Leisure World had assets worth more than $18.9 million at the end of 2011, according to the annual report for the Golden Rain Foundation of Seal Beach. The foundation reimbursed the Leisure World mutual benefit corporations for missing the deadline to pay Orange County property taxes.
The Sun recently acquired a copy of the annual report, which was issued in February.
The report was audited by NSBN, LLP, certified public accountants and business consultants. The CPA firm’s auditing report concluded that the financial statements represented the financial position of the Golden Rain Foundation as of Dec. 31, 2010 and 2011.
According to the report, the Foundation’s income for the year was $12,981,085.
“Total operating income exceeded total operating costs by $718,381 in 2011 and $790,578 in 2010,” the GRF Annual Report said. “Excess income from Trust Operations was $694,511 while excess income from the Golden Rain Foundation operations was $23,870.”
The Foundation is a non-profit organization. According to the annual report, its sole purpose is to provide management services to the 16 mutual benefit corporations that collectively make up Leisure World. As a non-profit, it can’t keep “excess revenue” that would be called profit at private enterprise. (The charity industry is sometimes called the “third sector” to distinguish it from the private and government sectors.)
“The Board of Directors decided to fund the Mutuals’ Self Insurance Fund for $33,436 to bring the fund level to $350,000, refund $396,032 directly to the Mutual Corporations and contribute $288,913 to the Budget Contingency fund,” the report said.
The contingency fund is for unexpected events or budget shortfalls, the report said.
One such unexpected event came in the spring of 2011, when the Golden Rain Foundation was late in paying the second installment of property taxes for 14 of Leisure World’s 16 mutuals. The Orange County Treasurer/Tax Collector’s office imposed a penalty of $272,948.32 on the mutuals. Golden Rain requested a waiver of the penalty on the grounds the payments had always been made on time in the past. The request was denied.
According to the balance sheet for 2011, current liabilities for the year included $281,445 paid to the mutuals for penalties for late property taxes. The report did not provide a breakdown of the penalty reimbursement.
There was no penalty payment for late property taxes in 2010.
While part of the foundation’s income is derived from monthly fees paid by shareholders in the 16 mutuals, Golden Rain also makes money through various operations. For example, Golden Rain rents the Health Care Center to Tenet at $45,000 a month. The lease expires on Nov. 30, 2013.
Golden Rain paid $181,555 in contributions to the employees’ 401(k) retirement plan.
