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A ": ,two ,�: a ASSOCI 347:8 Suskir Avev. Suite 215 c - i :' s's§d6t't� ' e=: i, � cue €�'e:.'P°Y$Pe'� 9 4523 INDEPENDENTT NUDITOR'S REPORT w+/l nur;_ easa'ocia#ems.corn Members of the Governing Board of the City of San Leandro Redevelopment Agency San Leandro, California We have audited the accompanying basic component unit financial statements of the governmental activities and each maior fund of the San Leandro Redevelopment Agency (Agency), a component unit of the City of San Leandro, as of and for the year ended June 30, 2011, as listed in the table of contents. These financial statements are the responsibility of the Agency's management. Our responsibility is to express an opinion on these financial. statements based on our audit. The financial statements as of June 30, 2010, were audited by other auditors whose opinion dated. December 22, 2010, were unqualified. We conducted our audit in accordance with generally accepted auditing standards in the United States of America and the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States of America. Those standards require that we plan and perform the audit to .obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining on a test basis evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the component unit financial statements referred to above present fairly in all material respects the respective financial position of the governmental activities and each major fund of the San Leandro Redevelopment Agency as of June 30, 201. 1, anal the changes in the financial position and the respective budgetary comparisons listed as part of the basic financial statements for the year then ended, iii conformity with generally accepted accounting principles in the United States of America. As disclosed in Note 12, the State of California adopted ABxl 26 on June 28, 2011, which suspends all new redevelopment activities except for limited specified activities as of that date and dissolves redevelopment agencies effective October 1, 2011. The State simultaneously adopted ABx1 27 which allows redevelopment agencies to avoid dissolution by opting into an "alternative voluntary redevelopment program" requiring specified substantial annual contributions to local schools and special districts. These conditions raise substantial doubt about the Agency's ability to continue as a going concern. However, on August 11, 2011, the Califomia Supreme Court issued a partial stay of ABxl 26 and a full stay of ABx1 27, but the partial stay did not include the section of ABxl 26 that suspends all new redevelopment activities. As a result, the accompanying financial statements have been prepared assuming that the Agency will continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. As of July 1, 2010, the Agency adopted the provision of Governmental Accounting Standards Board Statement Number 54 (GASB 54), Fund Balance Reporting and Governmental Fund Type Definitions. As discussed in Note A to the financial statements, the provisions of this statement affect the classification of fund balances reported in the financial statements. 1 Pro!essionaf G "orporaiior, 1