031522 PR Neighborhood Centers Lease Agreements Friendly RFB — City Council - Successor Agency

RFB #4361 Neighborhood and Recreation Facilities Lease Partners Friendly Center, Inc.

Executive Summary
Friendly Center, Inc. is a 501(c)(3) non-profit organization providing over 15 free basic needs and social services programs to low-income Orange County residents through its Community Resource Centers. Friendly Center utilizes a Community Resource Center model of program- delivery to offer clients a comprehensive one-stop-shop that allows them to efficiently receive assistance in multiple areas of need. Friendly Center’s submission to this Request for Bid proposes an in-kind lease agreement between the City of Fullerton and Friendly Center for the Maple Neighborhood Center.

If selected as the lease partner for this site, Friendly Center would utilize the facility as a Community Resource Center, offering over $300,000 of in-kind value to the city each year in the form of various basic needs and social services programs for low-income residents of Fullerton.

These programs include emergency assistance, case management, food distributions, information & referral services, utility assistance, family engagement events, holiday events, an after-school enrichment program, and other programs offered on-site through community partners. In exchange for offering these in-kind programs and services at the Maple Neighborhood Center, Friendly Center proposes a $1 annual lease and responsibility for limited interior maintenance of the site (including janitorial services). Friendly Center also proposes the lease term to be three-to-five years initially with automatic extensions thereafter.

As outlined in the proposal, two full-time staff would be hired for the proposed Community Resource Center with existing Friendly Center staff regularly on-site to assist in the delivery of programs and services. Approximately three months following the signing of the lease would constitute a start-up period wherein Friendly Center hires staff, preforms community outreach, and transitions the site to a Community Resource Center equipped to deliver the programs and services outlined in this proposal. Friendly Center’s long-term vision for the Community Resource Center is to expand its service capacity further by having a total of 4 full-time and 2 part-time staff members working on-site as it grows and funding for these positions is secured.

Friendly Center has the direct-service expertise, facility management experience, and administrative capacity to sustain and grow the facility. Specifically, its administrative capacity includes Friendly Center’s President/CEO, Director of Programs, Director of Development, Assistant Director of Programs, Grant Writer, HR Coordinator, and Bookkeeper. Friendly Center has managed multiple municipal facilities utilizing the Community Resource Center model, the most longstanding of these partnerships being with the City of Orange (1985 to present). The conclusion of a municipal facility partnership in 2020 allows Friendly Center the resources to utilize its established financial and administrative capacity to manage a Community Resource Center at the Maple Neighborhood Center facility.

RFB #4361 Neighborhood and Recreation Facilities Lease Partners Friendly Center, Inc.

This proposal has the full support of Friendly Center’s Board of Directors, which has the launch of a Friendly Center Community Resource Center in North Orange County as a priority on its strategic plan. The board believes the Maple Neighborhood Center is highly conducive to a Friendly Center Community Resource Center and is confident in Friendly Center’s capacity and experience to successfully implement this proposal.

If selected to manage the Maple Neighborhood Center facility, Friendly Center would be proactive in its outreach efforts to inform the community of its programs and services. This would involve Friendly Center leadership and staff immediately building relationships with local schools, organizations, and groups such as Fullerton Collaborative, the Cal State Fullerton Center for Healthy Neighborhoods, and Fullerton GRIP.

As stated in the Operational/Management Plan, program data from 2020 indicates that 10% of those who received Emergency Assistance at Friendly Center’s Community Resource Center in Orange were Fullerton residents. By partnering to provide low-income residents access to both free basic needs assistance and social services, Friendly Center and the City of Fullerton would be extending imperative programs and services to Fullerton families and seniors living in poverty; a population whose needs have only grown since 2020 as a result of the COVID-19 pandemic’s impact on employment, income, and well-being.

Friendly Center is a qualified facility management partner with thorough experience and demonstrated ability to deliver high-impact programs and services to low-income residents.

Friendly Center’s leadership and Board of Directors appreciates the City of Fullerton’s consideration of this proposal and the opportunity to be a facility lease partner for the Maple Neighborhood Center.

RFB #4361 Neighborhood and Recreation Facilities Lease Partners Friendly Center, Inc.

Lease Terms
Friendly Center proposes the following lease terms for Maple Neighborhood Center:
• In exchange for services provided to Fullerton re sidents valued at $300,000 annually, Friendly Center shall pay $1 annually. See Executive Summary and Operational/ Management Plan for details about the propose programs and services. • Friendly Center shall regularly manage the interior of the facility and be responsible for limited interior maintenance (including janitorial services). • Friendly Center does not anticipate capital tenant improvement needs but is prepared to pay for any tenant improvement s necessary to create an office space conducive to the delivery of the proposed human services a nd basic needs programs. • Fullerton to pay utility costs and building structural maintenance costs. • The lease term to be initially three-to-fi ve years, with automatic extensions unless terminated by either Party.
• Fullerton to permit Friendly Center to use existing furniture in the facility. • Fullerton to permit Friendly Center the use of Lemon Park for regularly scheduled food distributions, family engagement events, and holiday distributions. • Fullerton to permit Friendly Center to install signage on and/or in proximity to the Maple Neighborhood Center.

Frien
dly Center verifies that the proposed terms are its best offer.

Operational/Management Plan
Friendly Center, Inc.

Operational/Management Plan

1. Recreation Facility Management – Provide a detail work history and a list of all similar facilities that the Respondent currently manages or has managed within the past five (5) years. a) Name and Location: Killefer Park Community Buildings, 147 W Rose Ave. Orange, CA 92867 and 615A Lemon Street Orange, CA 92867
b) Nature/Description of Facility: C
ity-owned community buildings with office space, restrooms, food pantry, kitchen, and multipurpose areas.
c) Facility Annual Operating Budget: $41,196 in 2019 (rent is provided in-kind) d) Dates Ser ved: 1985 to present.

Scope of services provided: Bas ic Needs Programs, Social Services, and an After-School Program. e) Annual Revenue Report: Pro grams and services offered by Friendly Center in these buildings are free of charge to the community and therefore not revenue generating. For Friendly Center’s overall agency revenue (acquired through fundraising, grants, contributions, etc.) please see audited financial statements included with this proposal. f) Owners Name and Contact Information: B onnie Hagan, Assistant City Manager. Contact Information: [email protected], (714) 744-7264
g) Manner in Which Your Organization was Selected for Management: Se eing its importance as a longstanding resource to the community, the City of Orange approached Friendly Center in 1985 offering two community buildings in Killefer Park to be used for programs free of charge. Friendly Center and the City of Orange have continuously renewed this agreement in the intervening years. a) Name and Location: Orange Villa Bible Church, 1820 E Meats Ave. Orange, CA 92865 b) Nature/Description of Facility: Within the chu rch building: office space, restrooms, and a food pantry. Access to a multi-purpose room in nearby affordable housing complex. c) Facility Annual Operating Budget: $23, 541 in 2019 (rent was provided in-kind) d) Dates Served: 2007-2020.

Sc
ope of services provided: Basic Needs Programs and Social Services, and an After-School Program
e) Annual Revenue Report: Pro
grams and services offered by Friendly Center in this building were free of charge to the community and therefore not revenue generating. For Friendly Center’s overall agency revenue (acquired through fundraising, grants, contributions, etc.) please see audited financial statements included with this proposal. f) Owners Name and Contact Information: Pas
tor Rob Curington, (714) 637-3250.
g) Manner in Which Your Organization was Selected for Management: Villa Park Bible Church lead
ership approached Friendly Center in 2007 offering a portion of the church premises to be used to deliver programs to the surrounding, low-income community.

Operational/Management Plan
Friendly Center, Inc.
a) Name and Location: Whitten Community Center, 900 S Melrose St. Placentia, CA 92870 b) Nature/Description of Facility: C ity-owned community building with office space, restrooms, food pantry, kitchen, and multipurpose areas.
c) Facility Annual Operating Budget: $4 1,196 in 2019 (rent was provided in-kind) d) Dates Served: 20 09-2020.

2. Provide a detailed description of your vision and strategy to implement your proposed management plan.

Friendly Center’s vision is to manage the Maple Neighborhood Center and utilize it as a robust Community Resource Center, where low-income Fullerton residents can access a variety of free programs and services that meet both their basic needs and offer opportunity to build a more secure future.

Friendly Center has the experience, expertise, and capacity to make this vision possible.

The direct-service framework to operate this additional facility is already in place; allowing Friendly Center to promptly coordinate and deliver high-impact programs and adapt services to respond to community needs. Furthermore, Friendly Center’s administrative capacity is already in place to allow for the effective management of the facility and the ability to sustain its programs and services. This administrative capacity includes Friendly Center’s President/CEO, Director of Programs, Director of Development, Assistant Director of Programs, Grant Writer, HR Coordinator, and Bookkeeper. The President/CEO also works closely with the Friendly Center Board of Directors to shape and carry out its annual comprehensive strategic plan.

Friendly Center has experience serving low-income families and the residents of North Orange County. Specifically, many clients who currently receive services at Friendly Center’s Community Resource Center in Orange live in the city of Fullerton. Program data indicates that between April 2020 and December 2020, 10% of clients who received Emergency Assistance at Friendly Center in Orange were Fullerton residents.

Operational/Management Plan
Friendly Center, Inc.

According to the County of Orange Social Services Agency, the City of Fullerton (and North Orange County more broadly) is considered a ‘service desert’ when it comes to low-income residents’ access to a Community Resource Center offering both free basic needs assistance and social services. By creating such a valuable resource for the community at the Maple Neighborhood Center, Friendly Center and the City of Fullerton would be bridging an urgent gap in services for struggling families and seniors.

Regarding strategy, the first three months of the lease would constitute a start-up period, where Friendly Center would prepare the space to provide the proposed programs and hire the facility’s two full-time staff, an Information and Referral Specialist and a Case Manager (see #4 for details on these staff positions/duties). Once these positions are in place, the following programs facilitated by these staff members can become available to the community: Emergency Assistance, Utility Assistance, Food Distributions, Case Management, and Information & Referral Services.

Existing Friendly Center staff would regularly be present onsite to help transition the facility to a fully operational Community Resource Center and assist in the delivery of programs.

As safety guidelines allow, an open house event would be offered during this time to introduce the community to the programs and services available at Friendly Center. Other community outreach efforts would be made through mailers, the Fullerton Connect publication, reaching out to local schools and churches, participating in the Fullerton Collaborative, and Fullerton GRIP.

During this start-up period, Friendly Center will also work with program partners to propose and coordinate services to be offered onsite, such as legal advocacy, parenting classes, nutrition classes, ESL classes, financial literacy, and domestic violence support groups.

Beginning in 2022, as the client base grows at the site, Friendly Center would start to hold holiday program events at the Maple Neighborhood Center, which include an annual Easter Basket distribution, Thanksgiving dinner kit distribution, and holiday toy distribution. Friendly Center would also begin offering regularly scheduled Family Engagement events, where clients and their families can participate in meaningful activities that encourage bonding and positive family experiences. Past Family Engagement events include a bingo night, a gingerbread house decorating competition, and a Halloween game night. Such events include dinner and are held at a time convenient for families (typically weekends or weekday evenings). Additionally, depending on community need and funding availability, Friendly Center would plan to launch its after-school enrichment program, The Power of Me, at the facility in 2022.

As the proposed Community Resource Center grows and grant funding is secured, Friendly Center plans to add more staff to the site, including a full-time Site Coordinator, an additional full-time Case Manager, a part-time Food Program Assistant, and a part-time Education Program Lead.

Operational/Management Plan
Friendly Center, Inc.

3. For each facility you are proposing to provide services at please include staffing levels; proposed hours of operation; financial plan to pay for ongoing operations and maintenance costs.

Facility: Maple Neighborhood Center
Staffing Levels: 2 full-time staff with part-time support as needed from other current Friendly Center staff. Volunteers would also be utilized depending on program need (i.e., food distributions, holiday events). Friendly Center has a history of managing volunteers on a wide scale to support its programs, with peaking at 700 volunteers annually prior to 2020.

Hours of Operation: Regular Business Hours: Monday-Friday, 9:00am-5:30pm with adjustments made for evening and Saturday hours depending on community needs and feedback.

Financial Plan to Pay for Ongoing Operations and Maintenance Costs: Friendly Center’s leadership is confident in the fiscal sustainability of the proposed Maple Neighborhood Center facility management plan. Friendly Center will utilize unrestricted funds to pay for ongoing operation of the facility. As stated in the Lease Terms, Friendly Center will be responsible for the interior of the building consistent with Friendly Center’s normal operations. Friendly Center’s annual fundraising activities and grant seeking would help cover costs associated with staffing and programs. As indicated by the audited financial statements included with this application, Friendly Center has the demonstrated ability to secure ongoing and diverse funding sources.

4. Describe your proposed programs, activities and services in detail and explain how they will help address community need.

All the proposed programs, activities, and services outlined in this proposal are completely free of charge and designed to meet the needs of low-income residents.

Client registration information is captured prior to receiving assistance or participating in programs and entered into a database. Friendly Center uses this database to assess community needs, measure demographic information, and track participation. Program surveys would regularly be offered to clients, allowing Friendly Center to evaluate program effectiveness. More programs and services may be added to this list in response to community needs or as Friendly Center builds partnerships with other local organizations.

Proposed Friendly Center Programs/Services to Begin During the Start-Up Period Information and Referral Services: A comprehensive service provided by the Information and Referral Specialist (I&R), who is the first point of contact for those seeking assistance at Friendly Center – whether that be in-person, over the phone, or via email. The I&R assesses the client’s needs and provides information regarding relevant programs and referrals – both in-house and in the community. To best serve clients, the I&R Specialist is bilingual in English and Spanish. If a Operational/Management Plan
Friendly Center, Inc.

Friendly Center program or local partner does not offer the assistance a client needs, the I&R Specialist shares a relevant resource from a continuously updated catalogue of local programs, services, and resources. Information and Referral Services helps increase access to emergency services and community resources by providing those in need of assistance with specialized support and referrals.

Case Management: Clients who come to Friendly Center experiencing multiple areas of need (i.e., family crisis, job loss, domestic violence, food insecurity) are referred to the Case Management program. A Friendly Center Case Manager then meets with the client/family – assessing their needs, preforming a thorough intake evaluation, and developing a detailed case plan. Cases typically last 3-6 months and involve the client/family participating in multiple recommended interventions while regularly meeting with their Case Manager. During these meetings follow up assessments are given to measure the progress and effectiveness of the case plan. This Case Management model has proven effective, as 95% of the those that complete the program remain stable and self-sufficient one year after completing their case plan. One full-time Case Manager would be located at the proposed facility with other Friendly Center Case Managers being present on a regular schedule for added support in serving more clients.

Counseling: Graduate students from partnering universities earning counseling practicum hours provide mental health counseling onsite for clients in Case Management; the graduate students providing this service are supervised by a Friendly Center counseling supervisor, who is a licensed Marriage & Family Therapist and Licensed Professional Clinical Counselor (LPCC).

Emergency Assistance: A service that provides non-perishable food items, hygiene products, and diapers to those in urgent need of such assistance. A fully stocked onsite food/supply pantry makes Emergency Assistance possible; with items distributed through the program either purchased through Friendly Center or donated by community partners and supporters.

Document and Translation Assistance: Friendly Center staff assist clients with translating documents from English to Spanish by a ppointment.

Utility Assistance: Friendly Center partners with SoCal Edison and SoCal Gas to provide qualifying clients with up to $500 in utility assistance.

Food Distributions: Regularly scheduled large-scale food distribution events. Food is delivered to Friendly Center either pre-boxed or on pallets; staff and volunteers then distribute the food to clients.

Operational/Management Plan
Friendly Center, Inc.

Senior Food Distributions: Regularly scheduled food distributions specifically promoted to seniors.

Proposed Friendly Center Programs/Services to Begin in 2022 Family Engagement Events: Family Engagement Events involve participants taking part in meaningful family activities that encourage teamwork and trust-building. Family Engagement Events will be planned to occur at the facility throughout the year on either weekday evenings or weekends to ensure the whole family can participate.

Holiday Events: Annual distributions of food, hygiene items, and gifts during the weeks of Easter, Thanksgiving, and Christmas. These programs promote community and help clients provide for their children and families during the holidays.

The Power of Me: An after-school enrichment program for elementary school students from low- income households. The Power of Me includes homework help from tutors and S.T.E.A.M. (Science, Technology, Engineering, Arts, Math) group activities.

Potential Programs/Services to be Available On-Site Through Program Partners:

Legal Advocacy: Monthly access to a legal professional on-site who can assist clients with legal needs, questions, and referrals.

English as a Second Language Classes: Free ESL classes for low-income adults, childcare provided.

Parenting Classes: Multiweek program designed to improve parenting skills and family functioning by teaching parents/caregivers about child development, behavior management, and coping skills.

Financial Literacy: Workshops teaching basics of financial literacy, banking, saving, etc.

Domestic Violence Support Group: A multiweek confidential support group for victims of domestic violence.

Nutrition Classes: Nutrition education for under-served and vulnerable populations who typically experience the greatest health disparities.

Proposed
Organization Chart
Director of
Development
Orange
Community
Resource Center
Coordinator
Board of Directors
Education
Program
Lead
Orange
Case
Manager
Assistant
Director of Programs
Fullerton
Case
Manager
President/CEO
Cathy Seelig
Orange
Information &
Referral
Specialist
Stanton
Case
Manager
Volunteer
and
Emergency
Assistance
Specialist
Education
Program
Manager
HR
Coordinator
Fullerton
Information &
Referral
Specialist
Food
Program
Assistant
Grant
Writer
Director of
Programs
Orange
Case
Manager
Bookkeeper
Include a statement of why your firm or staff should be selected:

Friendly Center has the administrative capacity, financial resources, and program delivery experience needed to manage the Maple Neighborhood Center and utilize it as a comprehensive Community Resource Center. The facility’s layout and location are well suited for the various high-impact programs a Friendly Center Community Resource Center would provide. Furthermore, Friendly Center has experience delivering the proposed programs and services to the Fullerton/North Orange County community through its other Community Resource Centers. By selecting Friendly Center for the Maple Neighborhood Center, the City of Fullerton is partnering with an agency that has 97 years of experience delivering significant in-kind value to the communities in which it serves.

RFB #4361 Neighborhood and Recreation Facilities Lease Partners Friendly Center, Inc.

Financial Capacity
The
following documents are Friendly Center, Inc’s audited financial statements for th
e most recent three fiscal years: 2019, 2018, and 2017.

FRIENDLY CENTER, INC.

FINANCIAL STATEMENTS
DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE
INFORMATION FOR 2018)

TABLE OF CONTENTS

INDEPENDENT AUDITORS' REPORT

FINANCIAL STATEMENTS
Statement of Financial Position
Statement of Activities and Changes in Net Assets
Statement of Functional Expenses
Statement of Cash Flows
Notes to Financial Statements
1 - 2
3 4
5 6
7 - 15
Guzman & Gray
Certified Public Accountants
4510 East Pacific Coast Highway, Suite 270
Long Beach, California 90804
(562) 498-0997 Fax: (562) 597-7359

INDEPENDENT AUDITORS' REPORT
To the Board of Board of Directors of
Friendly Center, Inc.

Report on the Financial Statements
Patrick S. Guzman, C.P.A.

Mark Gray, C.P.A.

We have audited the accompanying financial statements of Friendly Center, Inc. (the "Center") (a nonprofit organization}, which comprise the statement of financial position as of December 31, 2019, and the related statements of activities and change in net assets, 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.

Auditors' 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.

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. 1 INDEPENDENT AUDITORS' REPORT (Continued)
Auditors' Responsibility (Continued)
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 Organization as of December 31, 2019, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Summarized Comparative Information
We have previously audited the Friendly Center's 2018 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated March 1, 2019. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2018, is consistent, in all material respects, with the audited financial statements from which it has been derived.

Guzman & Gray CPAs
Long Beach, CA
March 20, 2020
2 FRIENDLY CENTER, INC.

STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2018)
ASSETS
Without With
Donor Donor
Restriction Restriction 2019 2018
Current Assets
Cash and cash equivalents $ 868,808 $ 55,240 $ 924,048 $ 931,405 Certificates of deposit 208,731 3,747 212,478 137,169
Receivables 122,194 122,194 128,840
1,199,733 58,987 1,258,720 1,197,414
Property and Equipment, Net
of Accumulated Depreciation
Property and equipment
Land 40,617 40,617 40,617
Building and building
improvements 190,631 190,631 241,402
Leasehold improvements 27,723 27,723 27,723
Furniture and equipment 59,190 59,190 92,567
Computers and software 17,555 17,555 7,205
Transportation 35,859 35,859 13,463
371,575 371,575 422,977
Less accumulated depreciation {288,839} {288,839} {367,551} 82,736 82,736 55,426
Other Assets
Deposits 6,562 6,562 5,526
TOTAL ASSETS $ 1,289,031 $ 58,987 $ 1,348,018 $ 1,258,366

LIABILITIES AND NET ASSETS
Without With
Donor Donor
Restriction Restriction 2019 2018
Current Liabilities
Accounts payable $ 40,842 $ 40,842 $ 42,645
Tenant deposits 2,196 2,196 2,193
Deferred revenue 18,368 18,368 21,401
Accrued payroll and related 43,370 43,370 33,997
TOTAL LIABILITIES 104,776 104,776 100,236
Net Assets
Without donor restriction 1,184,255 1,184,255 1,078,415 With donor restriction $ 58,987 58,987 79,715
TOTAL NET ASSETS 1,184,255 58,987 1,243,242 1,158,130

TOTAL LIABILITIES AND
NET ASSETS $ 1,289,031 $ 58,987 $ 1,348,018 $ 1,258,366 See Independent Auditors' Report and Accompanying Notes to Financial Statements 3 FRIENDLY CENTER, INC.

STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2018)
Without With
Donor Donor
Restriction Restriction 2019 2018

SUPPORT AND REVENUE
Support
Grants $ 590,384 $ 45,000 $ 635,384 $ 675,566
Contributions, individuals 119,846 119,846 86,740
Contributions, churches and
other organizations 149,100 149,100 99,059
Donated support 2,463,449 2,463,449 2,898,444
Release of restrictions 65,728 {65,728}
Total Support 3,388,507 {20,728} 3,367,779 3,759,809
Revenue
Rent income 101,788 $ 101,788 99,115
Interest income 4,928 4,928 4,743
Miscellaneous income/(loss) 6,151 6,151 4,254
Fundraising, net 157,020 157,020 119,848
Total Revenue 269,887 269,887 227,596
TOTAL SUPPORT AND REVENUE 3,658,394 {20,728} 3,637,666 3,987,405

EXPENSES
Program services 3,310,084 3,310,084 3,733,427
Support services 242,470 242,470 253,451
TOTAL EXPENSES 3,552,554 3,552,554 3,986,878
CHANGE IN NET ASSETS 105,840 (20,728) 85,112 524
NET ASSETS, BEGINNING OF YEAR 1,078,415 79,715 1,158,130 1,157,606 NET ASSETS, END OF YEAR $ 1,184,255 $ 58,987 $ 1,243,242 $ 1,158,130 See Independent Auditors' Report and Accompanying Notes to Financial Statements 4 Accounting and auditing
Bank charges
Contract
Depreciation
Fundraising
In-kind facilities
In-kind food & other
Insurance
Professional fees
Repairs and maintenance
Miscellaneous
Office supplies
Membership dues
Salaries and wages
Employee benefits
Payroll taxes
Postage
Printing
Equipment
Program
Taxes
Special events
Transportation
Utilities
Subtotal
Less: Direct donor benefit
Total Expenses
FRIENDLY CENTER, INC.

STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2018)
Program Sueeorting
Management
General and Fund
Programs Housing Total General Raising Total
$ 5,800 $ 6,350 $ 12,150
$ 4,133 $ 4,133
8,270 8,270
5,600 3,489 9,089
$ 41,699 41,699
360,000 360,000
2,081,053 2,081,053
17,036 4,069 21,105
2,247 151 2,398 301 284 585
279 44 323 2,461 2,461
2,820 2,820 4,391 5,885 10,276
1,525 630 2,155 3,308 3,308
1,315 1,315
603,736 10,346 614,082 86,862 63,412 150,274
16,648 1,278 17,926 2,930 3,748 6,678
50,198 1,020 51,218 7,222 5,272 12,494
1,047 460 1,507
7,727 7,727 3,909 3,831 7,740
13,090 5,077 18,167
68,204 6,000 74,204
1,936 1,936
42,922 42,922
5,687 5,687
12,205 7,569 19,774
$ 3,251,035 $ 59,049 $ 3,310,084 $ 117,879 $ 167,513 $ 285,392 {42,922} {42,922}
3,251,035 59,049 3,310,084 117,879 124,591 242,470
See Independent Auditors' Report and Accompanying Notes to Financial Statements. 5 2019 2018
$ 12,150 $ 11,950
4,133 626
8,270 4,187
9,089 7,608
41,699 30,151
360,000 324,000
2,081,053 2,574,444
21,105 21,110
2,983 7,245
2,784 5,459
13,096 5,139
5,463 7,008
1,315 1,278
764,356 766,186
24,604 33,270
63,712 65,870
1,507 1,431
15,467 16,036
18,167 6,129
74,204 73,904
1,936 1,911
42,922 26,574
5,687 3,999
19,774 17,937
$ 3,595,476 $ 4,013,452
{42,922} {26,574}
3,552,554 _ 3,98_6,878
- - ------------------ --
FRIENDLY CENTER, INC.

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2018)
2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES
Change in net assets $ 85,112 $ 524
Adjustments to reconcile net income to net
cash provided by operating activities:

Depreciation 9,089 7,608
(Increase) decrease in:

Receivables 6,646 34,511
Deposits (1,036) (176)
Increase (decrease) in:

Accounts payable (1,803) 877
Accrued payroll and related 9,373 (6,884)
Tenant deposits 3 3
Deferred revenue (3,033) (11,706)
NET CASH FROM OPERATING ACTIVITIES 104,351 32,657

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (11,603) (10,063)
Donated assets received (22,396)
Reinvested dividends (77,709) (101,024)
NET CASH FROM INVESTING ACTIVITIES (111,708) (111,087)
NET INCREASE IN CASH (7,357) (78,430)
CASH AT BEGINNING OF YEAR 931,405 1,009,835
CASH AT END OF YEAR $ 924,048 $ 931,405

SUPPLEMENTAL DISCLOSURES

INTEREST PAID NONE NONE

INCOME TAXES PAID NONE NONE

NON-CASH TRANSACTIONS
Non-monetary contributions $ 2,463,449 $ 2,898,444
Non-monetary contribution of donated stock NONE NONE
See Independent Auditors' Report and Accompanying Notes to Financial Statements. 6 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2018)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES
Organization
Friendly Center, Inc., (the "Center") a not for profit multi-culture community center, was organized on February 16, 1967. Friendly Center's primary purpose is to provide information, referrals, emergency services, youth development programs, parenting classes, activity program, and 8 low-income housing units. These services are provided to the public who are economically or educationally disadvantaged.

Basis of Accounting
The Center uses the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

Use of Estimates and Assumptions
In preparing financial statements in conformity with generally accepted accounting principles (GAAP), management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period.

Financial Statement Presentation
The accompanying financial statements of the Center are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Net assets and revenue, gains, and losses are classified based on donor-imposed restrictions. Accordingly, net assets are classified and reported as:

Without Donor Restrictions - Those resources not subject to donor-imposed restrictions. The board of directors has discretionary control over these resources.

Designated amounts represent those net assets that the board has set aside for a particular purpose
With Donor Restrictions - Those resources subject to donor-imposed restrictions that will be satisfied by action of the Center or by the passage of time The Center has elected to present contributions with donor restrictions that are fulfilled in the same period within the net assets without donor restrictions class. 7 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2018)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cash and Cash Equivalents
The Center considers cash on hand, demand deposits and highly-liquid investments with original maturities of three months or less.

Pledge and Accounts Receivable
Pledges are recognized when legally enforceable and all conditions to the pledge have been met. Revenues earned but not received are recorded as a receivable.

No allowance for uncollectible pledges has been established as management believes the total amount to be fully collectible within the next year.

Grants
Revenues from grants are recorded when earned, in accordance with the terms of the grant. Grant funds earned, but not received, are accrued.

Property and Equipment
All property and equipment are recorded at cost if purchased, and at fair value, if donated.

Depreciation is calculated on a straight-line basis. Additions and improvements that increase the capacity or lengthen the useful lives of the assets are capitalized. Repairs and maintenance are expensed as incurred.

Donated Service and Support
Donated services are reflected as donations at their estimated fair value at the time the services are performed. Only those donated services that will otherwise be performed by salaried personnel, if donated services are not available for the organization to accomplish its purpose, are included in the financial statements. Donated support consists of food, clothing, toys, etc. These items are reflected at their estimated fair value at the time of receipt. Additionally, the Center has facility lease contracts with the cities of Orange and Placentia to occupy for a nominal rent of $1 a year. The Center records the use of the facilities as a donation, and reflects the donation at its estimated fair value.

Functional Allocation of Expenses
The costs of program and supporting services activities have been summarized on a functional basis in the statements of activities. The statements of functional expenses present the natural classification detail of expenses by function. Accordingly, certain costs have been allocated among the programs and supporting services benefited. 8 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2018)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fair Value of Financial Instruments
Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date.

Tax Status
The Center has qualified for tax-exempt status under Internal Revenue Code Section 501 (c)(3) and California Revenue and Taxation Code Section 23701 (d). The organization is involved in no activities that are subject to unrelated business tax. As a result, no provision for income taxes has been made. The Center recognizes the financial statement benefit of tax positions, such as filing status of tax-exempt, only after determining that the relevant tax authority would more likely than not sustain the position following an audit.

The Center is subject to potential income tax audits on open tax years by any taxing jurisdiction in which it operates. The statute of limitations for Federal and California state purposes is generally three and four years, respectively.

Reporting of Subsequent Events
In preparing these financial statements, the Center has evaluated events and transactions for potential recognition or disclosure through March 20, 2020, the date the financial statements were available to issue.

Due to the Global Outbreak of the coronavirus, and the subsequent measures taken by local, state, and federal government, the Organization is unable to accurately predict how the coronavirus will affect the results of its operation because the disease's severity and the duration of the outbreak are uncertain at this time.

Recently Issued Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02).

The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Center is currently evaluating the impact of the adoption of the new standard on the financial statements.
9 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2018)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summarized Comparative Totals
The financial statements include certain prior year summarized comparative information that does not include sufficient detail to constitute a presentation in conformity with GAAP.

Accordingly, such information should be read in conjunction with the Center's financial statements for the year ended December 31, 2018, from which the summarized information was derived.

Reclassifications
Certain reclassifications of amounts previously reported have been made to the accompanying consolidated financial statements to maintain consistency between periods presented. The reclassifications had no impact on previously reported net assets.

NOTE 2 - NET ASSETS WITH DONOR RESTRICTIONS
Net Assets with donor restrictions are restricted as follows:

Subject to expenditure for programs
Subject to endowment spending policy
Total Net Assets with donor restrictions
2019
$58,987
$58,987
2018
$75,715
4,000
$79,715
Net Assets were released from donor restrictions by incurring expenses satisfying the restricted purpose or by occurrence of the passage of time or other events specified by the donors as follows for the years ended December 31, 2019 and 2018:

Satisfaction of purpose restrictions $58,987 $64,386
NOTE 3 - ENDOWMENT
The Endowment consist of $4,000 established by a donor to provide annual funding for programs. The Board of Directors has interpreted the Uniform Prudent Management of institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the date of the donor-restricted endowment funds, unless there are explicit donor stipulations to the contrary. At December 31, 2019 and 2018, there were no such donor stipulations. As a result of this interpretation, we retain in perpetuity the original value of initial and subsequent gift amounts. The Endowment is invested in a certificate of deposit.
10 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2018)
NOTE 4 - PROPERTY AND EQUIPMENT, NET
Property and equipment, net, as of December 31, 2019 and 2018 is summarized as follows:
2019 2018
Land $ 40,617 $ 40,617
Building and Building
Improvements 190,631 241,402
Leasehold Improvements 27,723 27,723
Furniture and Equipment 59,109 92,567
Computers and software 17,555 7,205
Transportation 35,859 13,463
Total 371,575 422,977
Less Accumulated Depreciation ( 288,839) ( 367,551)
Net $ 82,736 $ 55,426
Depreciation expense for the years ended December 31, 2019 and 2018 was $9,089 and $7,608, respectively.

NOTE 5 - LIQUIDITY AND AVAILABILITY
The Organization maintains and manages adequate operating funds per policies set by the board of directors.

Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the balance sheet date, comprise the following:

Cash and cash equivalents
Accounts receivable
Certificates of deposit
Total
$ 868,808
122,194
208,731
$ 1,199,733
Our endowment funds consist of donor-restricted endowments. Income from donor restricted endowments is restricted for specific purposes, with the exception of the amounts available for general use. Donor-restricted endowment funds are not available for general expenditure.
11 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2018)
NOTE 6- DONATED MATERIALS AND SERVICES
Donated materials and services for the years ended December 31, 2019 and 2018 is summarized as follows:

Food, Gifts & other
Rent
Services
2019
$2,042,511
360,000
60,938
$2,463,449
NOTE 7 - CONTINGENCIES AND CONCENTRATIONS
Support
2018
$2,517,957
324,000
56,484
$2,898,444
The Center receives a substantial amount of its support from federal, state and local governments. A significant reduction in the level of this support may have an adverse effect on the Center's programs and activities.

Grant Audit Contingencies
Under the terms of federal and state grants, periodic audits by the granter agencies are required and certain costs may be questioned as not being appropriate expenditures under the terms of the grants. Such audits could lead to reimbursement to the granter agencies. Previous audits of the organization by the granter agencies have not resulted in disallowance.

NOTE 8 - LEASE OBLIGATIONS
The Center is obligated under the terms of an operating lease for the rental of equipment until January 11, 2021. Total rental payments were approximately $5,492 and $5,448 for the years ended December 31, 2019 and 2018, respectively. This amount is included in equipment expense in the accompanying statement of functional expenses. Future minimum rental payments are:
2020
12 5,448
$ 5,448
FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2018)
NOTE 9 - CONCENTRATION OF CREDIT RISK
The Center operates in Orange, California, and surrounding areas and is dependent upon the local economy.

The Center maintains cash balances at several financial institutions located in Southern California. The balances on deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At December 31, 2019 and 2018, the Center's uninsured cash balance total $45,804 and $5,006, respectively. Cash deposited in financial institutions differs from cash presented in the statement of financial position due to timing differences, respectively.

NOTE 10 - FUNDRAISING EVENTS
The Center conducted fundraising events to assist in funding program operations. All revenues received in excess of expenses from the events are used for the current program operations. The costs that are direct benefits to the donors are included in Donor Benefit Expenses.

The fundraising revenues and expenses are as follows for the year ended December 31, 2019:

Revenue
Donor Net of Donor
Gross Benefit Benefit
Revenue Ex~enses Ex~enses
Street Fair $ 51,386 $ 15,981 $ 35,405
Golf Tournament 31,798 10,233 21,565
Partnership Banquet 109,668 16,708 92,960
Other 7,090 7 090
$199,942 $ 42,922 $ 157,020
13 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2017)
NOTE 10 - FUNDRAISING EVENTS (Continued)
The fundraising revenues and expenses are as follows for the year ended December 31, 2018:

Revenue
Donor Net of Donor
Gross Benefit Benefit
Revenue Ex~enses Ex~enses
Street Fair $ 37,207 $ 9,735 $ 27,472
Golf Tournament 20,422 7,200 13,222
Partnership Banquet 76,819 9,549 67,270
Other 11,500 11,500
$ 145,948 $ 26,485 $ 119,464
NOTE 11 - FAIR VALUE MEASUREMENTS
GAAP establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2: Other observable inputs, which include quoted prices for similar assets and liabilities, and market support inputs. These inputs could include such items as interest rates, yield curves, auction prices for equipment or per square foot selling prices for real estate.

Level 3: Inputs that are unobservable inputs for assets and liabilities are based on the Organization's assumptions. These include inputs that are internally developed and estimated.

In instances where the determination of the fair value measurement is based upon inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair measurement in its entirety.
14 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2017)
NOTE 11 - FAIR VALUE MEASUREMENTS (Continued)
Fair Values Measured on a Recurring Basis
Fair values of assets measured on a recurring basis at December 31, 2019 are as follows:

Fair Market
Value
Certificates of deposit ==$====2==1==2±=,4==7==8
Fair Values Measured on a Recurring Basis
Quoted Prices
in Active
Markets for
Identical
Assets
Level 1
NONE
Significant
Other Significant
Observable Unobservable
Inputs Inputs
Level 2 Level 3
$212,478 NONE
Fair values of assets measured on a recurring basis at December 31, 2018 are as follows:

Fair Market
Value
Certificates of deposit =$==1==3==7:!=, 1==6==9
Quoted Prices
in Active
Markets for
Identical
Assets
Level 1
NONE
Significant
Other
Observable
Inputs
Level2
$137,169
Significant
Unobservable
Inputs
Level3
NONE
Fair values for certificates of deposit are determined by reference to quoted market prices and other relevant information generated by market transactions.

The carrying value of cash and cash equivalents, receivables, other assets, accounts payable, accrued expenses are reasonable estimates of fair value due to the short term nature of these financial instruments and consequently these instruments are not presented in the table shown above, as there are no changes in the valuation of any of these financial instruments.
15 FRIENDLY CENTER, INC.

FINANCIAL STATEMENTS
DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE
INFORMATION FOR 2017)

TABLE OF CONTENTS

INDEPENDENT AUDITORS' REPORT

INDEPENDENT AUDITORS' REPORT
To the Board of Board of Directors of
Friendly Center, Inc.

Report on the Financial Statements
Patrick S. Guzman, C.P.A.

Mark Gray, C.P.A.

We have audited the accompanying financial statements of Friendly Center, Inc. (the "Center") (a nonprofit organization), which comprise the statement of financial position as of December 31, 2018, and the related statements of activities and change in net assets, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements.

Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Organization as of December 31, 2018, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Summarized Comparative Information
We have previously audited the Friendly Center's 2017 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated March 21, 2018. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2017, is consistent, in all material respects, with the audited financial statements from which it has been derived.

Guzman & Gray CPAs
Long Beach, CA
March 1, 2019
2 FRIENDLY CENTER, INC.

STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2017)
ASSETS
Without Donor With Donor
Restrictions Restictions 2018 2017
Current Assets
Cash and cash equivalents $ 862,283 $ 69,122 $ 931,405 $ 1,009,835 Receivables 1281840 1281840 1631351
9911123 691122 110601245 111731186
Investments-certificates of deposit 126,576 10,593 137 169 36145 Property and Equipment, Net
of Accumulated Depreciation
Property and equipment
Land 40,617 40,617 40,617
Building and building
improvements 241,402 241,402 241,402
Leasehold improvements 27,723 27,723 27,723
Furniture and equipment 99,772 99,772 103,990
Transportation 13 463 13 463 13 463
422,977 422,977 427,195
Less accumulated depreciation p671551} {3671551} {3741224) 55A26 55A26 521971
Other Assets
Deposits 51526 51526 51350
TOT AL ASSETS $ 1 I 1781651 $ 79 715 $ 112581366 $ 112671652

LIABILITIES AND NET ASSETS
Without Donor With Donor
Restrictions Restictions 2018 2017
Current Liabilities
Accounts payable $ 42,645 $ 42,645 $ 33,868
Tenant deposits 2,193 2,193 2,190
Deferred revenue 21,401 21,401 33,107
Accrued payroll and related 33 997 331997 40 881
TOTAL LIABILITIES 1001236 1001236 110 046
Net Assets
Without donor restiction 1,078,415 1,078,415 1,058,505
With donor restriction $ 79,715 79,715 95,101
Perpetual purpose 4 000
TOTAL NET ASSETS 11078A15 79 715 1 I 1581130 111571606

TOTAL LIABILITIES AND
NET ASSETS $ 1i 1781651 $ 79 715 $ 112581366 $ 112671652 See Independent Auditors' Report and Accompanying Notes to Financial Statements 3 FRIENDLY CENTER, INC.

STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2017)
Without Donor With Donor
Restrictions Restrictions 2018

SUPPORT AND REVENUE
Support
Grants $ 630,566 $ 45,000 $ 675,566
Contributions, individuals 86,740 86,740
Contributions, churches and
other organizations 99,059 99,059
Donated support 2,898,444 2,898,444
Release of restrictions 64,386 (64,386)
Total Support 3,7791195 {191386) 3,7591809
Revenue
Rent income 99,115 99,115
Interest income 4,743 4,743
Miscellaneous income/(loss) 4,254 4,254
Fundraising, Net of donor benefit
expense of $26,574 and $24,522 119,484 119,484
Total Revenue 227,596 227,596
TOTAL SUPPORT AND REVENUE 4,006,791 (19,386) 3,987,405

EXPENSES
Program services 3,733,427 3,733,427
Support services 253,451 253,451
TOTAL EXPENSES 3,986,878 3,986,878
CHANGE IN NET ASSETS 19,910 (19,386) 524
NET ASSETS, BEGINNING OF YEAR 1,058,505 99,101 1,161,606 NET ASSETS, END OF YEAR $ 1,078,415 $ 79,715 $ 1,162,130 See Independent Auditors' Report and Accompanying Notes to Financial Statements 4 2017
$ 884,616
109,783
44,207
2,053,187
3,091,793
96,702
3,550
(467)
145,294
245,079
3,336,872
2,949,400
231,712
3,181,112
155,760
1,001,846
$ 1,157,606
FRIENDLY CENTER, INC.

STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2017)
Program sueeorting
Management
General and Fund Cost of
Programs Housing Total General Raising Goods Sold Total 2018 2017 Accounting and auditing $ 3,240 $ 3,240 $ 8,710 $ 8,710 $ 11,950 $ 11,675 Bank charges $ $ 626 $ 626 $ 626 763
Bad debts $ $ $ $ 263
Contract $ 4,187 $ 4,187 $ - $ 4,187 7,678
Depreciation $ 4,267 $ 3,341 $ 7,608 $ - $ 7,608 7,518
Fund raising $ $ 30,151 $ 30,151 $ 30,151 28,445
In-kind facilities $ 324,000 $ 324,000 $ - $ 324,000 342,000 In-kind food & other $ 2,574,444 $ 2,574,444 $ - $ 2,574,444 1,711,187 Insurance $ 14,224 $ 6,886 $ 21,110 $ - $ 21,110 18,526 Professional fees $ 4,364 $ 1,745 $ 6,109 $ 584 $ 552 $ 1,136 $ 7,245 3,489 Repairs and maintenance $ 375 $ 1,773 $ 2,148 $ 3,311 $ 3,311 $ 5,459 3,965 Miscellaneous $ 225 $ 225 $ 3,293 $ 1,621 $ 4,914 $ 5,139 5,141 Office supplies $ 1,871 $ 1,080 $ 2,951 $ 4,057 $ 4,057 $ 7,008 5,796 Membership dues $ - $ 1,278 $ 1,278 $ 1,278 968
Salaries and wages $ 586,542 $ 12,262 $ 598,804 $ 82,465 $ 84,917 $ 167,382 $ 766,186 824,204 Employee benefits $ 23,745 $ 23,745 $ 4,179 $ 5,346 $ 9,525 $ 33,270 34,658 Payroll taxes $ 51,850 $ 1,114 $ 52,964 $ 7,460 $ 5,446 $ 12,906 $ 65,870 71,233 Postage $ $ 994 $ 437 $ 1,431 $ 1,431 1,114
Printing $ 8,012 $ 8,012 $ 4,052 $ 3,972 $ 8,024 $ 16,036 13,608 Equipment $ 6,129 $ 6,129 $ $ 6,129 281
Program $ 67,904 $ 6,000 $ 73,904 $ - $ 73,904 64,314
Taxes $ 1,911 $ 1,911 $ - $ 1,911 1,987
Cost of direct benefits to donors $ 26,574 $ 26,574 $ 26,574 24,522 Transportation $ 3,999 $ 3,999 $ - $ 3,999 4,705
Utilities $ 12,249 $ 5,688 $ 17,937 $ - $ 17,937 17,594 Total expenses by function $ 3,683,975 $ 49,452 $ 3,733,427 $ 121,009 $ 132,442 $ 26,574 $ 280,025 $ 4,013,452 $ 3,205,634 Less expenses included with revenues
on the statement of activities
Cost of direct benefit to donors - - - {26,574} $ {26,574} {26,574} {24,522} Total expenses included in the
expense section on the statement
of activities 3,683,975 49,452 3,733,427 121,009 132,442 253,451 3,986,878 _ -~181.112 See Independent Auditors' Report and Accompanying Notes to Financial Statements. 5 FRIENDLY CENTER, INC.

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2017)

CASH FLOWS FROM OPERATING ACTIVITIES
Change in net assets
Adjustments to reconcile net income to net
cash provided by operating activities:

Depreciation
Donated investments
(Increase) decrease in:

Receivables
Prepaid expenses
Deposits
Increase (decrease) in:

Accounts payable
Accrued payroll and related
Tenant deposits
Deferred revenue

NET CASH FROM OPERA TING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets
Reinvested dividends
Proceeds from sale of investments

NET CASH FROM INVESTING ACTIVITIES

NET INCREASE IN CASH

CASH AT BEGINNING OF YEAR

CASH AT END OF YEAR

SUPPLEMENTAL DISCLOSURES

INTEREST PAID

INCOME TAXES PAID

NON-CASH TRANSACTIONS
Non-monetary contributions
Non-monetary contribution of donated stock
$
$
2018
524 $
7,608
34,511
(176)
8,777
(6,884)
3 (11,706)
32,657
(10,063)
(101,024)
(111,087)
(78,430)
1,009,835
2017
155,760
7,518
(14,720)
(9,228)
158
(18,183)
961
455
(48,326)
74,395
(879)
(49)
14,720
13,792
88,187
921,648
931,405 $ 1,009,835

NONE NONE

NONE NONE
$ 2,898,444 $ 2,053,187
NONE 14 720
See Independent Auditors' Report and Accompanying Notes to Financial Statements. 6 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2017)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING

Basis of Accounting
The Center uses the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

Without Donor Restrictions - Those resources not subject to donor-imposed restrictions. The board of directors has discretionary control over these resources.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2017)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES {Continued)
Cash and Cash Equivalents
The Center considers cash on hand, demand deposits and highly-liquid investments with original maturities of three months or less.

Pledge and Accounts Receivable
Pledges are recognized when legally enforceable and all conditions to the pledge have been met. Revenues earned but not received are recorded as a receivable.

No allowance for uncollectible pledges has been established as management believes the total amount to be fully collectible within the next year.

Grants
Revenues from grants are recorded when earned, in accordance with the terms of the grant. Grant funds earned, but not received, are accrued.

Property and Equipment
All property and equipment are recorded at cost if purchased, and at fair value, if donated.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2017)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fair Value of Financial Instruments
Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date.

Reporting of Subsequent Events
In preparing these financial statements, the Center has evaluated events and transactions for potential recognition or disclosure through March 1, 2019, the date the financial statements were available to issue.

Recently Issued Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (ASU 2016-02).

The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Center is currently evaluating the impact of the adoption of the new standard on the financial statements.
9 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2017)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Summarized Comparative Totals
The financial statements include certain prior year summarized comparative information that does not include sufficient detail to constitute a presentation in conformity with GAAP.

Accordingly, such information should be read in conjunction with the Center's financial statements for the year ended December 31, 2017, from which the summarized information was derived.

NOTE 2 - NET ASSETS WITH DONOR RESTRICTIONS
Net Assets with donor restrictions are restricted as follows:

Subject to expenditure for programs
Subject to endowment spending policy
Total Net Assets with donor restrictions
2018
$75,715
4,000
$79,715
2017
$95,101
4,000
$99.101
Net Assets were released from donor restrictions by incurring expenses satisfying the restricted purpose or by occurrence of the passage of time or other events specified by the donors as follows for the years ended December 31, 2018 and 2017:

Satisfaction of purpose restrictions
NOTE 3 - ENDOWMENT
$$64,386 $13,699
The Endowment consist of $4,000 established by a donor to provide annual funding for programs. The Board of Directors has interpreted the Uniform Prudent Management of institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the date of the donor-restricted endowment funds, unless there are explicit donor stipulations to the contrary. At December 31, 2018 and 2017, there were no such donor stipulations. As a result of this interpretation, we retain in perpetuity the original value of initial and subsequent gift amounts. The Endowment is invested in a certificate of deposit.
10 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2017)
NOTE 4 - PROPERTY AND EQUIPMENT, NET
Property and equipment, net, as of December 31, 2018 and 2017 is summarized as follows:
2018 2017
Land $ 40,617 $ 40,617
Building and Building
Improvements 241,402 241,402
Leasehold Improvements 27,723 27,723
Furniture and Equipment 99,772 103,990
Transportation 13,463 13,463
Total 422,977 427,195
Less Accumulated Depreciation ( 367,551) ( 374,224)
Net $ 55,426 $ 52,971
Depreciation expense for the years ended December 31, 2018 and 2017 was $7,608 and $7,518, respectively.

NOTE 5 - LIQUIDITY AND AVAILABILITY
The Organization maintains and manages adequate operating funds per policies set by the board of directors.

Financial assets available for general expenditure, that is, without donor or other restrictions limiting their use, within one year of the balance sheet date, comprise the following:

Cash and cash equivalents
Accounts receivable
Operating investments
Total
$ 862,283
128,840
126,576
$ 1,117,699
Our endowment funds consist of donor-restricted endowments. Income from donor restricted endowments is restricted for specific purposes, with the exception of the amounts available for general use. Donor-restricted endowment funds are not available for general expenditure.
11 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
{WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2017)
NOTE 6 - DONATED MATERIALS AND SERVICES
Donated materials and services for the years ended December 31, 2018 and 2017 is summarized as follows:

Food, Gifts & other
Rent
Services
2018
$2,517,957
324,000
56,484
$2.898,444
NOTE 7 - CONTINGENCIES AND CONCENTRATIONS
Support
2017
$1,691,707
342,000

19.480
$2,053.187
The Center receives a substantial amount of its support from federal, state and local governments. A significant reduction in the level of this support may have an adverse effect on the Center's programs and activities. Management does not project significant reductions in the near future.

Grant Audit Contingencies
Under the terms of federal and state grants, periodic audits by the grantor agencies are required and certain costs may be questioned as not being appropriate expenditures under the terms of the grants. Such audits could lead to reimbursement to the grantor agencies. Previous audits of the organization by the grantor agencies have not resulted in disallowance.

NOTE 8 - LEASE OBLIGATIONS
The Center is obligated under the terms of an operating lease for the rental of equipment until January 11, 2021. Total rental payments were approximately $5,448 and $6,237 for the years ended December 31, 2018 and 2017, respectively. This amount is included in equipment expense in the accompanying statement of functional expenses. Future minimum rental payments are:
2019
2020
12 $ 5,448
5,448
$ 10.896
FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2018
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2017)
NOTE 9 - CONCENTRATION OF CREDIT RISK
The Center operates in Orange, California, and surrounding areas and is dependent upon the local economy.

The Center maintains cash balances at several financial institutions located in Southern California. The balances on deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At December 31, 2018 and 2017, the Center's uninsured cash balance total $5,006 and $15,109, respectively. Cash deposited in financial institutions differs from cash presented in the statement of financial position due to timing differences, respectively.

The fundraising revenues and expenses are as follows for the year ended December 31, 2018:

Street Fair
Golf Tournament
Partnership Banquet
Other
Gross
Revenue
$ 37,207
20,422
76,819
11,500
$ 145.948
13 Donor
Benefit
Expenses
$ 9,735
7,200
9,549
$ 26.485
Revenue
Net of Donor
Benefit
Expenses
$ 27,472
13,222
67,270
11,500
$ 119.464
FRIENDLY CENTER, INC.

Street Fair
Golf Tournament
Partnership Banquet
Other
Gross
Revenue
$ 50,569
32,781
77,798
10,720
$ 171.868
NOTE 11 - FAIR VALUE MEASUREMENTS
Donor
Benefit
Expenses
$ 11,905
6,983
7,686
$ 26.574
Revenue
Net of Donor
Benefit
Expenses
$ 38,664
25,798
50,112
10,720
$ 145.294
GAAP establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 3: Inputs that are unobservable inputs for assets and liabilities are based on the Organization's assumptions. These include inputs that are internally developed and estimated.

Fair Market
Value
Certificates of deposit =$==1==3==7=-=. 1==6==9
Fair Values Measured on a Recurring Basis
Quoted Prices
in Active
Markets for
Identical
Assets
Level 1
NONE
Significant
Other Significant
Observable Unobservable
Inputs Inputs
Level2 Level 3
$137.169 NONE
Fair values of assets measured on a recurring basis at December 31, 2017 are as follows:

Quoted Prices
in Active Significant
Markets for Other Significant
Identical Observable Unobservable
Fair Market Assets Inputs Inputs
Value Level 1 Level2 Level3
Certificates of deposit $ 36.145 NONE $36.145 NONE
Fair values for certificates of deposit are determined by reference to quoted market prices and other relevant information generated by market transactions.

FINANCIAL STATEMENTS
DECEMBER 31, 2017
(WITH SUMMARIZED COMPARATIVE
INFORMATION FOR 2016)

TABLE OF CONTENTS
INDEPENDENT AUDITORS' REPORT 1 - 2

FINANCIAL STATEMENTS
Statement of Financial Position 3
Notes to Financial Statements 7 - 15
Statement of Activities and Changes in Net Assets 4
Statement of Functional Expenses 5
Statement of Cash Flows 6

Guzman & Gray
Certified Public Accountants
4510 East Pacific Coast Highway, Suite 270 Patrick S. Guzman, C.P.A.

Long Beach, California 90804 Mark Gray, C.P.A.
(562) 498~0997 Fax: (562) 597~7359

INDEPENDENT AUDITORS' REPORT
To the Board of Board of Directors of
Friendly Center, Inc.

Report on the Financial Statements
We have audited the accompanying financial statements of Friendly Center, Inc. (the "Center") (a nonprofit organization), which comprise the statement of financial position as of December 31, 2017, and the related statements of activities and change in net assets, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements.

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.
1 INDEPENDENT AUDITORS' REPORT (Continued)
Auditors' Responsibility (Continued)
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 Qrganization as of December 31, 2017, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Summarized Comparative Information
We have previously audited the Friendly Center's 2016 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated March 4, 2017. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31,2016, is consistent, in all material respects, with the audited financial statements from which it has been derived.

Guzman & Gray CPAs
Long Beach, CA
March 21, 2018
2 FRIENDLY CENTER, INC.

STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2017
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2016)
ASSETS
Unrestricted
Temporarily
Restricted
Permanently
Restricted 2017 2016
Current Assets
Cash and cash equivalents
Receivables
Prepaid expenses
$ 921,327
163,351
1,084,678
$ 88,508
88,508
$ 1,009,835
163,351
11173,186
$ 921,648
154,123
1,075,771
Investments-certificates of deposit 25,552 6,593 $ 4,000 36,145 36,095 Property and Equipment, Net
of Accumulated Depreciation
Property and equipment
Land
Building and building
improvements
Leasehold improvements
Furniture and equipment
Transportation
Less accumulated depreciation
40,617
241,402
27,723
103,990
13,463
427,195
(374,224}
52,971
40,617
241,402
27,723
103,990
13,463
427,195
(374,224i
52,971
40,617
241,402
27,723
103,112
13,463
426,317
(366,706}
59,611
Other Assets
Deposits 5,350 5,350 5,508
TOTAL ASSETS $ 1,168,551 $ 95,101 $ 4,000 $ 1,2671652 $ 1,176,985

LIABILITIES AND NET ASSETS
Unrestricted
Temporarily
Restricted
Permanently
Restricted 2017 2016
Current Liabilities
Accounts payable
Tenant deposits
Deferred revenue
Accrued payroll and related

TOTAL LIABILITIES
$ 33,868
2,190
33,107
40,881
110,046
$ 33,868
2,190
33,107
40,881
110,046
$ 52,051
1,735
81,433
39,920
175,139
Net Assets
Unrestricted
Temporarily restricted
Permanently restricted

TOTAL NET ASSETS
1,058,505
1,058,505
$ 95,101
95,101
$ 4,000
4,000
1,058,505
95,101
4!000
1,157!606
979,706
18,140
4,000
1,001,846

TOTAL LIABILITIES AND
NET ASSETS $ 1.168,551 $ 95 1101 $ 1,267,652 $ 1,1761985 See Independent Auditors' Report and Accompanying Notes to Financial Statements 3 6
FRIENDLY CENTER, INC.

STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS
DECEMBER 31, 2017
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2016)
Temporarily Permanently
Unrestricted Restricted Restricted 2017

SUPPORT AND REVENUE
Support
Grants $ 796,059 $ 88,557 $ 884,616 $ 872,242
Contributions, individuals 109,783 109,783 53,892
Contributions, churches and
other organizations 44,207 44,207 58,299
Donated support 2,053,187 2,053,187 2,064,820
Release of restrictions 11,596 {11,596}
Total Support 3,014,832 76,961 3,091,793 3,049,253
Revenue
Rent income 96,702 96,702 94,518
Interest income 3,550 3,550 2,246
Miscellaneous income/(Ioss) (467) (467) 1,568
Fundraising, Net of donor benefit
expense of $26,574 and $24,522 145,294 145,294 131,778
Total Revenue 245,079 245,079 230,110
TOTAL SUPPORT AND REVENUE 3,259,911 76,961 3,336,872 3,279,363

EXPENSES
Program services 2,949,400 2,949,400 3,007,440
Support services 231,712 231,712 248,247
TOTAL EXPENSES 3,181,112 3,181,112 3,255,687
CHANGE IN NET ASSETS 78,799 76,961 155,760 23,676
NET ASSETS, BEGINNING OF YEAR 979,706 18,140 $ 4,000 1,001,846 978,170 NET ASSETS, END OF YEAR $ 1,058,505 $ 95,101 $ 4,000 $ 1,157,606 $ 1,001,846 See Independent Auditors' Report and Accompanying Notes to Financial Statements 4 FRIENDL Y CENTER, INC.

STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED DECEMBER 31,2017
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2016)
General
Programs
Program
Housing
Management
and
General
Sueeorting
Fund
Raising Total 2017 2016
Accounting and auditing
Bank charges
Bad debts
$ 5,425 $ 6,250
263
$ 11,675
263
$ 763 $ 763
$ 11,675
763
263
$ 11,400
Contract 7,678 7,678 7,678 5,536
Depreciation
Fundraising
In-kind facilities
In-kind food & other
4,177
342,000
1,711,187
3,341 7,518
342,000
1,711,187
$ 28,445 28,445
7,518
28,445
342,000
1,711,187
11,555
25,366
325,212
1,732,808
Insurance 13,676 4,850 18,526 18,526 18,398
Professional fees
Repairs and maintenance
Miscellaneous
Office supplies
Membership dues
Salaries and wages
Employee benefits
Payroll taxes
Postage
Printing
1,509
284
1,392
651,032
24,736
56,081
6,798
1,587
1,173
3,374
1,385
11,129
1,192
3,096
1,457
3,374
2,777
662,161
24,736
57,273
6,798
202
2,508
755
3,019
968
93,642
4,354
8,069
774
3,439
191
1,012
68,401
5,568
5,891
340
3,371
393
2,508
1,767
3,019
968
162,043
9,922
13,960
1,114
6,810
3,489
3,965
5,141
5,796
968
824,204
34,658
71,233
1,114
13,608
3,676
4,875
2,944
9,993
892
902,471
23,790
82,024
1,899
12,475
Equipment
Program
Taxes
281
58,314 6,000
1,987
281
64,314
1,987
281
64,314
1,987
664
56,531
2,941
Transportation
Utilities
4,705
11,985 5,609
4,705
17,594
4,705
17,594
2,260
17,977
$ 2,893,582 $ 55,818 $ 2,949,400 $ 118,493 $ 113,219 $ 231,712 $ 3,181,112 $ 3,255,687 See Independent Auditors' Report and Accompanying Notes to Financial Statements. 5 FRIENDLY CENTER, INC.

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2017
(WITH SUMMARIZED COMPARATIVE TOTALS FOR 2016)

CASH FLOWS FROM OPERATING ACTIVITIES
Change in net assets
Adjustments to reconcile net income to net
cash provided by operating activities:

Depreciation
Donated investments
(Increase) decrease in:

Receivables
Prepaid expenses
Deposits
Increase (decrease) in:

Accounts payable
Accrued payroll and related
Tenant deposits
Deferred revenue

NET CASH FROM OPERATING ACTIVITIES

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets
Reinvested dividends
Proceeds from sale of investments

NET CASH FROM INVESTING ACTIVITIES

NET INCREASE IN CASH

CASH AT BEGINNING OF YEAR

CASH AT END OF YEAR

SUPPLEMENTAL DISCLOSURES

INTEREST PAID

INCOME TAXES PAID

NON-CASH TRANSACTIONS
Non-monetary contributions
Non-monetary contribution of donated stock
7 2016
$ 155,760 $ 23,676
7,518
(14,720)
(9,228)
158
11,555
(5,413)
3,220
(2,387)
(18,183)
961
455
(48,326)
18,359
(6,937)
(472)
4,415
74,395 46,016
(879)
(49)
14,720
(12,175)
49,815
13,792 37,640
88,187 83,656
921,648 837,992
$ 1,009,835 $ 921,648

NONE NONE

NONE NONE
$ 2,053.187 $ 2.064.820
$ 14,720 NONE
See I ndependent Auditors' Report and Accompanying Notes to Financial Statements. 6 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2017
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2016)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING

Basis of Accounting
The Center uses the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

Financial Statement Presentation
The financial statements of the Center have been prepared on the accrual basis of accounting. Net assets categorized as unrestricted, temporarily restricted, or permanently restricted, a description of which is as follows:

Unrestricted net assets is utilized to record contributions, special events, fees and other forms of unrestricted revenue and expenditures related to the general operations and special events efforts of the organization that are not restricted by the donor through uses or time restrictions.

Temporarily restricted net assets are utilized to record resources received that are temporarily restricted as to use or expiration of time. Contributions whose restrictions are met in the same reporting period are recorded as unrestricted.

Permanently restricted net assets are utilized to record resources received that are permanently restricted as to use by the donor or grantor. 7 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2016)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cash and Cash Equivalents
The Center considers cash on hand, demand deposits and highly-liquid investments with original maturities of three months or less.

Pledge and Accounts Receivable
Pledges are recognized when legally enforceable and all conditions to the pledge have been met. Revenues earned but not received are recorded as a receivable.

No allowance for uncollectible pledges has been established as management believes the total amount to be fully collectible within the next year.

Grants
Revenues from grants are recorded when earned, in accordance with the terms of the grant. Grant funds earned, but not received, are accrued.

Property and Equipment
All property and equipment are recorded at cost if purchased, and at fair value, if donated.

Functional Expenses
Operating expenses directly identified with a functional area are charged to that area.

Expenses affecting more than one functional area are allocated to the respective areas on the basis of ratios estimated by management.
8 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2016)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fair Value of Financial Instruments
Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date.

Reporting of Subsequent Events
In preparing these financial statements, the Center has evaluated events and transactions for potential recognition or disclosure through March 21, 2018, the date the financial statements were available to issue.

Recently Issued Accountinq Pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue 'from Contracts with Customers (Topic 606) (ASU 2014-09), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.

The updated standard will replace most existing revenue recognition guidance in generally accepted accounting principles of the United States when it becomes effective and permits the use of either a full retrospective or retrospective with cumulative effect transition method. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09 one year making it effective for annual reporting periods beginning after December 15, 2018. The Center has not yet selected a transition method and is currently evaluating the effect that the standard will have on the financial statements.
9 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2016)
Recently Issued Accounting Pronouncements (Continued)
In February 2016, the FASB issued ASU 2016-02. Leases (Topic 842) (ASU 2016-02).

The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Center is currently evaluating the impact of the adoption of the new standard on the financial statements.

In August 2016, the FASB released ASU 2016-14, Presentation of Financial Statements of Not-for-Profit Entities (Topic 958). The update amends the current reporting model for nonprofit organizations and enhances their required disclosures. The major changes relate to: (a) presentation of classes of net assets, (b) the presentation of underwater endowment funds and related disclosures, (c) recognition of the expirations of restrictions on gifts used to acquire or construct long-lived assets absent explicit donor stipulations otherwise, (d) statement of functional expense, (e) disclosure of quantitative and qualitative information regarding liquidity and availability of resources; and a few smaller items. The ASU is effective for fiscal years beginning after December 15, 2017. The Center is currently evaluating the impact of the adoption of the new standard on the financial statements.

Summarized Comparative Totals
The financial statements include certain prior year summarized comparative information that does not include sufficient detail to constitute a presentation in conformity with GAAP.

Accordingly, such information should be read in conjunction with the Center's financial statements for the year ended December 31, 2016, from which the summarized information was derived.
10 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2016)
NOTE 2 - PROPERTY AND EQUIPMENT. NET
Property and equipment, net, as of December 31, 2017 and 2016 is summarized as follows:
2017 2016
Land $ 40,617 $ 40,617
Building and Building
Improvements 241,402 241,402
Leasehold Improvements 27,723 27,723
Furniture and Equipment 103,990 103,112
Transportation 13,463 13,463
Total 427,195 426,317
Less Accumulated Depreciation ( 374.224) ( 366,706)
Net $ 52,971 $ 59,611
Depreciation expense for the years ended December 31,2017 and 2016 was $7,518 and $11,555, respectively.

NOTE 3 - TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted net assets for the years ended December 31, 2017 and 2016 totaled $95,101 and $18,140, respectively_ Temporarily restricted net assets released from restrictions during the years ended December 31,2017 and 2016 were $11,596 and $13,404, respectively.

NOTE 4 - PERMANENTLY RESTRICTED CASH
The Center holds a certificate of deposit that includes temporarily and permanently restricted cash. The original principal of the permanently restriction portion was a $4,000 grant by the Kiwanis Club in 1989. The Center is not entitled to the $4,000; however, it may draw the interest earned. The grant from Kiwanis is for an indefinite period of time.

The total values for the certificate of deposit for each of the years ended December 31, 2017 and 2016 totaled $6,846. No permanently restricted net assets were released during the years ended December 31,2017 and 2016.
11 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2017
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2016)
NOTE 5 - DONATED MATERIALS AND SERVICES
Donated materials and services for the years ended December 31, 2017 and 2016 is summarized as follows:
2017 2016
Food, Gifts & other $1,691,707 $1,713,235
Rent 342,000 325,212
Services 19A80 26,373
$2,053,187 $2.064.820
NOTE 6 - CONTINGENCIES AND CONCENTRATIONS
Support
The Center receives a substantial amount of its support from federal, state and local governments. A significant reduction in the level of this support may have an adverse effect on the Center's programs and activities. Management does not project significant reductions in the near future.

NOTE 7 - LEASE OBLIGATIONS
The Center is obligated under the terms of an operating lease for the rental of equipment until January 11,2021. Total rental payments were approximately $6,237 and $6,162 for the years ended December 31,2017 and 2016, respectively. This amount is included in equipment expense in the accompanying statement of functional expenses. Future minimum rental payments are:
2018 5A48
2019 5,448
2020 5A48
$ 16.344
12 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31,2017
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2016)
NOTE 8 - CONCENTRATION OF CREDIT RISK
The Center operates in Orange, California, and surrounding areas and is dependent upon the local economy.

The Center maintains cash balances at several financial institutions located in Southern California. The balances on deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At December 31, 2017 and 2016, the Center's uninsured cash balance total $15,109 and $76,076, respectively. Cash deposited in financial institutions differs from cash presented in the statement of financial position due to timing differences, respectively.

NOTE 9 - FUNDRAISING EVENTS
The Center conducted fundraising events to assist in funding program operations. All revenues received in excess of expenses from the events are used for the current program operations. The costs that are direct benefits to the donors are included in Donor Benefit Expenses.

The fundraising revenues and expenses are as follows for the year ended December 31, 2017:

Revenue
Donor Net of Donor
Gross Benefit Benefit
Revenue Expenses Expenses
Street Fair $ 50,569 $ 11,905 $ 38,664
Golf Tournament 32,781 6,983 25,798
Partnership Banquet 77,798 7,686 70,112
Other 10.720 10,720
$ 171.868 $ 26,574 $ 145.294
13 FRIENDLY CENTER, INC.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2016)
NOTE 9 - FUNDRAISING EVENTS (Continued)
The fundraising revenues and expenses are as follows for the year ended December 31, 2016:

Revenue
Donor Net of Donor
Gross Benefit Benefit
Revenue Expenses Expenses
Street Fair $ 50,815 $ 10,557 $ 40,258
Golf Tournament 31,975 7,059 24,916
Partnership Banquet 57,846 6,906 50,940
Other 15.664 15.664
$ 156.300 $ 24.522
NOTE 10 - FAIR VALUE MEASUREMENTS
GAAP establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. The fair value hierarchy is as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 3: Inputs that are unobservable inputs for assets and liabilities are based on the Organization's assumptions. These include inputs that are internally developed and estimated.

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017
(WITH SUMMARIZED COMPARATIVE INFORMATION FOR 2016)
NOTE 10 - FAIR VALUE MEASUREMENTS (Continued)
Fair Values Measured on a Recurring Basis
Fair values of assets measured on a recurring basis at December 31,2017 are as follows:

Quoted Prices
in Active Significant
Markets for Other Significant
Identical Observable Unobservable
Fair Market Assets Inputs Inputs
Value Level 1 Level 2 Level 3
Certificates of deposit ~$=~3~6==.1~4~5 NONE $36.145 NONE Fair Values Measured on a Recurring Basis
Fair values of assets measured on a recurring basis at December 31,2016 are as follows:

Quoted Prices
in Active Significant
Markets for Other Significant
Identical Observable Unobservable
Fair Market Assets Inputs Inputs
Value Level 1 Level 2 Level 3
Certificates of deposit S 361095 NONE S~61095 ~ONE
Fair values for certificates of deposit are determined by reference to quoted market prices and other relevant information generated by market transactions.

References
Bonnie Hagan
Assistance City Manager
City of Orange
230 E. Chapman Ave.

Orange, CA 92866
(714) 744-7264
[email protected]
R
andy Balduck, MSW
Administrative Manager II
County of Orange, Social Services Agency Children & Family Services – FaCT/RDM/TFC 15405 Lansdowne Rd.

Tustin, CA 92782
(714)566-2828
[email protected]
M
ark Lee, MBA
Chief Executive Officer
Women’s Transitional Living Center, Inc. (WTLC)
P.O. Box 916
Fullerton, CA 92832
714-907-5777
[email protected]
E
llie Dinh
Director of Programs & Services
Second Harvest Food Bank of Orange County
8014 Marine Way
Irvine, CA 92618
949-208-3149
[email protected]

HONOR. EMPOWER. RESTART. OVERCOME.

2/22/2021

City of Fullerton
Attention: Purchasing c/o Jimmy Armenta
303 W. Commonwealth Avenue
Fullerton, CA 92832
Re: Support for Friendly Center (XXX)
Dear Mr. Armenta,
On behalf of the Women’s Transitional Living Center (WTLC), I write in support of the Friendly Center’s proposal to provide valuable services and programs at the Maple Neighborhood Center.

WTLC is a nonprofit organization with the mission of helping individuals and families escape the depths of domestic violence and exploitation. We empower survivors of domestic violence and human trafficking to find recovery through a three-fold approach of Bridge Housing, Supportive Services, and Prevention.

Friendly Center is a nonprofit organization with the mission of providing stability, opportunity, and hope to children and families in poverty. They help elevate families to overcome crisis and the barriers of poverty through comprehensive wrap-around services.

For over 6 years, WTLC and the Friendly Center have been in partnership through the Families and Communities Together (FaCT) initiative. FaCT pairs public and private enterprises to bring supportive services to communities that have limited resources to prevent child endangerment and promote healthy thriving environments. Through this partnership WTLC and the Friendly Center provide parenting and empowerment classes to survivors of domestic violence and their families disrupting the cycle of violence and preventing future violence for generations to come.

WTLC is excited about the possibility of increased resources to bring multiple services to the residents of Fullerton. We support the Friendly Center as the lead for this work and look forward to participating as a community linkage partner in this endeavor. If you have any questions, please contact me at [email protected]
or (714) 992-1939 ext. 105.

Sincerely,

Mark Lee, MBA
CEO

Administrative Offices: P.O. Box 916, Fullerton, CA 92836 714-992-1939 www.wtlc.org

City Council - Successor Agency - Housing AuthorityMarch 15, 2022

City Council - Successor Agency - Housing Authority
March 15, 2022