19D - EXHIBIT FY 10-11 RDA Annual Report

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COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA Notes to the Basic Financial Statements (Continued) Year Ended June 30, 2011 Capital Projects Funds The Merged Project Area Capital Projects Fund is used to account for the capital project expenditures and related administrative costs of the Merged Project Area. The Low and Moderate Income Housing Capital Projects Fund is used to account for the capital project expenditures, residential rehabilitation loans, and related administrative costs of the housing activities within the Agency. Revenues are generated from the transfer of housing set aside funds from the Merged Project Area Debt Service Fund and the repayment of housing rehabilitation loans. (d) Cash and Investments Investments are reported in the accompanying financial statements at fair value. Changes in fair value that occur during the fiscal year are recognized as investment income reported for that fiscal year. Investment income includes interest earnings, changes in fair value, and any gains or losses realized upon the liquidation or sale of investments. The City pools cash and investments of all funds and component units, except for assets held by fiscal agents. The Agency's share in this pool is displayed in the accompanying financial statements as cash and investments. Investment income earned by the pooled investments is allocated monthly to the various funds and component units based upon daily average cash and investment balances. The Agency's investments held by fiscal agents are pledged for repayment or as security for certain long -term debt issuances. The California Government Code provides that these monies, in the absence of specific statutory provisions governing the issuance of bonds, may be invested in accordance with the ordinance, resolutions or indentures specifying the types of investments made by its trustee or fiscal agents. (e) Receivables and Payables Intra- agency current receivables and payables are classified as amounts "due from" and "due to" other funds. The Agency considers intra- agency long -term loans to be advances. Interest on such loans is recorded only when due. This treatment is in accordance with generally accepted accounting principles and is consistently applied. (fl Property Taxes Secured property taxes attach as an enforceable lien on property as of January 1. Taxes are levied in September and are due in two installments on November 1 and February 1 and are considered delinquent after December 10 and April 10, respectively. The County of Orange, California, bills and collects the property taxes and remits them to the Agency in installments during the year. Property tax increments are recognized in the period for which they are levied and to the extent that they are available within 60 days. 24