I've noticed a lot of people having this problem so I assume it is a bug in the software. I'm not very savvy with python or model builder but I was able to create a workaround with the following model...
Basically, my report would run on 17 or less records (with images) so I created this crazy loop. It creates three pdf's and then appends them all into one pdf and deletes the old ones. The parameter is a year entered by the user to use in the expression for the first select in each line, the second select in each line creates a subset selection using a facility ID (wildcard) then a report is generated using an export report script. I know it's not pretty but it works and the result is pretty nice. I put this on here for those who might also want a work around.