Year End Report 2022

MARCH 2023

February 1, 2022

Dear Residents,

While preparing this report, I couldn’t help but be impressed by the resilience, perseverance, and support that has been on display at Westminster Village over the past few years. From the uncharted financial and societal territory that COVID brought, through recovering our identities after adjusting to the “new normal”, to the resulting inflationary environment and all it impacted, the Spirit of this Community shined through and created a stronger Westminster Village than we may have ever imagined. The unanticipated strain on resources and cost increases were met with resourcefulness, understanding, and determination that has been heartening to see.

While these challenges brought about several cost-containment and savings measures, and achievements in operational efficiencies, it became obvious more had to be done. As difficult as the decision was, in the final analysis, the Board of Directors made the decision to increase monthly rates for September 1, 2022, and January 1, 2023 to respond to the unprecedented cost increases that continue to impact nearly everything in our lives. This adjustment was needed to insure the generation of sufficient income to cover increasing operating costs while also preserving the impeccable service standards and quality of care that are the hallmarks of Westminster Village.

Since the announcement, I’ve received several inquiries about the overall financial stability of Westminster Village. While the continued strain of inflation and escalating wages persists, as do expenses related to COVID and its aftermath, our cash position remains strong. The monthly fee increases, gains in operational efficiencies, and ongoing cost-saving initiatives will make possible the positive steps required to secure the financial well-being of Westminster Village now and into the future.

While prudent fiscal administration is critical to remaining financially sound, we acknowledge our foundation is truly built upon the dedication and talent

of our caring staff. Additionally, without the confidence and support of our valued residents, Westminster Village would quickly become just another community. The mix of caring staff and the trust of residents is a strong combination that makes Westminster Village our cherished home.

I invite you to read this report as a concerned neighbor and resident. It focuses on developments and accomplishments within the five pillars of our Strategic Plan: Culture, Technology, Programs, Our Campus, and Finances. Please feel free to contact me directly if you have any questions, suggestions, or concerns. I am always happy to see and hear from you!

Sincerely,

Tom Winkelman Chief Executive Officer

Culture: Community Happens Here

People make the difference at Westminster Village. That’s why, in nurturing our unique community culture, retaining our valued employees is always a top priority. The loss of team members takes a personal toll on our residents, disrupts services, and affects the wellbeing of everyone working and living in our community.

Sustaining a strong culture also requires listening to our residents, engaging with them in community projects, and responding with a sense of urgency to their needs. We have made progress in both employee and resident satisfaction through a number of initiatives.

Job Satisfaction is Job One

While fair and competitive compensation is critical, keeping employees happy requires more than just a paycheck. In 2022, our Human Resources department continued to focus on the importance of new employee orientation, ongoing training, coaching, and regular meetings to keep our staff connected, informed, and engaged. Company culture is a top priority for potential job seekers, which means a positive workplace culture is crucial to recruitment and retention.

We are proud of a staff retention rate that indicates high job satisfaction among our staff. Over 50% of our team members have worked at Westminster Village for over 5 years with four employed with us for over 30 years.

Taking Care of Those Who Take Care of Us

With the assistance and enthusiasm of our residents, we made concentrated efforts to demonstrate our appreciation for our employees in ways both large and small. Whether it’s our monthly Hall of Fame celebrations, daily accolades written on comment cards, or groceries to take home and share with their families, we show our employees how much they mean to us every way we can.

In 2022, to assist in offsetting the inflationary costs to our staff we provided $160,000 of meals and groceries. We were also pleased 17 of our employees took advantage of our scholarship and personal development program(s) this year. Additionally, a larger number of employees participated in our benefits program in 2022, meaning a greater number of needs are being met.

The Employee Holiday party is another special event that continues to mean so much to our staff and their families each year. The 2022 party was a record year for resident contributions to the employee gift fund — thanks to the generosity of our compassionate residents! The thoughtful contributions of our residents to this cause make the difference for employees buying gifts for their children and families.

Another record year for contributions to the employee gift fund thanks to the generosity, kindness, and compassion of our residents.

Caring to Comment

Sustaining a strong culture requires listening to and acting on feedback from employees and residents. Implementing the new comment cards program in 2022 allowed us to receive direct feedback from our residents, identify opportunities for improvement, and acknowledge outstanding employee performance and random acts of kindness.

Contributing to the Culture

Our residents remain extremely active in initiating and supporting new campus activities and programs that make Westminster Village a fun and unique place to live. The creation and success of the Heart to Heart program, the formation of the Jazz Series, maintenance of the beautiful Butterfly Garden, and construction of the Observatory were resident-created programs that will benefit our community for years to come.

Playing Together

Between resident activities and fitness classes, we bring residents together in over 300 social events every month.

Resident Comment Card Rating is 4.4 out of 5 with the Resident Services team receiving the highest overall score.

Opportunities to Serve

As a stand-alone, non-profit community, no single person or group owns us, which means it is incumbent on each of us to make this a great place to live and work. We recognize the invaluable contributions of those who volunteer to serve our community in countless ways.

The slate of talented individuals who ran for Resident Council this year was simply outstanding. We appreciate the dedication, leadership, and ongoing contributions of each committee member.

We are forever grateful for the “Card Ladies” who were recognized by the Board of Directors this year for their dedication and the joy they bring to residents and employees each week. And our Fabulous Finds store continues to prosper by displaying and selling select donations from residents which are always handled with care from our shop volunteers.

Several residents have requested to take part in the publication of the Villager each month, and we are happy we can expand opportunities to serve through this initiative in the coming year.

Our Culture is Catching On

Referrals we receive from residents and employees continue to make a huge impact on our community. In total, 45 new residents called Westminster Village home in 2022. We are overjoyed many of our new residents have friends living at Westminster Village who love it here, naturally. Additionally, a large portion of our employees hired this year were referrals from current employees.

85% of new neighbors are referred from friends who call Westminster Village home.

Technology: Elevates Service

Westminster Village continues to upgrade our technology infrastructure for improved services and community operations. By rebuilding our corporate network and implementing our cloud-based Office 365 solutions suite, we activated an easily accessible, common platform for our electronic communications and reporting. This transition not only created time-saving conveniences for greater productivity, but it also helped secure our data and defend against cyberthreats.

Keeping Connected

Other infrastructure improvements include an all-in-one infotainment system that combines community-wide TV, internet, and phone services that we can customize to our residents’ needs. By adding new technology and infrastructure residents have choices of internet system upgrade(s), upgraded internet security, television systems with digital recording, and premium channels. Additionally, the new phone system includes free long distance calling, voice mail, and optional call waiting. As a result, we expect to see a revitalized communication and entertainment experience for the current and future enjoyment of residents. These technological improvements will position us to meet the needs of future residents who expect a higher level of connectivity.

Now more than ever, both current and future residents rely on personal electronics and video streaming to connect with family and friends. To help support this technology it’s mandatory our community have a robust network and WiFi connectivity.

Residents and family members are logging into the Westminster Village portal approximately 850 times per month.

Convenience is on the Menu

Technology enhancements extend to our dining services. A new interactive kiosk is now in the Garden Café to expedite service and improve food order and billing accuracy. This upgrade also includes the ability to place orders and reserve tables online.

The Westminster Picker-Upper

Since making Westminster Village its home, our robotic vacuum has efficiently cleaned 534,793 square feet of carpet, which is equivalent to cleaning 3 Super Walmart stores! Not only do the carpets look cleaner but removing the grime and dirt without having to shampoo the carpet extends the life of the carpet.

Yardi Makes it Easy

The continued transition to the Yardi software system has improved our operations in so many ways. It saves precious time by eliminating repetitive processes and reducing the need to manually enter information into multiple databases. As a central hub for gathering and distributing information, it not only elevates efficiency and productivity but improves departmental collaboration.

For residents, the new Yardi Resident Portal provides the ease of online bill pay, ability to peruse upcoming campus activities, review the latest dining menus, access Board of Directors and Residents Association meeting minutes and other useful information. Additionally, family members of residents are now able to gain access to the Portal.

The Future Looks Bright and Light

Technology investments in 2022 included upgraded security cameras and lighting to protect the safety of our residents, staff, and guests.

Programs: Engagement Drives Decisions

Our Westminster Village Residents Council empowers collaboration by soliciting input from residents and encouraging engagement. The Council takes pride in the fact our residents have a voice in the community and their participation drives many campus decisions. As a result, we initiated, continued, and completed a number of programs in 2022 to improve and invest in the community we call home.

Weyrich Health Care Center Building Project

The Weyrich Health Care Center project brought staff, residents, and family members together to focus on the remodeling of this critical focal point of our campus. Construction will take place in multiple phases beginning this summer.

We are incredibly grateful for our sponsors, board members, staff members and Westminster Village residents, who helped us raise over $140,000 to support renovations to the Weyrich Health Care Center.

We also want to thank our residents, families, and our broader community for their unfailing support. That gratitude extends to our valued partner, Kirk Development, our exclusive 2022 Gala Heart of Gold sponsor.

Remodeling plans for the Center include spacious, elegantly designed, private and semi-private apartments. We will convert 32 units to private rooms, and add 3 semi-private suites, all with full bathrooms, new air conditioning systems, flooring, and paint. Corridors will also have a facelift with new flooring, handrails, and paint.

Mealtime is Our Time

We were delighted to expand the hours of operation in all three dining venues this year. Our dining venues have always been an important amenity for our residents and future residents to connect with neighbors and enjoy a great meal.

For Your Convenience

The opening of The Grove Marketplace provides both residents and employees with self-checkout options for select groceries, snacks, and beverages 24/7. Employees working the second shift, and third shift are tremendously appreciative of The Grove as well as our residents who might want a late-night snack.

Premier Program

Many of our new residents chose to purchase upgraded “premier” properties this year that offer extended patios and backyard features coupled with elevated interior spaces. We continue to provide select customization options for those residents wanting to invest in additional elements that reflect their tastes and preferences. Twenty apartments were sold as premium apartments in 2022.

Taking Credit

In 2022, we also launched the Resort Credit program which provides each resident with a monthly credit to use for services and amenities including housekeeping, meals, communication bundle, and more. While the program was a change to our standard program, many residents now enjoy the flexibility it offers and benefit from choosing their desired options.

Updating Our Emergency Preparedness Plans

Being prepared for a crisis ensures we have specific procedures for handling sudden or unexpected situations. At the onset of the pandemic, for example, we were able to act quickly due to the emergency preparedness plan already in place. The process of updating these plans in 2022 helped us identify any deficiencies such as a lack of resources (equipment, trained personnel, supplies), and proactively employ safeguards. With the assistance of the security team, we will continue to monitor and evaluate our plans, promote safety awareness, and demonstrate our commitment to create a safe environment for residents and employees.

Rebranding for the Future

When a brand is modernized, distinct, and aligned with the personal values of future residents, it creates a powerful competitive advantage. In fact, according to the Hanover Research group, 75% of companies have undergone a rebrand since 2020. Marketing materials, stationary, websites, and transportation vehicles reflected the new branding elements.

Today, with the expansion of new retirement communities in the greater Phoenix and Scottsdale area, a strong Westminster Village brand and user-friendly website is more important than ever. Our rebranding initiative in 2022 was critical to attracting new residents to our community and has positioned our treasured home to thrive well into the future.

Endowment Fund

We believe when residents choose Westminster Village, their decision should last their lifetime. That’s why the “Home for Life” resident assistance program was created. It continues to provide the quality care, meals, transportation, and housing residents need in the event their personal finances should diminish through no fault of their own.

2022 Donations by Source

With our continued focus on acquiring additional donations outside our Westminster Village community, we were pleased that this year for the first time 49% of our total donations were received from our residents’ families, staff, and outside vendors with another 51% generously received from our residents. We want to express our sincere appreciation for all those who continue to support our programs and service through their generous donations.

Delivering a great resident experience is an integral part of any successful senior living community. One of the ways we do that at Westminster Village is by cultivating, enhancing, and reinvesting in the shared living spaces throughout our picturesque community.

Landscapes for Living

We continue to look for opportunities to employ hardscaping principles in select areas of our campus to promote water conservation while maintaining the ambiance of resort living. The addition of the patio area outside the Northeast (J1) entrance door not only saved water and reduced landscaping costs, but it also provided another lovely outside meeting area for residents to gather and enjoy our natural surroundings. The curbing added to the southside of campus also reduced water usage in the area while allowing our landscaping team to focus on other areas of campus.

Our Campus: Naturally Beautiful Living Sustainably

In 2022, we reduced water usage by 29% compared to 2021 and over 40% savings or 3,566,000 gallons saved versus 2020.

Seeing the Light

The new lighting on the second floor paired with the freshly painted walls improved the ambiance for our residents in 2022 and provided a new brightness and energy to the space. Switching to LED lights also contributed to a 4.4% drop in electricity use compared to the previous year. A portion of the capital expense of the 1,200 LED lights on the first floor and 1,256 LED lights on the second floor is offset by a rebate from APS.

Delightful Dining

Ocotillo and Sackton Assisted Living dining rooms both benefited from chairs being refurbished and reupholstered, as well as extensive painting in both dining venues. By balancing a vibrant blue color with a neutral palette in these areas, we created a pleasing environment for our residents to join with friends and neighbors for meals and socializing.

Financial: Building a Strong Foundation for a Secure Future

2022 saw the largest annual inflation rate since the early 1980’s; before Westminster Village even existed! It was truly new territory. Additionally, the Consumer Price Index for the cost of medical care was one of the highest in over a decade and the overall CPI for all items was up 6.4%! Despite these increasing costs, through careful planning and well-thought-out programming adjustments, we were able to contain our cash-based costs.

Although investment values were down across fixed income and equities markets alike, thanks to the professional expertise of Westminster Village’s investment managers, carefully selected by our Investment and Finance committees of the Board of Directors, our long-term investment portfolio outperformed market benchmarks by an astounding 3% and provided an increase in dividend and interest income.

Westminster Village finished 2022 in a strong cash position, ending the year ahead of 2021 by 8% at just over $18,000,000 in cash and investments. Of these dollars, 70% is invested or placed into savings, while 30% is dedicated to operations, which puts us in a good position in both the short- and longterm. Although a mid-year monthly fee increase was implemented, we were able to keep our increase comparatively less than others within our industry while still having the ability to offer competitive wages in what has become a tight labor market with unemployment at 3.5%. The wages not only helped us recruit top candidates where needed to fill our openings, but to retain our wonderful employees and the level of care they provide. The monthly fee structure now in place has been showing the desired results and will be key in insuring financial health and sustainability for the future.

Thanks to the work of our staff and administration, in close collaboration with the Board of Directors, and the understanding and cooperation of all our residents, Westminster Village was able to meet the challenges brought about by these unprecedented economic conditions.

2022 - 2025 Revenue and Expense Projections

($3,500,000) ($7,000,000) ($10,500,000)

2013 - 2022 Fund Balance

Expected 6%, 5%, 3% Inflation Projected Revenue of 4% Each Year Projected Revenue with no 2022 Midyear and only 3% Each Year ($14,000,000)

2013 - 2022 Entrance Fees

*2022 is from non audited financials Entrance Fees Collected (cash)

2013-2022 Year End Cash and Investments

*2022 is from non audited financials

Board President Don Kredel Outlines

Goals for 2023

Conduct Town Hall meetings with residents and provide mid-year and end-of-year management reports to residents

Expand on-line presence of our brand

Expand Board training for financial statements, budgeting, governance and master planning

Initiate water and power conservation plans. This is a 2-3 year goal which includes: the Secret Garden, all outdoor watering, hardscaping around the campus and reducing electricity demands.

Continue and expand community outreach through Rotary, Habitat for Humanity, St. Mary’s Food Bank, News outlets and others.

Complete Weyrich remodel and license change for Phase 1 and plan for the completion of Phase 2 in 2024.

Renovate public spaces including: first floor refresh, Ocotillo flooring, Garden Cafe, lobby, and public restrooms

Obtain $8 million in unit sales from Life Contracts.

Build Reserves with Net Income over Expenses targeted at 3%