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TABLE 10 REDEVELOPMENT AGENCY OF THE CITY OF SAN LEANDRO Debt Service Levies Applied to Project Area [[Project Areas??]] Fiscal Year Secured LeW Unsecured Le 2003-04 0.0057% 0.0065% 2004-05 0.0057 0.0057 2005-06 0.0057 0.0057 2006-07 0.0085 0.0057 2007-08 0.0080 0.0085 2008-09 0.0100 0.0080 2009-10 0.0100 Source: Alameda County Controller, Urban Analytics Appeals of Assessed Values Assessment appeals filed by property owners in the Joint Project Area and granted by the County Assessor could adversely impact the amount of Housing Tax Revenues available to pay debt service on the 2010 Bonds. See "RISK FACTORS" herein. Proposition 8 Appeals. Most of the appeals that might be filed in the Project Areas would be based on Section 51 of the Revenue and Taxation Code, which requires that for each lien date the value of real property shall be the lesser of its base year value annually adjusted by the inflation factor pursuant to Article XIIIA of the State Constitution or its full cash value, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property or other factors causing a decline in value. Pursuant to California law, property owners may apply for a reduction of their property tax assessment by filing a written application, in form prescribed by the State Board of Equalization, with the appropriate county board of equalization or assessment appeals board. In most cases, the appeal is filed because the applicant believes that present market conditions (such as residential home prices) cause the property to be worth less than its current assessed value. These market-driven appeals are known as Proposition 8 appeals. Any reduction in the assessment ultimately granted as a Proposition 8 appeal applies to the year for which application is made and during which the written application was filed. These reductions are often temporary and are adjusted back to their original values when market conditions improve. Once the property has regained its prior value, adjusted for inflation, it once again is subject to the annual inflationary factor growth rate allowed under Article XIIIA. See also "LIMITATIONS ON HOUSING TAX REVENUES -Property Tax Limitations: Article XIIIA of the California Constitution." Base YearAppea/s. A second type of assessment appeal is called a Base Year appeal, where the property owners challenge the original (basis) value of their property. Appeals for reduction in the "base year" value of an assessment, if successful, reduce the assessment for the year in which the appeal is taken and prospectively thereafter. The base year is determined by the completion date of new construction or the date of change of ownership. Any base year appeal must be made within four years of the change of ownership or new construction date. It has been the practice of the County of Alameda not to deduct current appeal refunds from redevelopment agency tax increment; these refunds are instead apportioned to other taxing entities using the normal apportionment mechanism. -35-