2011/2012 Annual Report For the Fiscal Year ending June 30, 2012

1922 The Alameda, Suite 400 San Jose, CA 95126

Life Services Alternatives (LSA) is a 501(c)(3) nonprofit founded in 2002 to provide residential care for adults leaving the Agnews Developmental Center – a California State institution which was closing. Our founders dreamed of establishing homes within the local community where their loved ones would enjoy a good quality of life. Their vision was to provide nurturing home en-vironments for those individuals who require around the clock medical care. That dream became Life Services Alternatives and today we serve a broader population than the original adults leaving Agnews.

We are dedicated to our Mission – Providing exceptional community-based living experiences and services for people with special needs and to living our core values of Dignity: We respect and trust our employees, residents and fami-lies and are a kind and caring community, Involvement: We encourage fam-ily and community involvement and take a collaborative, partnering approach and Quality: We invest in training and development and embrace a quality im-provement process every day.

This past year was one of continued organizational and personal growth for our residents and our staff. We continued to invest in our programs, staff and infrastructure. We are very proud of our accomplishments. Here are some of the highlights:

• Progress in the content of our programs and the quality of our care: Our resi-dents thrive in the community and go out frequently. Destinations this past year included Disneyland and Yosemite. Local destinations such as Monterey, Cache Creek and San Francisco continue to be a favorite. Participation in groups such as the YMCA, the Santa Clara Senior Center and a bowling league have further integrated our residents with their community.

• LSA generated a surplus of $266.4K on revenues of $8,313.5K. Our surplus was the result of our continued investment our infrastructure and a team effort to better manage overtime and non-labor expenses such as food and supplies.

• Our new web based Human Resource Information System (HRIS) helped us manage our most important asset, our people. We’ve begun rolling out a secured, web based electronic resident documentation and communication sys-tem. This new system enables us to better track Individual Support Plan (ISP) data collection, behavioral episodes and medical history. The system allows us to produce graphs and charts to track resident’s progress and trends. System alerts are put into place to mitigate risk of medication administration error.

• We laid the foundation for our Cypress home which we plan to open in Janu-ary of 2013.

Executive SummaryTable of Contents

Executive Summary p1

Our Homes p2

Our Programs p3

Focus on Quality p4

Our Residents p5

Our Employees p6

Relationships and Traditions p7

Administrative Systems and Infrastructure p8

LSA Financial Health p8

Plans for 2011-2012 p9

Summary p9

Page 01

LSA currently has eight residential care homes. Three of the homes are located within the John Burns Garden senior com-plex in Santa Clara, and five homes are located in residential neighborhoods in San Jose and Campbell. Two of the homes are licensed as Adult Residential Facilities, one as a Residential Care Facility for the Elderly and five as Adult Residential Facilities for Persons with Special Health Care Needs, commonly referred to as 962 homes.

All eight homes are funded through the San Andreas Regional Center (SARC) and licensed by Community Care Licensing (CCL) to serve residents with varying degrees of developmental disabilities. We provide private rooms to 5 individuals in each home.

Our Homes

Empey Residence

Mckendrie Residence

Rivermark Residence

Baywood Residence

Page 02

Life Services Alternatives provides exceptional resi-dential living experiences and services for people with special needs. LSA also offers in-home day programs in cases where the health and support needs of residents prohibit them from attending a traditional site-based day program. LSA’s programs focus on providing the servic-es and supports the residents needs to live successfully and to be more involved in the community. Recreational programs focus on participating in local events, to in-clude places such as cultural festivals, museums, live performances and, art shows. A three night trip to Dis-neyland was a great success and a triumph for one of the residents, who overcame her fear of being away from home overnight. Flying on an airplane was an adventure for all. This accomplishment reinforced that planning and preparation for each individual is vital. Many resi-dents enjoyed the equestrian artistry of Cavalia, while on tour in San Jose.

Individual Support Plans (ISPs) are developed using a team approach to meet specific needs and enhance the lives of each resident. The team solicits input from the resident, family members, dietician, recreation therapist, speech therapist, psychologist, occupational therapist, physical therapist and staff members who work with the individuals on a daily basis. In the 962 homes, an Indi-vidual Health Care Plan is developed by a Licensed staff member to address each individual’s health care needs. The Plan is reviewed every 6 months by the Team which includes the SARC Registered Nurse and the primary care physician.

LSA provides monthly training in CPR/First Aid, and sub-ject areas related to residential care. Our training is open to LSA employees as well as to other care providers.

Joey and Melody at the Bowling Alley. The 2012 annual LSA tea party.

Maggie at the annual Cat Fanciers’ Association Show.

Tess and Trent exploring colors.

Page 03

Our Programs

LSA is committed to maintaining a safe, healthy en-vironment where the men and women living in our homes can flourish. A critical part of this is our ongo-ing commitment to quality improvement. We utilize the input and feedback we receive from our families, staff and our partners to improve quality.

Our homes are all Quality Management Systems (QMS) certified and in full compliance with all ap-plicable regulations. We are pleased with the results of our annual CCL surveys, our SARC facility monitor-ing and our Department of Developmental Services (DDS) six-month reviews. We plan to continue to reach out to parents, staff and our partners in an on-going effort to be ever better.

Nelda and Yolanda.

Willjean hand over assisting Patsy.

Rivermark Employees.Trent enjoying a visit from his parents.

Page 04

Focus on Quality

One of the most rewarding things about the service we provide is seeing first hand, that what we do makes a difference in people’s lives.

• One of our residents was admitted with tracheostomy and required suctioning and humidification to keep his airways clear. During the past year, he expressed his desire to get rid of the tracheostomy. The process of weaning was started 10 months ago, and his tracheostomy is now capped (he is breathing through his nose) for the last 8 months. He is now ready for the next step of tracheostomy removal pending a swallowing evaluation.

• Amanda’s presence in the Baywood home has brought anti-bullying aware-ness to the LSA staff and the community. She participated in a special Aware-ness Day on 8/18/12 organized by the Amanda Network which brought out local Councilmen, San Jose Mayor Chuck Reed, speakers sharing their personal sto-ries and ABC News. Amanda has learned to communicate by blinking her eyes and also by squeezing a switch with her hand or pushing the switch with her foot.

• Mary was only 95 pounds when she moved into our Salerno home. Meals were very difficult for her and it often took 30 to 45 minutes to finish a meal. She was getting 3 cans of Ensure to supplement her diet. Presently, she is doing very well. She enjoys her meals, loves the food and is smiling and alert. She has gained over 20 pounds since admission and no longer needs the Ensure!

• Gerald would avoid parties and activities, often going to his room if there was a large crowd in the home, has decided it is time to join in the festivities. He will move right into the middle of the party and participate in the games and fun. He has come to realize that he can trust people and rely on the assistance of staff to meet his needs, and that he does not have to be afraid of strangers. He has also embraced the idea of actively interacting with others is group settings, whether at home or out in the community; furthermore, he has come to realize that parties, although often noisy, can be a lot of fun!

• Wilma, a treasure of a woman in our senior home passed away. We were able to love and support her through her hospice journey. As a team, we all grew in multiple ways from the experience. We are all comforted knowing that her last years were remarkable.

• Weight management and exercise programs have continued to improve. Two residents no longer require a liquid nutritional supplement, while others steadily have a desired weight loss.

• We were able to offer a life changing opportunity to a woman who lived in a skilled nursing facility for the last 7 years. Celia, has been with us since June and is settling in to her new living arrangement. We are working diligently to manage her diabetes and to help her make up for lost time by doing things she wasn’t able to do while in the skilled nursing facility.

• Maggie recently shared with her father that she was “on top of the world”. We know this is because Maggie is happiest when she talks with her mom and dad, is petting Mike, her cat, knitting or shopping at Walmart. Better yet, she learned how to make a pot of coffee whenever she wants.

Page 05

Mary going for a stroll in the park.

Heather ready for the Holidays.

Jenny at the Annual Women’s tea party.

Calvin celebrating his Birthday.

Our Residents

We have 155 dedicated employees who enjoy working here. We work hard to select, train and retain the best possible employees. Our residents benefit from the resulting quality and continuity of care. We have low employee turnover and when the need arises to recruit new staff, we have a ready source of candidates from employee referrals.

Our Performance Planning and Review process provides important feedback to employees on how they are perform-ing, establishes goals for employee growth and serves as a basis of rewarding performance.

As part of our annual benefit plan renewal in July we added an eighth holiday to the recognized LSA Holidays for 2013 providing additional time off for our employees. In addi-tion, we have added a one-time one week sabbatical leave for eligible employees after their 5th year of service.

Page 06

Timi, Sulan, Susan and Menchi.McKendrie home celebration.

Rivermark residents and employees.

Becky & Judy.

Baywood staff with new van.

Our Employees

We believe that maintaining and building strong relationships and traditions are important parts of community living. We continued our traditions and added a couple of new ones.

• In August we held our first Multi-Cultural Event. Residents and staff played games, listened to music and shared stories and foods from different countries.

• Thanksgiving: Residents and their families shared a traditional Thanksgiv-ing dinner together.

• Family meetings were held quarterly with guest speakers invited on topics of interest.

• Four (4) of our Rivermark residents, along with 4 staff and our recreation therapist spent 4 days at Disneyland. A fabulous time was had by all.

• Legislative Breakfast: LSA residents met their local legislators at the an-nual Legislative Breakfast hosted by SARC.

• We have monthly parties at each other’s homes. Staff, residents and family gather for celebrations, such as birthdays and holidays.

• Our 4th annual Women’s Tea was held in June in the Rivermark commu-nity center, with a record 86 attendees..

Josh and Meghan enjoying Halloween.

Celebrating Amy’s b-day with Melody.

Rivermark residents & Staff visiting Disneyland

Tomas and Deanna sharing a moment.

Page 07

Relationships and Traditions

With the goal of improving how our organization functions, we continue to invest in our administrative systems and infra-structure. Our new HRIS system is web based and provides a self-service capability that allows our employees to update their information and receive more information online. We continue to replace older computers and upgrade our internal network and communications infrastructure. This past year we connected all LSA homes to our new server via Virtual Private Network (VPN). The new server provides LSA offices and homes with a central shared location to better manage, control and secure all of our data.

We are in the process of transitioning to Therap services; a web based electronic resident documentation and communication system. Therap is fully electronic which eliminates paper based documentation and will allow us to better manage health records, medication, progress notes and incident reporting for our residents.

LSA had a successful financial year with a preliminary and un-audited surplus of $280.8K generated on $8,315.6K of rev-enue. The surplus was primarily the result of management’s rigorous attention toward controlling expenses which included improvements in staff scheduling and overtime management and the areas of food and household supplies. We renewed our working capital line of credit with Wells Fargo for $1 Million.

External audits for 2010-2011 were conducted by Lautze & Lautze who issued an unqualified opinion as to our financial state-ments. Due to strong internal controls in place, Lautze and Lautze did not issue a management letter for the 2010-2011 audit.

LSA continues to strengthen its internal controls to ensure that our financial statements are fairly stated in accordance to Generally Accepted Accounting Principles (GAAP) and LSA’s assets are properly protected. The results of these efforts were confirmed by the most recent audited conducted by our outside auditors.

Page 08

Administrative Systems and Infrastructure

LSA Financial Health

With ongoing concerns over funding from the State of Cali-fornia, LSA prepared a conservative budget for our 2012/2013 fiscal year. We will monitor our financial performance closely and are prepared to take action should the need arise.

We are very excited about the prospect of opening a new home on Cypress Avenue in January of 2013. We will lease the home from Bay Area Housing Corporation and have sub-mitted the program design to SARC and the licensing appli-cation to CCL. The home will be a five bed, residential care (Level 4C) home, serving young adults. We anticipate that many will be recent graduates of high school, most likely, cur-rently living with their families. It will include a community integration day program.

We are proud of what we’ve accomplished in this past year and look forward in the coming year to opening our ninth home, further growth in our organization and the people we serve. The LSA Board and staff remain dedicated to our mis-sion and living and practicing our values of dignity, involve-ment and quality in everything we do. We plan to continue to improve our programs, invest in our people, systems and infrastructure, and to build on the relationships and traditions we have started. We are committed to being a great provider of care and a great place to work.

Saba and Joey.

Tina and Adam visiting the Monterrey Bay Aquarium.

Molly visiting Twin Peaks. Steve and Shiro at Yosemite.

Gina, Patty and Jerome at Ardenwood Farm.

Plans for 2012-2013

Summary

Page 09

Locations

Headquarters

1922 The Alameda Suite 400

San Jose, CA 95126

(408) 727-3493

www.lsahomes.org

Rivermark Office

820 Agnew Road

Santa Clara, CA 95054

Rivermark Homes

810 Agnew Road

Santa Clara, CA 95054

830 Agnew Rd

Santa Clara, CA 95054

840 Agnew Rd

Santa Clara, CA 95054

962 Homes

895 McKendrie Avenue

San Jose, CA 95126

649 Empey Way

San Jose, CA 95128

1320 S. Baywood Avenue

San Jose, CA 95128

441 N. Milton Avenue

San Jose, CA 95008

1173 Salerno Drive

Campbell, CA 95008