 , 2017 (Closed session) Lease renewals a) Grant Dr. & Wagon Wheel b) 123 Brooks St.

C. External Committee Report – S. Jacobson

1. Golf Classic – Report 2. The Arc’s 50th Anniversary (2018)

D. Governance Committee Report – S. Lee Job Description – Director of Youth Programs

X. New Business/Old Business – C. Huber

Board Meeting Schedule

XI. Adjourn Next Board Meeting: September 25, 2017

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Meeting Minutes Annual Membership Meeting Prosperity Bank May 22, 2017

I. Call to Order and Determination of Quorum - Stewart Jacobson established a quorum was present and began the

meeting at 6:00 p.m.

Present Absent Guests Staff Present

Pat Bullard Kevin Barker Laura LaVigne Becky Geary Himesh Gandhi Cheryl Olivier Avis Goldy Ann Johnston Jenny Gortney Mary Stephney-Quinby Allan Harris, Sr. Marian Wright Charlie Huber Milton Wright Stewart Jacobson Tariq Zafar Sharon Lee Larry Lobue Hal Marshall Diana Rushing Charles Swihart Monica Wright

II. Welcome Guests - Stewart Jacobson thanked everyone for coming and welcomed Kevin Barker, Himesh Gandhi, Ann Johnston, Mary Stephney-Quinby, Marian and Milton Wright and Tariq Zafar.

III. Recognize Retiring Board Member – Stewart thanked Himesh Gandhi for his seven years of service on the board of directors and presented him with a crystal plaque.

IV. Public Comment – Kevin Barker shared information regarding legislation recently passed by the Texas House and Senate.

V. Consent Agenda – Motion was made by Avis Goldy to accept the Consent Agenda. Seconded by Alan Harris. Motion

approved.

VI. Assignment of Items Removed from Consent Agenda to Agenda - No items removed.

VII. CEO Report: Laura LaVigne Program Highlights: Laura mentioned to the Board that Cheryl Sewell resigned on April 28. She reviewed highlights from her March and April 2017 CEO report. Margo Pasko was contacted to train all of the Transition Teachers at FBISD which is a wonderful advocacy service which will reach many students and families! Laura stated that she is partnering with Easter Seals to hopefully offer Respite Care to school-age children. Texana has agreed to partner with The Arc and Easter Seals by providing space at the Cypress Point building. Pat Bullard asked Laura for an update on FASD. Laura is still working with Clear Channel on choosing highly visible locations for FASD billboards.

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VIII. Committee Reports: A. Executive Committee: Stewart Jacobson

Stewart stated that The Arc’s By-Laws have been revised to reflect the title change from Executive Director to CEO. Motion to accept change was made by Diana Rushing. Seconded by Jenny Gortney. Motion approved.

B. Internal Committee: Jenny Gortney 1. Budget and Finance

a. Jenny Gortney reviewed the April 2017 YTD Financials. A motion was made by committee to accept the April 2017 YTD Financials. Motion approved.

b. Jenny also reviewed the 2016 Income/Functional Expenses. Motion was made by Becky Geary to accept the 2016 Income/Functional Expenses. Seconded by Hal Marshall. Motion approved.

c. Jenny then reviewed the new loan agreement on the Cypress Point building which reflects the December 2016, $263,000 payment applied to the principal. Motion to approve the new loan was made by Avis Goldy. Seconded by Alan Harris. Motion approved.

2. Real Estate Committee: a. The Board convened in closed session at 6:45 p.m.

i. Committee recommends extending the lease on Whispering Creek under the same terms and conditions.

ii. A lease for the townhome located at 3003 Gilmar was offered to Shirley Young to begin June 1, 2017. In exchange for the reduced lease rate, Ms. Young will offer “light support” for the two tenants who live in the adjoining townhome.

b. The board reconvened in open session at 6:47 p.m. Motion to approve the lease renewal for Whispering Creek and the new lease for 3003 Gilmar was made by Hal Marshall. Seconded by Diana Rushing. Motion approved.

C. External Committee: Becky Geary a. Becky reported on progress of the planning committee for The Arc’s 50th Anniversary

celebration. Memorabilia has been reviewed that will be used in several e-blasts, the quarterly newsletters and Facebook. The committee has plans for T-shirts and also greeting cards designed by our clients. A family picnic is scheduled for April 29, 2018, at Jones Creek Ranch.

b. The Athletic Banquet is scheduled for June 4 at Safari Texas. Becky asked the Board to volunteer to serve BBQ at this event.

c. The Golf Classic is scheduled for June 19 at Weston Lakes. Becky asked the Board to consider attending the dinner and auction at 5:30 pm.

D. Governance Committee: Sharon Lee a. Himesh, in his role as City Councilman, installed the proposed Board and Nominating Committee

Members by conducting the “oath of office”. Election of Officers - Term July 1, 2017 – June 30, 2020

Charles Huber Chairman Position 1 Larry Lobue Vice Chairman Position 2 Hal Marshall Treasurer Position 3 Sharon Lee Secretary Position 4 Stewart Jacobson Past Chairman Position 5 Election of Directors Term III: 2017- 2018

Becky Geary Position 7 Ann Johnston Position 9 Tariq Zafar Position 10 Election of Director Term II: July 1, 2017 – June 30, 2019 Jenny Gortney Position 13

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Election of Nominating Committee Members Stewart Jacobson July 1, 2017 – June 30, 2020 Joanne Meyer July 1, 2017 – June 30, 2019

IX. New Business – Stewart Jacobson

A. Stewart presented the names of the three proposed Foundation Board members for the class of 2020 for acceptance. Becky Geary pointed out that there were no women on the Foundation Board.

Election of The Arc of Fort Bend County Foundation Class of 2020 James Patterson Rick Cushenberry Dr. Michael Moore

Motion was made by Hal Marshall. Seconded by Charles Swihart. Motion Approved

a. Stewart asked all Board Members read and sign The Arc’s Conflict of Interest Policy and Code of Ethics

Policies.

XI. Stewart adjourned the meeting at 7:00 p.m.

Submitted by: Attested to: Cheryl Olivier Becky Geary Administrative Assistant Secretary The Arc of Fort Bend County Board of Directors

The next scheduled meeting will be on Monday, July 24, 2017

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CEO Report May and June 2017

I. Strategic Goal: The Arc shall advocate for appropriate individualized educational

programs/opportunities for people with intellectual and developmental disabilities (I/DD) in all stages of life

Margo’s Highlights: • Attended adult transition services graduation • Presented membership welcome packets • Advised 2 families on transition issues for high school students (not post-school) • Began collaboration with Avondale House (autism services) re: transition planning for its

FBISD and LCISD students.

II. Strategic Goal: The Arc shall advocate for a variety of vocational/employment options for people with I/DD. Vivian, FBISD Job Coach, and Margo presented at the 5/9 meeting of Medicaid waiver providers to encourage them to become Community Rehabilitation Providers (CRPs) through Texas Workforce Commission. Nine providers are interested and will attend a training offered by Margo and Vivian on 7/19/2017 to simplify the process of becoming a CRP. Margo helped client get hired as Fort Bend Transit ambassador (interview, began orientation, etc.) Still in training/orientation process. She continues to train all ambassadors.

III. Strategic Goal: The Arc shall advocate for public and private community institutions to become more

responsive to the individual needs of people with I/DD, thereby promoting quality of life for all. I met with Kevin Barker to inquire collaborating with Easter Seals to bring a respite program to Fort Bend County. I asked Kevin to allow the use of the Cypress Point building on either Friday eve or Saturday as their part of the collaboration. I also attended the Easter Seals fundraiser as Jenny Gortney’s guest so that I could meet the executive director. She was interested in pursuing the respite program in Fort Bend County. I then met with Christine Ellery, Program Director at Easter Seals; Kevin Barker and Sandra Bates, Missouri City Learning Center, to tour the building and grounds. Ms. Ellery was very impressed with the facility we are offering! Margo:

• began developing a two-hour training program for 45 George Ranch docents (will present in August). The topic: Recognizing when students are becoming agitated, identifying potential triggers, and learning some de-escalation techniques and Modifying lesson plans to accommodate students with intellectual and/or developmental disabilities.

• Began advocating for new client regarding service needs • Continued and expanded the work Cheryl Sewell began with Exchange Supported Child

Abuse Prevention Effort (ESCAPE) program director to plan parenting classes for families with children with disabilities in Fort Bend (introductions, United Way contact, facilitating networking with community organization, churches and client contacts). This is a national effort of Exchange Clubs.

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All staff submitted articles/pictures for the monthly E-Blast and quarterly newsletter

Community Meetings: Margo: United Way community investment committee, Exchange Club (secretary) Laura: Sugar Land Rotary, Leaders’ Circle, Health Education Advisory Board (HEAB) of OBMC, Texas

FASD Collaborative Education Workgroup, Fort Bend Transportation Advisory Committee, Fort Bend Connect

IV. Strategic Goal: The Arc shall advocate for and promote a variety of appropriate and inclusive social, cultural, fitness/wellness opportunities in the community.

Athletic Banquet: June 4 – 220 attended! Nancy and Margo mailed invitations, took reservations, ordered trophies, collected fees, checked in, set-up and cleanup of the event.

Bowling:

May 6 – 22 May 20 – 24 May 13 –20 May 27 - 16

Self Advocates: May 9 - program Emergency Preparedness and Weather Bingo for the Office of Emergency Management. June 5 – Self Advocates Board meeting at Sugar Land Branch Library

Social Recreation: May 20 – Sugar Land Skeeters game– 110 members and staff attended June 16 – Dance at K of C Sugar Land– the dance was cancelled. June 24 – Star Cinema and Grill – 114 members and staff attended. Special Olympics:

Aquatics (13 athletes) and Golf (5 athletes) beginning their seasons

TwentySomethings: May 22 – Skeeters night, WJ interests suite, 7 families participated V. Strategic Goal: The Arc shall continue to invest in properties that are self-sustaining and provide facilities for our constituents

See Real Estate Committee meeting minutes for actions. VI. Strategic Goal: The Arc shall provide effective leadership and fundraising efforts to accomplish our mission.

Staff met to “rank” The Arc’s “lines of service” comparing mission alignment with profitability. Next step will determine each line of services’ income and expense. We are working with the External Committee to plan activities/awareness of The Arc’s 50th anniversary in 2018. We have started planning the 2017 Golf Classic. Executed a very successful event on June 19. Nancy attended golf committee meetings and was responsible for ordering hole and beverage sponsor signs, volunteer shirts and sponsor list for the program.

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I accepted a check from Corvette Owners Club of Houston for $5250 The Rock for Charity Concert donated $7000 – not $5000 to The Arc! Great contact through Margo! Nancy: completed the December monthly and annual reports for the grant. I am currently receiving and organizing 2017 registration forms and documents for the clients’ files. CDBG Reimbursements:

May June Personnel – $ 1,963.68 Personnel – $1963.68 Contract Drivers - $ 376.77 Contract Drivers - $278.19 Activity Fees – $ 1,440.00 Activity Fees – $1056.00

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Executive Team Meeting

Minutes June 14, 2017

Present: S. Jacobson, B. Geary, J. Gortney, C. Huber, S. Lee, L. LaVigne Guests H. Marshall, L. Lobue

1. Welcome Incoming Officers: S. Jacobson Stewart welcomed Hal Marshall, incoming treasurer, and Larry Lobue, incoming vice chairman

2. Conflict of Interest Reports: S. Jacobson Committee discussed two possible “conflicts of interest” reports, but after discussion, determined there were no possible conflicts present.

3. Internal Committee Report: J.Gortney a. Budget & Finance Committee:

i. Reviewed and discussed May 2017 YTD Financials Action Item: Accept May YTD financials

ii. Bank Account Signature Cards—new ones reflecting approved board officers were signed

b. Real Estate Committee Meeting – June 7, 2017 i. Two properties have leases expiring August 31. The Arc’s lease with the City expires

August 31. See Real Estate Committee meeting minutes

4. Governance Committee: S. Lee Committee assignments – Charlie is collecting info from board members. Committees will be announced for work beginning July 1, 2017.

5. External Committee Report: B. Geary No new business

6. CEO Report: L. LaVigne

a. Easter Seals—Laura met with Kevin Barker, Texana Center, and Christine Ellery, Easter Seals, at the

Cypress Point building to tour and discuss possibilities to offer respite for parents of middle and high school age. Ms. Ellery was very impressed with the building and amenities and is interested in pursuing a program through the collaboration.

b. Matrix Map Update - Laura reported that staff met and rated each “line of service” to its mission alignment. Next step is to calculate income & expense for each line of service using 2016 financial data. Then, the board members will rate each line of service.

c. Program Director Vacancy – Laura is weighing several possibilities of filling the position with a highly qualified, passionate candidate.

7. July 24, 2017 Board Meeting Agenda: S. Jacobson Agenda reviewed - no edits at this time.

Next Meeting: July 12, 2017, 4:45 pm

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Executive Team Meeting

Minutes July 12, 2017

Present: C. Huber, S. Jacobson, H. Marshall, L. LaVigne Absent: S. Lee, L. Lobue

1. Internal Committee Report: H. Marshall

Budget & Finance Committee a. Hal reviewed the June YTD financials and committee accepted them. b. 2016 Audit is complete

Real Estate Committee Meeting

a. June meeting – Hal reviewed the minutes recommending lease renewals b. July meeting cancelled c. 6819 River Rd - leased to All the Little Things Count after releasing current tenant from the

lease. d. Brooks St. – Laura received a one-year lease which automatically renews each year, unless

either party gives 90 days notice.

2. Governance Committee: C. Huber

Committee Assignments – no comments received after assignments established

3. External Committee Report: S. Jacobson

a. Golf Classic June 19 – Income/Expenses will be shared at the July board meeting b. The Arc’s 50th Anniversary – Stewart will get with Becky Geary to continue plans

4. CEO Report: L. LaVigne a. Director of Youth Programs – Laura shared the revised job description. Committee tentatively

approved after review by Kent Edwards, HR Director, on the Governance Committee. Laura will forward to Kent.

b. Laura reported that the 2016 audit, now received, will be used to gather the income/expense data for all “Lines of Service” to complete the first draft of The Arc’s Matrix Map.

5. July 24, 2017 Board Meeting Agenda: C. Huber Committee reviewed the agenda and accepted it.

Next Meeting: August 9, 2017, 4:45 pm

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The Arc of Ft. Bend County Profit & Loss Budget Performance

June 2017

Page 1 of 6

Jun 17 Jan - Jun 17 YTD Budget $ Over Budget % of Budget Annual Budget

Ordinary Income/Expense

Income

Riveredge Mortgage Payment 0.00 0.00 0.00 0.00 0.0% 1,036.00

Bowling - Lane Fee Income 344.50 2,773.50 3,540.00 -766.50 78.35% 5,320.00

Donations & Contributions 7,456.72 12,827.64 10,000.00 2,827.64 128.28% 20,000.00

Donations - Designated 0.00 1,635.00 0.00 1,635.00 100.0% 5,000.00

Fundraising Event 44,418.60 108,069.60 82,000.00 26,069.60 131.79% 407,000.00

Grant - CDBG Fort Bend 4,789.86 17,159.88 16,800.00 359.88 102.14% 33,700.00

Grant - FBJSL 0.00 0.00 10,000.00 -10,000.00 0.0% 10,000.00

Grants - Other 1,250.00 10,250.00 3,000.00 7,250.00 341.67% 8,000.00

Membership Revenue 190.00 6,957.00 8,296.00 -1,339.00 83.86% 13,800.00

Rental Income 36,445.00 220,520.00 220,470.00 50.00 100.02% 440,940.00

SA Conference fees 0.00 0.00 0.00 0.00 0.0% 1,800.00

Social Rec Fees 1,125.00 7,040.00 6,960.00 80.00 101.15% 14,000.00

Total Income 96,019.68 387,232.62 361,066.00 26,166.62 107.25% 960,596.00

Gross Profit 96,019.68 387,232.62 361,066.00 26,166.62 107.25% 960,596.00

Expense

Advocacy in Action 0.00 3,192.28 2,500.00 692.28 127.69% 3,500.00

Accounting, Audit, Payroll 191.38 15,648.02 16,742.00 -1,093.98 93.47% 18,300.00

Advertising & Marketing 106.60 309.14 498.00 -188.86 62.08% 1,000.00

Affiliation/Asso/Mbrship/Certs 520.00 4,164.00 3,890.00 274.00 107.04% 5,500.00

Bank & CC Charges 462.96 1,972.67 1,830.00 142.67 107.8% 5,750.00

Board Expenses 206.55 717.87 600.00 117.87 119.65% 1,220.00

Community Outreach 235.28 354.80 550.00 -195.20 64.51% 3,500.00

Conferences 0.00 177.34 0.00 177.34 100.0% 500.00

Continuing Education/Staff Dev 0.00 30.00 30.00 0.00 100.0% 500.00

Employee Expenses

Employee Salaries 23,386.63 159,724.26 165,786.00 -6,061.74 96.34% 331,572.00

Employee-FICA 1,414.69 9,684.10 12,682.50 -2,998.40 76.36% 25,365.00

Employee-Health/Dental 4,972.64 36,506.94 42,901.50 -6,394.56 85.1% 85,803.00

Employee-Medicare 330.83 2,264.85

Employee-Retirement Plan 0.00 0.00 0.00 0.00 0.0% 6,631.00

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June 2017

Page 2 of 6


Employee-SUTA 0.00 318.60 340.00 -21.40 93.71% 4,644.00

Employee-Workers Comp 0.00 0.00 0.00 0.00 0.0% 1,346.00

Mileage Reimbursement 0.00 111.82 0.00 111.82 100.0% 2,400.00

Total Employee Expenses 30,104.79 208,610.57 221,710.00 -13,099.43 94.09% 457,761.00

Event Expenses 7,476.16 11,035.74 9,000.00 2,035.74 122.62% 36,500.00

Facilities HOA Fees 0.00 12,442.72 11,500.00 942.72 108.2% 11,500.00

Facilities (Other) 1,595.00 1,595.00

Facilities Permit / License 0.00 0.00 0.00 0.00 0.0% 350.00

Facilities Prop Mgmt Fees 1,300.00 7,800.00 7,800.00 0.00 100.0% 15,600.00Facilities R&M / Improvements 22,172.36 71,058.23 12,699.96 58,358.27 559.52% 25,400.00

Facilities Real Estate Taxes 0.00 -411.92

Facilities Utilities 0.00 626.87 1,500.00 -873.13 41.79% 3,000.00

BBGS Agreement 0.00 0.00 5,000.00 -5,000.00 0.0% 5,000.00

InsuranceFacilities Insurance - Property 0.00 0.00 0.00 0.00 0.0% 31,228.00

Insurance - Cyber Liability 0.00 0.00 0.00 0.00 0.0% 1,200.00

Insurance - Auto 0.00 0.00 0.00 0.00 0.0% 4,251.00Insurance - Prof. Liability 0.00 0.00 0.00 0.00 0.0% 1,605.00

Insurance - D&O / Fiduciary 0.00 0.00 0.00 0.00 0.0% 3,408.00

Insurance - Umbrella 0.00 0.00 0.00 0.00 0.0% 1,433.00

Insurance - Other 0.00 93.00Total Insurance 0.00 93.00 0.00 93.00 100.0% 43,125.00Interest Expense 6,834.08 40,820.50 40,820.50 0.00 100.0% 78,398.33

Meals & Supplies / Meetings 17.30 718.72 725.00 -6.28 99.13% 1,500.00Office

Website 0.00 85.00 100.00 -15.00 85.0% 700.00Cell Phone 232.22 2,067.04 1,731.00 336.04 119.41% 3,462.00Computer / Software 0.00 185.00 750.00 -565.00 24.67% 1,500.00

Copier Lease 0.00 1,925.34 1,953.48 -28.14 98.56% 3,907.00

Repairs & Maintenance 1,196.29 2,841.29 2,640.00 201.29 107.63% 5,300.00

Supplies 489.11 2,502.50 2,400.00 102.50 104.27% 5,000.00

Storage Rental 447.00 2,682.00 2,682.00 0.00 100.0% 5,364.00

Telephone / Internet 1,619.89 4,439.17 3,157.50 1,281.67 140.59% 6,315.00

Utilities 0.00 225.33 240.00 -14.67 93.89% 480.00

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June 2017

Page 3 of 6


Total Office 3,984.51 16,952.67 15,653.98 1,298.69 108.3% 32,028.00

PROGRAMS

PR Activity/Mtg-Food & Supplies -252.98 5,753.22 6,280.00 -526.78 91.61% 13,760.00

PR Athletic Banquet 3,985.54 4,485.54 4,200.00 285.54 106.8% 4,200.00

PR Bowling Lane Fees 0.00 5,212.50 7,020.00 -1,807.50 74.25% 10,564.00

PR DJ 0.00 1,500.00 1,650.00 -150.00 90.91% 3,300.00

PR Equipment, Shirts, Uniforms 0.00 6,626.57 1,000.00 5,626.57 662.66% 2,550.00

PR Fuel 164.86 1,311.13 1,400.00 -88.87 93.65% 4,500.00

PR Game / Registration Fees 735.00 1,810.00 1,840.00 -30.00 98.37% 2,500.00

PR Hotel 8,516.24 18,785.91 19,100.00 -314.09 98.36% 27,600.00

PR Other Expenses / Gifts 0.00 500.00 0.00 500.00 100.0% 1,200.00

PR Parking & Tolls 124.00 653.08 800.00 -146.92 81.64% 1,800.00

PR Practice Facil. / Lifeguards 180.00 2,991.00 1,400.00 1,591.00 213.64% 1,900.00

PR Program Enhancements 0.00 77.00 0.00 77.00 100.0% 500.00

PR Scholarships 0.00 1,000.00 1,000.00 0.00 100.0% 3,000.00

PR Texas Advocates Conference 0.00 0.00 0.00 0.00 0.0% 9,200.00

PR Tickets / Venue Fees 0.00 18,589.00 18,000.00 589.00 103.27% 36,000.00

PR Training Expenses 21.00 100.95 40.00 60.95 252.38% 700.00

PR Transportation 2,456.52 4,302.55 4,450.00 -147.45 96.69% 6,950.00

PR - Twenty Somethings 0.00 -675.00 650.00 -1,325.00 -103.85% 1,200.00

PR Van R&M 121.72 2,231.59 600.00 1,631.59 371.93% 1,200.00

Total PROGRAMS 16,051.90 75,255.04 69,430.00 5,825.04 108.39% 132,624.00

PR Contract Drivers 653.19 7,286.65 10,740.00 -3,453.35 67.85% 21,500.00

Postage and Delivery 755.99 2,457.91 1,800.00 657.91 136.55% 3,600.00

Printing and Reproduction 0.00 1,671.00 1,825.00 -154.00 91.56% 4,300.00

Professional Fees - Legal 0.00 0.00 0.00 0.00 0.0% 50.00

Professional Fees - Other 0.00 130.00 0.00 130.00 100.0% 800.00

Total Expense 92,668.05 484,708.82 436,844.44 47,864.38 110.96% 912,806.33

Net Ordinary Income 3,351.63 -97,476.20 -75,778.44 -21,697.76 128.63% 47,789.67

Other Income/Expense

Other Income

Investment Income 0.45 73.53

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June 2017

Page 4 of 6

Jun 17 Jan - Jun 17 YTD Budget $ Over Budget % of Budget Annual BudgetTotal Other Income 0.45 73.53Other Expense

Other Expenses 0.00 183.05Total Other Expense 0.00 183.05

Net Other Income 0.45 -109.52

Net Income 3,352.08 -97,585.72 -75,778.44 -21,807.28 128.78% 47,789.67

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1:12 PM 07/18/17 Accrual Basis

The Arc of Ft. Bend County Balance Sheet As of June 30, 2017

Page 5 of 6

Jun 30, 17

ASSETS

Current Assets

Checking/Savings

Cash

Credit Card Account 5,091.98

Fundraising (WD) 11,685.36

Money Market 196,705.03

Operating Account 56,085.16

Facilities Reserve contra -42,000.00

Total Cash 227,567.53

Total Checking/Savings 227,567.53

Other Current Assets

Prepaid Insurance

Prepaid General Liability 2,424.00

Prepaid Auto Insurance 3,728.00

Prepaid D&O Insurance 3,278.00

Prepaid Insurance-Umbrella 1,551.00

Prepaid Professional Liability 1,579.00

Prepaid Property / GL / Crime 17,642.00

Prepaid Workers' Comp Ins 3,448.18

Prepaid Insurance - Other 1,036.00

Total Prepaid Insurance 34,686.18

Total Other Current Assets 34,686.18

Total Current Assets 262,253.71

Fixed Assets

Building-Commercial Property 1,188,671.59

Improvements-Commercial Propert 887,394.20

Building - Homes 2,174,775.64

Improvements-Homes 236,675.59

Land 810,768.00

Leasehold Improvement-123 Brook 9,062.00

Office Equipment 5,224.03

Furniture and Fixtures 6,720.00

Computer Equipment 15,757.00

Automotive 76,832.44

Commercial Properties

2715 Cypress Point (Commercial)

Building & Imp - Cypress Point 7,200.00

Total 2715 Cypress Point (Commercial) 7,200.00

Total Commercial Properties 7,200.00

Accumulated Depreciation -1,571,133.66

Total Fixed Assets 3,847,946.83

Other Assets

Facilities Reserve for Repairs 42,000.00

Suspense 886.87

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1:12 PM 07/18/17 Accrual Basis

The Arc of Ft. Bend County Balance Sheet As of June 30, 2017

Page 6 of 6

Jun 30, 17

Total Other Assets 42,886.87TOTAL ASSETS 4,153,087.41

LIABILITIES & EQUITY

Liabilities

Current Liabilities

Accounts Payable

Accounts Payable-ARC 23,859.76

Total Accounts Payable 23,859.76

Other Current Liabilities

Retirement Plan Payable 353.14

Taxes Payable-Fed W/H 1,643.53

Taxes Payable-FICA 1,567.83

Taxes Payable-FUTA 124.01

Taxes Payable-Medicare 366.66

Taxes Payable-SUTA 124.00

Total Other Current Liabilities 4,179.17

Total Current Liabilities 28,038.93

Long Term Liabilities

Deposits Payable 8,800.00

N/P-ARC Fdn (6419 Brazos Glen) 99,943.39

N/P-ARC Fdn (Chapman Falls) 66,769.88

N/P-ARC Fdn (5141 Cotter Ln) 96,017.59

N/P-ARC Fdn (2715 Cypress Impr) 314,786.53

N/P-ARC Fdn (Manorfield) 136,775.71

N/P-ARC Fdn (Rustic Trail) 144,665.62

N/P-ARC Fdn (5618 Wagon Wheel) 120,066.06

N/P-ARC Fdn (Whispering Creek) 252,131.73

N/P-ARC Fdn(2607 WillowSprings) 134,939.57

Total Long Term Liabilities 1,374,896.08

Total Liabilities 1,402,935.01

Equity

Temp Restricted Net Assets 15,000.00

Unrestricted Net Assets 2,832,738.12

Net Income -97,585.72

Total Equity 2,750,152.40TOTAL LIABILITIES & EQUITY 4,153,087.41

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The Arc of Fort Bend County

And

Arc of Fort Bend County Foundation

Financial Statements for the Year Ended December 31, 2016 (Audited)

(with comparative totals for 2015 (Reviewed))

Page 16

CONTENTS

Page Number Independent Accountants’ Audit Report ……………………. .......................................... 1 Statements of Financial Position ................................................................................... 2 Statements of Activities ................................................................................................. 3 Statements of Functional Expenses .............................................................................. 4 - 5 Statements of Cash Flows ............................................................................................ 6 Notes to Financial Statements ..................................................................................... 7 – 16

Page 17

1

12777 Jones Road Ste. 240

Houston, TX 77070 www.nonprofitacctg.com

INDEPENDENT AUDITOR’S REPORT

To the Board of Directors The Arc of Fort Bend County and Arc of Fort Bend County Foundation Sugar Land, Texas

We have audited the accompanying consolidating financial statements of The Arc of Fort Bend County and Arc of Fort Bend County Foundation (collectively the Organization), which comprise the statement of financial position as of December 31, 2016, and the related consolidating statements of activities, functional expenses and cash flows for the year then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express 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 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 The Arc of Fort Bend County and Arc of Fort Bend County Foundation as of December 31, 2016, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

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Prior Period Financial Statements he 2015 financial statements were reviewed by us, and our report thereon, dated May 30, 2016, stated we were not aware of any material modifications that should be made to those financial statements for them to be in conformity with accounting principles generally accepted in the United States of

Bennoch & Tipton LLC Certified Public Accountants Houston, Texas April 10, 2017

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THE ARC OF FORT BEND COUNTY AND ARC OF FORT BEND COUNTY FOUNDATION COMBINING STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2016 (with comparative totals for 2015)

The accompanying notes are an integral part of these financial statements. 3

Audited ReviewedAgency Foundation Eliminations 2016 2015

ASSETSCash and cash equivalents 362,545$ 439,582$ -$ 802,127$ 564,650$ Prepaid expenses 35,745 - - 35,745 31,353 Property and equipment, net 3,847,947 - - 3,847,947 3,754,485 Intercompany notes receivable - 1,385,997 (1,385,997) - - Certificates of deposit - 747,019 - 747,019 994,460 Long-term investments - 1,148,690 - 1,148,690 1,069,846 Deposits - - - - 5,100

TOTAL ASSETS 4,246,237$ 3,721,288$ (1,385,997)$ 6,581,528$ 6,419,894$

LIABILITIES AND NET ASSETSLiabilities

Accounts payable 2,225$ -$ -$ 2,225$ -$ Accrued expenses 5,270 - - 5,270 2,351 Deposits payable 8,800 - - 8,800 8,800 Long-term intercompany debt 1,384,663 - (1,385,997) (1,334) -

Total Liabilities 1,400,958 - (1,385,997) 14,961 11,151

Net AssetsUnrestricted 2,815,779 3,721,288 - 6,537,067 6,408,743 Temporarily restricted 29,500 - - 29,500 -

Total Net Assets 2,845,279 3,721,288 - 6,566,567 6,408,743 TOTAL LIABILITIES AND NET ASSETS 4,246,237$ 3,721,288$ (1,385,997)$ 6,581,528$ 6,419,894$

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THE ARC OF FORT BEND COUNTY AND ARC OF FORT BEND COUNTY FOUNDATION COMBINING STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED DECEMBER 31, 2016 (with comparative totals for 2015)


Audited ReviewedAgency Foundation Eliminations 2016 2015

Unrestricted Net AssetsUnrestricted Revenues and Gains

Contributions 18,062$ -$ -$ 18,062$ 20,804$ In-kind rent 28,800 - - 28,800 28,800 Program service fees 29,848 - - 29,848 30,612 Rental income 412,315 - - 412,315 408,490 Special events, net direct benefit

to donor of $15,104 438,870 - - 438,870 503,457 Interest income 164 84,540 (78,941) 5,763 164 Investment return - 51,154 - 51,154 24,370 Other income 2,435 - - 2,435 8,256 Gain (loss) on sale of asset - - - - (7,469) Gain (loss) on sale of investments - 1,495 - 1,495 29,846 Unrealized gain (loss) on investments - 38,562 - 38,562 (68,846)

Total Unrestricted Revenues and Gains 930,494 175,751 (78,941) 1,027,304 978,484

Net assets released from restrictions 77,476 - - 77,476 56,722

Total Unrestricted Revenues and Gains, andReleases from Temporary Restrictions 1,007,970 175,751 (78,941) 1,104,780 1,035,206

ExpensesProgram:

Program services 844,240 - (78,941) 765,299 751,368

Total Program 844,240 - (78,941) 765,299 751,368

Supporting Services:General and administrative 147,429 9,077 - 156,506 141,851 Fundraising 54,650 - - 54,650 47,486

Total Supporting Services 202,079 9,077 - 211,156 189,337

Total Expenses 1,046,319 9,077 (78,941) 976,455 940,705

Change in Net Assets (38,349) 166,674 - 128,325 94,501

Temporarily Restricted Net AssetsContributions 35,189 - - 35,189 7,205 Grants 71,786 - - 71,786 49,517 Net assets released from restrictions (77,476) - - (77,476) (56,722)

Change in Temporarily Restricted Net Assets 29,499 - - 29,499 -

Change in Net Assets (8,850) 166,674 - 157,824 94,501

Net Assets, Beginning of Year 2,854,129 3,554,614 - 6,408,743 6,314,242

Net Assets, End of Year 2,845,279$ 3,721,288$ -$ 6,566,567$ 6,408,743$

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THE ARC OF FORT BEND COUNTY AND ARC OF FORT BEND COUNTY FOUNDATION COMBINING STATEMENTS OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2016


AuditedGeneral & Supporting 2016

Program Administrative Fundraising Total Services Eliminations Expenses

Accounting, Audit, Payroll -$ 12,185$ -$ 12,185$ -$ -$ 12,185$ Advertising & Marketing 1,209 85 - 1,294 - - 1,294 Advocacy in Action 168 - - 168 - - 168 Affiliation/Asso/Mbrship/Certs 1,420 3,843 - 5,263 - - 5,263 Bank & CC Charges - 2,052 3,130 5,182 9,077 - 14,259 BBGS Agreement 5,000 - - 5,000 - - 5,000 Board Expenses - 1,213 - 1,213 - - 1,213 Cell Phone 2,707 523 133 3,363 - - 3,363 Community Outreach 1,929 241 - 2,170 - - 2,170 Computer / Software 2,146 740 188 3,074 - - 3,074 Conferences 300 - - 300 - - 300 Continuing Education/Staff Dev - 328 - 328 - - 328 Copier Lease 2,470 852 217 3,539 - - 3,539 Depreciation Expense 149,351 3,379 628 153,358 - - 153,358 Employee Expenses - Other - 2 - 2 - - 2 Employee Salaries 228,058 78,662 20,003 326,723 - - 326,723 Employee-FICA 14,140 4,714 1,240 20,094 - - 20,094 Employee-Health/Dental 42,221 14,563 3,703 60,487 - - 60,487 Employee-Medicare 3,307 1,102 290 4,699 - - 4,699 Employee-Retirement Plan 4,525 1,561 397 6,483 - - 6,483 Employee-SUTA - 243 - 243 - - 243 Employee-Workers Comp - 984 - 984 - - 984 Event Expenses 3,540 69 20,269 23,878 - - 23,878 Facilities (Other) 31,450 - - 31,450 - - 31,450 Facilities HOA Fees 11,622 - - 11,622 - - 11,622 Facilities Inspection/Appraisal 350 - - 350 - - 350 Facilities Insurance - Property 31,365 - - 31,365 - - 31,365 Facilities Prop Mgmt Fees 18,100 - - 18,100 - - 18,100 Facilities R&M / Improvements 33,908 - - 33,908 - - 33,908 Facilities Real Estate Taxes 4,947 - - 4,947 - - 4,947 Facilities Utilities 2,035 - - 2,035 - - 2,035 Insurance - Auto 3,412 1,177 299 4,888 - - 4,888 Insurance - Cyber Liability 838 289 73 1,200 - - 1,200 Insurance - D&O / Fiduciary 2,379 821 209 3,409 - - 3,409 Insurance - Other 3,216 1,109 282 4,607 - - 4,607 Insurance - Prof. Liability 1,120 386 98 1,604 - - 1,604 Insurance - Umbrella 1,175 405 103 1,683 - - 1,683 Interest Expense 84,037 - - 84,037 - (78,941) 5,096 Meals & Supplies / Meetings 109 184 - 293 - - 293 Mileage Reimbursement 739 498 194 1,431 - - 1,431 Other Expenses - 329 - 329 - - 329 Postage and Delivery 72 - 72 - - 72 Postage and Delivery 2,576 889 226 3,691 - - 3,691 PR - Twenty Somethings 2,058 - - 2,058 - - 2,058 PR Activity/Mtg-Food & Supplies 8,059 - - 8,059 - - 8,059 PR Athletic Banquet 3,831 - - 3,831 - - 3,831 PR Bowling Lane Fees 7,972 - - 7,972 - - 7,972 PR Contract Drivers 16,834 - - 16,834 - - 16,834 PR DJ 3,300 - - 3,300 - - 3,300 PR Equipment, Shirts, Uniforms 1,835 - - 1,835 - - 1,835 PR Fuel 1,867 213 - 2,080 - - 2,080 PR Game / Registration Fees 922 - - 922 - - 922 PR Hotel 18,212 - - 18,212 - - 18,212

Agency Foundation

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THE ARC OF FORT BEND COUNTY AND ARC OF FORT BEND COUNTY FOUNDATION COMBINING STATEMENTS OF FUNCTIONAL EXPENSES (continued) FOR THE YEAR ENDED DECEMBER 31, 2016


PR Other Expenses / Gifts 628 - - 628 - - 628 PR Parking & Tolls 788 85 - 873 - - 873 PR Practice Facil. / Lifeguards 971 - - 971 - - 971 PR Scholarships 5,500 - - 5,500 - - 5,500 PR Texas Advocates Conference 3,853 - - 3,853 - - 3,853 PR Tickets / Venue Fees 27,510 - - 27,510 - - 27,510 PR Training Expenses 873 - - 873 - - 873 PR Transportation 5,240 - - 5,240 - - 5,240 PR Van R&M 69 1,017 - 1,086 - - 1,086 Printing and Reproduction 2,874 226 - 3,100 - - 3,100 Professional Fees - Other - 750 - 750 - - 750 Rent 20,103 6,934 1,763 28,800 - - 28,800 Repairs & Maintenance 3,204 1,105 281 4,590 - - 4,590 Storage Rental 3,744 1,291 328 5,363 - - 5,363 Supplies 2,635 909 231 3,775 - - 3,775 Telephone / Internet 3,838 1,324 337 5,499 - - 5,499 Utilities 314 108 28 450 - - 450 Website 1,265 39 - 1,304 - - 1,304

844,240$ 147,429$ 54,650$ 1,046,319$ 9,077$ (78,941)$ 976,455$

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THE ARC OF FORT BEND COUNTY AND ARC OF FORT BEND COUNTY FOUNDATION COMBINING STATEMENT OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2016 (with comparative totals for 2015)


Audited ReviewedAgency Foundation 2016 2015

Cash Flows from Operating Activities

Change in Net Assets (8,850)$ 166,674$ 157,824$ 94,501$

Adjustments to reconcile change in net assets to net cash from operating activities:Unrealized (gain) loss on investments - 38,562 38,562 68,846 Realized (gain) loss on investments - 1,495 1,495 (29,846) Depreciation expense 153,357 - 153,357 150,948 (Gain)/loss on sale of property - - - 7,469 Change in operating assets and liabilities Contributions receivableDeposits 5,100 - 5,100 (100)

Funds held by Foundation 263,000 (263,000) - - Prepaid expenses (4,392) - (4,392) (894) Accounts payable 2,342 - 2,342 (480) Accrued expenses 2,802 - 2,802 360

Net Cash from Operating Activities 413,359 (56,269) 357,090 290,804

Cash Flows from Investing ActivitiesInterest and dividends reinvested - (51,154) (51,154) (24,370) Proceeds from the sale of property - - - 11,400 Purchases of property and equipment (246,819) - (246,819) (293,614) Purchases of investments net of proceeds - (67,747) (67,747) (189,871) Payment of loan proceeds to Agency - - - (260,000) Cash received on notes receivable - 297,652 297,652 31,877 Purchases of CD's, net redemptions - 247,441 247,441 112,945

Net Cash from Investing Activities (246,819) 426,192 179,373 (611,633)

Cash Flows from Financing ActivitiesProceeds from notes payable from Foundation - - - 260,000 Principal payments on notes payable (298,986) - (298,986) (31,877)

Net Cash from Financing Activities (298,986) - (298,986) 228,123

Net Change in Cash and Cash Equivalents (132,446) 369,923 237,477 (92,706)

Cash and Cash Equivalents, Beginning of Year 494,991 69,659 564,650 657,356

Cash and Cash Equivalents, End of Year 362,545$ 439,582$ 802,127$ 564,650$

Supplemental DisclosuresCash paid during the year for interest 84,037$ -$ 84,037$ 78,940$

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THE ARC OF FORT BEND COUNTY AND ARC OF FORT BEND COUNTY FOUNDATION COMBINING NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2016 (with comparative totals for 2015)

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NOTE 1– NATURE OF OPERATIONS AND SIGNIFCANT ACCOUNTING POLICIES The Arc of Fort Bend County (The Arc) is a not-for-profit enterprise incorporated on August 12, 1968 and organized for the purpose of ensuring opportunities for people with intellectual and developmental disabilities to maximize their quality of life within the community. It is an affiliate of The Arc of Texas (a State organization) and The Arc of the U.S. (a National organization). The Arc is supported primarily through donor contributions, grants, fundraising and program service income generated from leases. Currently Vocational/Residential, Recreation, and Advocacy are the major program areas offered by The Arc to residents of Fort Bend County. The Vocational/Residential program provides space to service providers for use in vocational training and rehabilitation at below market rates. This program also provides residences for individuals with intellectual and developmental disabilities. The Recreation and Special Olympics programs provide social and recreation activities. The Advocacy programs provide support for education and legislative activities that benefit people with intellectual and developmental disabilities and self-advocacy program which provides individuals with intellectual and developmental disabilities an opportunity to learn about self- representation. Arc of Fort Bend County Foundation (the Foundation) was incorporated on July 1, 2002 and was organized and operates exclusively for charitable and educational purposes. Basis of Accounting – The combining financial statements of The Arc and the Foundation (collectively the Organization) have been prepared on the accrual basis of accounting and, accordingly, reflect all significant receivables, payables, and other liabilities. Significant intercompany accounts between the combining entities have been eliminated. Basis of Presentation – The Organization has presented its financial statements in accordance with generally accepted accounting principles for not-for-profit organizations. Under this guidance, the Organization is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets. In addition, the Organization is required to present a statement of cash flows. 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. Cash and Cash Equivalents – For purposes of the combining statements of cash flows, the Organization considers all highly liquid investments available for current use with an initial maturity of three (3) months or less to be cash equivalents. Property and Equipment – Purchased property and equipment assets are carried at cost. Major additions are charged to the asset accounts while replacements, maintenance, and repairs, which do not improve or extend the life of the respective assets, are expensed currently. Donations of property and equipment are recorded as contributions at their estimated fair value. Such donations are reported as unrestricted contributions unless the donor has restricted the donated asset to a specific purpose. Assets donated with

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explicit restrictions regarding their use and contributions of cash that must be used to acquire property and equipment are reported as restricted contributions. Absent donor stipulations regarding how long those donated assets must be maintained, the Organization reports expirations of donor restrictions when the donated or acquired assets are placed in service as instructed by the donor. The Organization reclassifies temporarily restricted net assets to unrestricted net assets at that time. The Arc capitalizes property and equipment with a cost of over $1,000. Depreciation is computed on a straight-line basis over estimated useful lives of five (5) to thirty (30) years. Support and Revenue – Annual fund-raising contributions are generally available for unrestricted use in the related fund-raising year unless specifically restricted by the donor. Unconditional promises to give are recorded as received. Unconditional promises to give due in the next year are reflected as current promises to give and are recorded at their net realizable value. Grants and other contributions of cash and other assets are reported as temporarily restricted support if they are received with donor stipulations that limit the use of the donated assets. 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 reported in the combining statements of activities as net assets released from restrictions. Contributions of donated noncash assets are recorded at their fair values in the period received. Contributions of donated services that create or enhance nonfinancial assets or that require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation, are recorded at their fair values in the period received. Contributed Services – The Organization receives a substantial amount of services donated by volunteers in carrying out the Organization's purpose. No amounts have been reflected in the combining financial statements for these volunteer services since they do not meet the criteria for recognition under ASC 958-605.

Functional Allocation of Expense – The costs of providing the various programs and other activities have been detailed in the combining statements of functional expenses. Certain costs have been allocated among the programs and supporting services receiving benefits. Income Taxes – The Organization is exempt from Federal income taxes as provided under Section 501(c)(3) of the Internal Revenue Code and, therefore, has made no provision for Federal income taxes in the accompanying combining financial statements. In addition, The Arc and the Foundation have been determined by the Internal Revenue Service not to be "private foundations" within the meaning of Section 509(a) of the Internal Revenue Code. There was no unrelated business income in 2016 and 2015. Investments and Investment Income – In accordance with 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 combining statements of financial position. Unrealized gains and losses are included in the change in net assets. Investment income and gains restricted by a donor are reported as increases in

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unrestricted net assets if the restrictions are met (either by passage of time or by use) in the reporting period in which the income and gains are recognized.

The Organization has adopted the provisions of ASC 820, "Fair Value Measurements and Disclosures" with respect to its investments. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market, establishes a framework for measuring fair value in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The valuation techniques required by ASC 820 are based upon observable and unobservable inputs, and ASC 820 establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:

• Level l - Quoted prices in active markets for identical assets or liabilities. An active market is a

market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level I assets include cash and cash equivalents, money market, certificates of deposit, and investments with a fair value at December 31, 2016 and 2015 of $2,694,095 and $2,628,956, respectively.

• Level 2 - Inputs other than quoted prices included in Level l, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3 - Significant unobservable inputs that are supported by little or no market activity. The asset’s or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used are to maximize the use of observable inputs and minimize the use of unobservable inputs. Advertising – Advertising costs are expensed as incurred. Advertising expense during the years ended December 31, 2016 and 2015 totaled $1,294 and $1,139, respectively.

Reclassifications – Certain prior year amounts have been reclassified to conform with the current year presentation. NOTE 2 – CONCENTRATION OF CREDIT RISK The Organization maintains cash balances at several financial institutions located in Texas. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At December 31, 2016 and 2015, the Organization had approximately $118,000 and $245,000 of uninsured cash balances, respectively. The Organization maintains several certificates of deposits of approximately $747,019 and $994,460 as of December 31, 2016 and 2015, respectively, with numerous financial

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institutions that are covered by FDIC insurance. In addition, the Organization has cash held in two brokerage accounts and may invest amounts, not expected to be immediately needed, in money market funds which may not be covered by FDIC insurance. At December 31, 2016 and 2015, the Organization had approximately $21,000 and $120,000, respectively, that was not covered by FDIC insurance. The Organization has not experienced any losses in such accounts and believes the risk of future loss is mitigated by monitoring the balances and the financial institutions where the cash is deposited and investments are made. The Organization's investments consist of fixed income securities, mutual funds and corporate equities which are held at two brokerage firms. These investments are exposed to several risks, such as interest rates, market, and credit risk. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the Organization's combining financial statements. NOTE 3 – PROPERTY AND EQUIPMENT Property and equipment consist of the following:

Audited Reviewed2016 2015

Land 810,768$ 810,768$ Buildings and improvements 4,494,717 4,247,899 Automobiles 76,832 76,832 Leasehold improvements 9,062 9,062 Office furniture and equipment 27,702 27,701

5,419,081 5,172,262 Less: accumulated depreciation (1,571,134) (1,417,777) Totals 3,847,947$ 3,754,485$

Depreciation expense was $153,357 and $150,948 for the years ended December 31, 2016 and 2015, respectively. NOTE 4 – LONG-TERM INVESTMENTS Investments are stated at fair value and consist primarily of fixed income securities, mutual funds and corporate equities. Fair value and unrealized appreciation/(depreciation) at December 31, 2015 and 2014 are summarized as follows:

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Audited

Quoted Pricesin Active

Markets for AccumulatedIdentical Assets Unrealized

Cost (Level 2) Appreciation

Cash and money market funds held for long-term investment 20,849$ 20,849$ -$

Equity funds and other assets 1,025,703 1,127,821 102,118

Totals 1,046,552$ 1,148,670$ 102,118$

Reviewed

Quoted Pricesin Active

Markets for AccumulatedIdentical Assets Unrealized

Cost (Level 2) Appreciation

Cash and money market funds held for long-term investment 120,338$ 120,338$ -$

Equity funds and other assets 888,397 949,508 61,111

Totals 1,008,735$ 1,069,846$ 61,111$

2016

2015

Audited Reviewed

2016 2015

Investment and dividend income 51,154$ 24,370$ Current year net realized and unrealized gain/(loss) 40,057 (39,000)

Totals 91,211$ (14,630)$

NOTE 5 – TEMPORARILY RESTRICTED ASSETS Net assets were released from donor restrictions by incurring expenses satisfying the purpose or time restrictions specified by donors as follows:

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Purpose restriction accomplished:Social and recreational 34,651$ 27,915$ Employment 255 8,925 Special Olympics 11,750 13,712 Advocacy 13,515 3,295 Bowling 145 55 Youth social 1,352 20 Specia events - 2,750 Self advocates - 50 Vocational & Residential 15,808 -

Totals 77,476$ 56,722$

Temporarily restricted net assets are available for the following purposes or periods:


Scholarships 19,500$ -$ Special Olympics 1,000 -

Totals 20,500$ -$

NOTE 6 – PROGRAM SERVICE INCOME The Arc owns and leases fifteen group homes to service providers which are certified by the State of Texas to provide services to Fort Bend County, Texas. Nine of these leases expired during 2016 and were renewed to 2017 and 2018. Six leases expire during 2017 and will be renewed under the same terms. Leases range from $1,100 to $1,950 per month. All of the homes are utilized as housing for individuals with intellectual and developmental disabilities The Arc also owns and rents one townhouse directly to individuals. The townhome is utilized as housing for individuals with intellectual and developmental disabilities. At December 31, 2016 and 2015, these residential leases, which are cancelable operating leases, are on a month-to-month basis at $350 a month per individual. The Arc leased its building on Industrial Blvd. to a service provider under a five-year operating lease beginning April 1, 2011 and expired March 31, 2016 for $7,500 per month. The lease was terminated effective March 31, 2016, and the Organization entered into a new five-year lease agreement with a new tenant to lease the commercial space under the same terms. This facility is used by the service provider to provide vocational training to individuals with intellectual and developmental disabilities.

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The Arc leases its building on Cypress Point to a service provider under a five-year operating lease beginning February 1, 2014 and ending January 31, 2019 for $8,000 per month. This facility is used by the service provider to provide vocational training to individuals with intellectual and developmental disabilities. Rental income for the group homes and commercial buildings are considered program service income as it directly relates to the accomplishment of The Arc's mission. Rental income for the years ended December 31, 2016 and 2015 was $412,315 and $408,490, respectively. NOTE 7 – LEASES The Arc leases the office building it occupies from the City of Sugar Land for $1 per year and expired August 2016. The lease was renewed under the same terms for an additional one (1) year expiring August 2017. The lease may be terminated by either party with ninety (90) days written notification. The Arc recognized an in-kind contribution amounting to $28,800 for the fair value of rent for each of the years ended December 31, 2016 and 2015. On October 21, 2010, The Arc entered into a non-cancellable operating lease for a copier which terminated in October 2015. Monthly lease payments under the lease agreement was $322. The Arc entered into a new operating lease agreement for a copier effective October 1, 2015 and expiring September 30, 2019 with monthly lease payments of $326. Future minimum lease payments over the remainder of the copier lease agreement are $3,907 for the years ending December 31, 2017, 2018, and $2,930 for the year ending December 31, 2019. The Organization also leases a storage facility under a month-to-month operating lease. Total rent expense for 2016 and 2015 was $8,903 and $9,663, respectively. NOTE 8 – MANAGEMENT AGREEMENT The Organization entered into a maintenance agreement with a contractor for $1,300 a month. This agreement gives the contractor on-site management and repair and maintenance services for the Organization's rental properties. Contractor fees paid in 2016 and 2015 totaled $18,100 and $16,778, respectively. The management agreement expired December 31, 2016 and was renewed for an additional one (1) year term at $1,300 per month. NOTE 9 – RELATED PARTY TRANSACTIONS The Arc is an affiliate of The Arc of Texas (a State organization) and The Arc of the U.S. (a National organization). The Arc pays annual affiliation fees to the National Arc organization. The State and National organizations provide The Arc with advocacy, educational opportunities, membership and other supporting services. The Arc paid affiliation fees of $3,853 and $5,401 during 2016 and 2015, respectively. The Arc has several promissory notes payable to the Foundation in the total amount of $1,385,997 and $1,683,649 for the years ended December 31, 2016 and 2015, respectively. The notes are secured by real

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property which the Arc leases to service providers who operate them as group homes for individuals with intellectual and developmental disabilities. The notes payable at December 31, 2016 are as follows:

• Note payable in the total amount of $111,615. The note is payable in equal monthly installments of $682 including principal and interest through April 2022, with a balloon payment due April 1, 2022. The interest rate on the note is 5.25%.

• Note payable in the total amount of $107,208. The note is payable in equal monthly installments of $655 including principal and interest through April 2022, with a balloon payment due April 1, 2022. The interest rate on the note is 5.25%.

• Note payable in the total amount of $633,769. The note is payable in equal monthly installments of $3,563 including principal and interest through April 2024, with a balloon payment due April 1, 2024. The interest rate on the note is 5%.

• Note payable in the total amount of $147,988. The note is payable in equal monthly installments of $832 including principal and interest through December 2024, with a balloon payment due December 1, 2024. The interest rate on the note is 5%.

• Note payable in the total amount of $131,732. The note is payable in equal monthly installments of $741 including principal and interest through November 2024, with a payment due November 1, 2024. The interest rate on the note is 5%.

• Note payable in the total amount of $73,205. The note is payable in equal monthly installments of $408 including principal and interest through December 2025, with a balloon payment due December 1, 2025. The interest rate on the note is 5%.

• Note payable in the total amount of $148,105. The note is payable in equal monthly installments of $808 including principal and interest through February 2027, with a balloon payment due February 1, 2027. The interest rate on the note is 5%.

• Note payable in the total amount of $156,650. The note is payable in equal monthly installments of $853 including principal and interest through February 1, 2027, with a balloon payment due February 1, 2027. The interest rate on the note is 5%.

• Note payable in the total amount of $260,000. The note is payable in equal monthly installments of $1,396 including principal and interest through June 1, 2030, with a balloon payment due June 1, 2030. The interest rate on the note is 5%.

For the years ended December 31, 2016 and 2015, interest expense paid by the Arc to the Foundation was $84,037 and $78,941, respectively. These intercompany transactions are eliminated in the combining financial statements. NOTE 10 – EMPLOYEE BENEFITS The Organization has a 403(b)(7) tax-deferred retirement plan, which permits its employees to defer current compensation subject to certain annual limits established by the Internal Revenue Service. The Arc provides

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a discretionary contribution each calendar year to the plan. Total contributions were $6,482 and $6,332 for the years ended December 31, 2016 and 2015, respectively. NOTE 11 – CONCENTRATIONS The Organization is dependent on several sources of support and revenue. One service provider provides sixteen percent (16%) of the Organization’s support in the form of lease agreements on the Organization's group homes and commercial properties for the year ended December 31, 2016. Two service providers provide twenty-seven percent (27%) of the Organization’s support in the form of lease agreements on the Organization's group homes and commercial properties for the year ended December 31, 2015. These agreements can generally be changed from year-to-year based on legislative and other factors. The Organization believes that revenue related to the loss of the aforementioned lease agreements could be immediately replaced by private provider leases or other income producing programs. In addition, the Organization could reduce expenses by liquidating the assets if necessary. Rental income represents forty percent (40%) and thirty-nine percent (39%) of its operating revenues for the years ended December 31, 2016 and 2015, respectively. The Organization also conducts two annual fund-raisers in Fort Bend County, Texas, which provide approximately forty-four (44%) and forty-eight percent (48%) of its operating revenues for the years ended December 31, 2016 and 2015, respectively. The gross proceeds raised and direct costs of benefits to donors incurred may fluctuate from year-to-year based on economic and other factors. NOTE 12 – SUBSEQUENT EVENTS In preparing these financial statements, the Organization has evaluated events and transactions for potential recognition or disclosure through April 10, 2017 the date the financial statements were available to be issued. No change to the financial statements for the year ended December 31, 2016 is deemed necessary as a result of this evaluation.

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Real Estate Sub-Committee Meeting Minutes

June 7, 2017

Present: Absent:

J. Gortney, chair J. Patterson H. Marshall P. Bullard L. Lobue M. Casey L. LaVigne R. Cushenberry

The committee met to discuss the following items:

1. Income/Expense Report : 2017 YTD paid through May reviewed and accepted.

2. Lease Renewals: Brooks Street, Grant Drive, Wagon Wheel a. Laura will request a 2-year renewal lease for office space at 123 Brooks. b. Rick reviewed the CMAs for Grant Drive and Wagon Wheel. After discussion, committee

recommended the following action for the Board:

Action Item: Offer renewed leases for Grant Drive and Wagon Wheel under the same terms and conditions.

3. 3003 Gilmar Update: Laura reported that after Tony and Scott of this townhome it was in need of major renovation. Paint, carpeting, laminate flooring, tile, replacement oven, etc. Final costs will be submitted in June. Shirley Young has paid June rent and has begun the “light supervision” of the tenants next door.

4. Re-painting Group Homes: Laura reported that she received a grant from the Herzstein Foundation to pay for exterior painting of several group homes. Thomas Jefferson is almost finished. Cotter Ln. is next.

5. Other: a. Commissioner Patterson shared that that the parent group at Cypress Point and Texana Center

paid to have all of the trees in the back trimmed – enhancing the concrete path that was finished in May.

b. Commissioner also invited committee members to attend the dinner and auction at Weston Lakes following the Golf Classic.

c. Rick shared information regarding a proposed mandate from DADs requiring that all group homes install sprinkler systems. It is unclear how this relates to DADs “CHAPTER 123. COMMUNITY HOMES FOR PERSONS WITH DISABILITIES”. Laura will call DADs for an explanation.

Next meeting: July 5, 8:00 am

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Job Description TITLE: Director of Youth Programs CLASSIFICATION: Salaried - Exempt SUPERVISOR: CEO Summary: The Director of Youth Programs serves as a resource for parents of children with intellectual and developmental disabilities (I/DD) and the community and may offer direct educational and/or systems advocacy and youth programs. Essential Duties and Responsibilities

I. Educational Advocacy: a. Teach parents how to advocate for their children by developing and regularly conducting small-

group parent training programs covering all aspects of Special education rights and responsibilities

b. Attend Admission, Review, Dismissal (ARD) meetings with parents, when necessary, after parents have participated in above training programs

c. Collaborate with Director of Transition Programs to develop appropriate individual education plans (I.E.P.s) when requested by parents or school district personnel

d. Offer training and program development to schools, providers and other entities that request assistance

II. Information and Referral: a. Provide information for families regarding current and new programs and services available in

the Fort Bend County area b. Assist families with obtaining the appropriate services and supports offered nationally, regionally

and locally c. Coordinate an annual Resource Fair/Special Needs conference d. Facilitate information sessions on timely issues/topics that affect the disability community i.e.,

Social Security, Medicaid Waiver programs, Managed Care, etc. e. Participate in relevant community clubs/organizations i.e., Fort Bend Connect, Community

Resource Coordination Groups (CRCG), in order to spread awareness of The Arc

III. Youth Programs a. Work with other agencies to offer their programs in Ft. Bend County to address the needs of

respite, recreation and parent support b. Increase community awareness of The Arc by participating in youth-centered community

programs (Youth in Philanthropy (YIP), Special Needs Rodeo, etc. c. Ensure that education/youth program information is current on our website

IV. General and Administrative

a. Develop and conduct ongoing evaluation of programs and services offered b. Develop method to share information gained through working throughout the County with staff c. Provide program data that is necessary for grant requests d. Provide pictures and articles for the E-newsletter, newsletter, Facebook and Twitter e. Assist with duties associated with The Arc’s fundraisers – Best in the West and Golf Classic f. Other duties, as assigned

Qualifications/Requirements:

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• Strong knowledge of current Special Education law • Knowledge of best practices associated with instruction of children with I/DD • Ability to advocate using effective negotiation skills • Competency in training people • Strong oral, written and interpersonal skills • Strong organizational skills and attention to detail • Ability to work independently with minimum supervision and to accept direction on given assignments. • Excellent customer service skills • Demonstrated proficiency in MS Office (Word, Excel, Outlook) • Ability to multi-task, set priorities and perform under pressure • Professional appearance • Ability to work collaboratively with colleagues and CEO. • Ability to maintain high level of confidentiality associated with personnel, donors and other areas of the

organization. Education/Training/Experience: • Bachelor’s degree in Special Education or Alternative Certification in Special Education • Experience teaching in public school setting Physical Requirements: Requires prolonged sitting, some bending, stooping and stretching. Requires eye-hand coordination and manual dexterity sufficient to operate a keyboard, photocopier, telephone, calculator and other office equipment. Requires normal range of hearing and eyesight to record, prepare and communicate appropriate reports. Requires occasional lifting of boxes up to 50 pounds. Work is performed in an office environment. Work may be stressful at times. Contact may involve dealing with angry or upset people. Acknowledgement: My signature below acknowledges that I have read the above job description and agree that I can perform the responsibilities and meet the requirements as presented. I understand this job description provides a general outline of job responsibilities and requirements and is not intended to be all-inclusive. I also understand that job responsibilities and requirements may change at any given time based on organizational or departmental needs. Texas is an employment-at-will state. I understand if I am offered and accept employment with The Arc, I have the right to terminate my employment at any time. The Arc retains the same right to terminate my employment at any time, with or without notice, for any legal reason or no reason, regardless of any other documents, oral or written statements issued by The Arc or its representative. ___________________________________________ __________________

Signature Date ____________________________________________

Printed name

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2017-18 Board Meeting Schedule

July 24, 2017

September 25, 2017

December 18, 2017 (3rd Monday)

January 22, 2018

March 26, 2018

May 28, 2018 – Annual Meeting (3rd Monday)

July 23, 2018

September 24, 2018

December 17, 2018 (3rd Monday)

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Documents

Board Meeting Agenda July 24, 2017 – 6:00 p.m. · Board Meeting Agenda . July 24, 2017 – 6:00 p.m. 5:30 pm Dinner . 6:00 pm Meeting . I. Call to Order & Determination of a Quorum