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• Plaza Redevelopment Project, a 155-acre project area that was merged in 2000, largely comprised of commercial and residential properties in the downtown area of the City; and • Alameda County-City of San Leandro Redevelopment Project Area, (referred to herein as the "Joint Project Area") described herein. Agency Administration The Agency adapts an appropriated budget annually which is approved by the City Council. A portion of salaries and benefits of certain City staff members who perform services in support of Agency redevelopment activities are budgeted and paid for by the Agency. The Agency funds administrative costs out of advances made by the City for such purpose and repays the City advances out of available tax increment revenues. The City Manager, who is also the Executive Director of the Agency, is appointed by the City Council to administer the City's staff and generally implement policies established by the City Council. The Redevelopment Law requires redevelopment agencies to have an independent financial audit conducted each year. The financial audit is also required to include an opinion of the Agency's compliance with laws, regulations and administrative requirements governing activities of the Agency. Caporicci 8~ Larson, LLP, Oakland, California, audited the financial statements of the Agency for the fiscal year ended June 30, 2008. The firm's examination was made in accordance with generally accepted auditing standards. The City and the Agency follow fund accounting principles reflecting the modified accrual basis of accounting in which revenue is recognized when earned or otherwise becomes available, and expenditures are recognized when incurred. The firm reported after their examination that they noted no instances of noncompliance for the fiscal year ended June 30, 2008. See "APPENDIX A - Audited Financial Statements of the Agency for Fiscal Year Ended June 30, 2008." The Agency has not requested nor did the Agency obtain permission from Caporicci, Cropper 8 Larson, LLP to include the audited financial statements as an appendix to this Official Statement. Accordingly, Caporicci, Cropper & Larson, LLP has not performed any post- audit review of the financial condition or operations of the Agency. In connection with the issuance of the 2010 Bonds, the Agency has engaged Urban Analytics, LLC, San Francisco, California (the "Fiscal Consultant") to prepare a Fiscal Consultant Report dated 2009. See "APPENDIX B -Fiscal Consultant Report". The Alameda County -City of San Leandro Project Area The Joint Project Area consists of approximately 1,700 acres. The Redevelopment Plan for the Joint Project Area was originally adopted by the San Leandro City Council on July 12, 1993 by Ordinance No. 93-012. It had been amended five times and a sixth amendment (the "Sixth Amendment") was submitted to the City Council on November 19, 2001, as described in the following paragraph. The Joint Project Area is a "joint" area due to the inclusion of land in both unincorporated Alameda County and the City. Accordingly, the Redevelopment Plan provides that tax increment revenues generated from the Joint Project Area are split between the City and the County of Alameda by a formula. The percentage payable to each varies over time. See "THE AGENCY AND THE PROJECT AREAS -Agency Tax Sharing Obligations - County Project Area Agreement." The Housing Tax Revenues pledged for payment of the 2010 Bonds are only related to the portion of the tax increment revenues allocated to the Agency. -16-