complaint·July 12, 2023

On 09/29/2022, between 10:58am and 3:45pm, Licensing Program Analyst (LPA) KaSandra Lopez conducted an unannounced initial complaint investigation inspection at the facility regarding the above allegation. LPA Lopez met with Administrator Ken Mahler at 10:58am and explained the reason for the inspection. During the inspection, the LPA conducted an interview with the Administrator. The LPA also conducted an interview with Christine Hanna at 11:43am, who was identified as a Managing Member of Global Premier Regency Palms Oxnard, LP and visiting the facility. A physical plant tour of the facility began at 11:29am. The LPA observed the facility to have a seven-day supply of non-perishable food and two-day supply of perishable food, along with a sufficient supply of emergency water, personal protective equipment, and cleaning supplies. During the interview the Administrator denied the facility ever being without utilities, food, or supplies. The LPA determined further investigation was needed. Auditor Mojica reviewed documents which included the facility Income and Operating Expense statement for November 2022, rent roll revenues, resident census, billing statements for utilities for the period of 04/01/2022 through 10/31/2022, food expenses, lease agreement, balance sheet review reflecting assets and liabilities, bank statements, Paycheck Protection Program (PPP) loan letter, bankruptcy documents, management agreement, credit reports, worker’s compensation and liability insurance policies. The auditor requested copies of lease expenses and State and Federal tax forms which were not provided. Per review of the lease agreement, the licensee is to pay an amount equal to 100% of debt service on the property. However, the licensee did not report the lease expense. The licensee explained “lease payments were being accrued through lease-up, therefore, there has not been any payments made on the lease to date”. The auditor requested a list of lease expenses, but the licensee did not provide. The licensee is also obligated to pay real estate taxes (property taxes). However, the licensee did not report property taxes, only reported personal property tax. The bank statements revealed the licensee’s cash reserves varied during the period and bank statements showed a negative balance of $2,986.14 as of November 2022. The licensee had no available cash reserves. Per review of the utility statements provided, the licensee paid vendors timely and in full. The auditor verified the licensee maintains the required worker’s compensation and liability insurance coverage. The investigation revealed the licensee did not file State or Federal Tax forms and has not paid property taxes. The licensee reported $13,839 food costs in the Income and Operating Expense statement. The auditor calculated the monthly food costs which were below the USDA guideline amounts of $14,061.90. On 08/16/2022, the licensee filed Chapter 11 bankruptcy, also known as a “reorganization” bankruptcy to reorganize the debtor’s business affairs, debts, and assets. Per the bankruptcy documents provided, the debtor, Global Premier Regency Palms Oxnard LP, owns both the licensee (as Subsidiary) and the building/property (as Principal Asset). The address is listed as the facility address located at 1020 Bismark Way in Oxnard, CA. Secured creditors hold liens on the property, which provides for the property to be sold in case of default in order to satisfy the debt. During the investigation it was noted the licensee previously paid a monthly management fee of $15,000 to Meridian Senior Living Management to oversee the operations of the facility. As of 03/12/2023, the licensee decided to transition operations to “owner operated” and no longer uses the management company. Based on the information obtained and reviewed, the Department has determined the licensee has not established a financial plan that complies with the financial requirements contained in CCR, Title 22, Division 6, Chapter 8, Article 4, Section 87213 Finances. This is evidenced by the licensee’s monthly food expenses reported were below the USDA guidelines; the November 2022 operating loss of $54,336; the licensee did not maintain sufficient cash reserves and had negative cash balance of $2,986.14 as of November 2022; and the licensee did not file State or Federal taxes nor paid property taxes, which are included in the bankruptcy documents. Therefore, the allegation “Facility is in financial distress” is deemed Substantiated at this time. Pursuant to Title 22, California Code of Regulations, the following deficiencies are cited (refer to LIC 9099-D). Exit interview conducted, appeal rights discussed, and a copy of this report issued. Please see the details of the plan of correction of the following page. Provide to CCLD Audits Section by July 31, 2023: 1. A budget showing all anticipated income and expenses for each month, projected for 12 months beginning July 1, 2023 through June 30, 2024. 2. By the 3rd week following each quarter of the period, beginning July 1, 2023 thru June 30, 2024, provide to Audits Section: · An income statement (LIC 401 or equivalent) - for the 3rd month of the quarter. · Savings and Checking bank statements (accounts used in organization’s operations) – for each month in the quarter. · Resident Census for each month in the quarter. · Other information and documents to be requested, as needed. Source documents used to prepare the income statement must be provided. Auditor must be able to vouch reported revenues and expenditures to source documents provided. For example , Income Statement and accompanying support for quarter ending September 30, 2023 are due to Audits Section October 16, 2023 by COB. 3. Quarterly financial reporting is to continue for a period of 2 quarters (to December 31, 2023), or until it is evident that the licensee has a financial plan that satisfies CCR Section 87213.”