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REDEVELOPMENT AGENCY OF SAN LEANDRO <br />NOTES TO THE FINANCIAL STATEMENTS <br />FOR THE YEAR ENDED JUNE 30, 2007 <br />9. EXCESS SURPLUS REQUIREMENTS <br />As part of AB 1290, effective January 1, 1995, the Agency is required to report any "excess surplus" to the <br />Federal Department of Housing and Community Development. An excess surplus exists for a fiscal year if <br />the unencumbered balance at year-end in the Agency's Low and Moderate Income Housing Fund exceeds <br />the greater of $1 million or the aggregate amount of tax increment revenue deposited into this fund during <br />the preceding four fiscal years. If any excess surplus is not spent or encumbered within three years, it must <br />be transferred to the County's housing authority. The Agency did not have any excess surplus housing <br />funds for the fiscal year ended June 30, 2007, based upon calculations performed by the Agency's <br />management. <br />10. JO1NT PROJECT AREA AGREEMENT <br />Effective July 2001, the Alameda County Redevelopment Agency took over the development and <br />management responsibility of their portion of the Joint Project Area. The Agency's basic financial <br />statements does not reflect the gross tax increment payments made to the County for their portion of the <br />Joint Project Area, pursuant to the agreement between the Agency and the County. The County's share of <br />the Joint Project Area tax increment is disbursed to them by the City. The County accounts for the gross tax <br />increment payments and associated expenses in its basic fmancial statements that are audited by its <br />independent auditors in conformance with state requirements. Since administrative responsibility lies with <br />the City, the City produces one comprehensive basic financial statement and State Controller's Report for <br />the Joint Project Area. The County's basic fmancial statements and other related reports for its area are <br />available at the County's Office for further review by the public upon notice. <br />11. COIVIMITMENT5 AND CONTINGENCIES <br />Litigation <br />The Agency is involved in various claims and litigation resulting from its normal operations. The ultimate <br />outcome of these matters is not presently determinable. In the Agency managements' opinion, these <br />matters will not have a significant adverse effect of the Agency's financial position. <br />32 <br />