19D - EXHIBIT FY 10-11 RDA Annual Report

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COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA Management's Discussion and Analysis Year Ended June 30, 2011 (Unaudited) The information presented in the "Management's Discussion and Analysis" is intended to be a narrative overview of the Community Redevelopment Agency of the City of Santa Ana's (Agency) financial activities for the fiscal year which ended June 30, 2011. This information is presented in conjunction with the accompanying financial statements, footnotes, and supplementary information. The financial statements provide reporting that is similar to private sector companies by showing government -wide (i.e., company -wide) financial statements with a "Net Assets" bottom line approach. However, government agencies are mandated to account for certain resources and activities separately, thereby necessitating a fund -by -fund financial format as shown in the governmental funds statements and supplementary information. FINANCIAL HIGHLIGHTS • During the fiscal year, the Agency's governmental activities with respect to taxes and other governmental revenues exceeded expenses (change in net assets) by $26.6 million. This is an increase from $22.37 million in the prior fiscal year. The total revenues from all sources decreased $6.95 million from the prior fiscal year due in part to decreases in property tax increment revenues and program revenues. The total expenses for the fiscal year decreased by $29.28 million, primarily a result of the decrease in the payment to the State of California Supplemental Educational Revenue Augmentation Fund (SERAF). Additionally, the Agency issued the 2011 Series A Merged Project Tax Allocation Bonds for the defeasance and refinancing of the 1998 Santa Ana Financing Authority Refunding Revenue Bonds Series A, B, C and D (SAFA), and for the financing of $6.1 million in capital improvements. The SAFA bonds were an obligation of the City, the proceeds from which were used to purchase the 1989 Tax Allocation Refunding Bonds Series A, B, C and E (1989). The 1989 bonds were an obligation of the Agency, and this transaction resulted in the retirement of those bonds. • The Agency continues to use the Low and Moderate Income Housing Fund to develop properties that increase the availability of affordable housing throughout the City. Current projects underway during the 2010 -2011 fiscal year include the Santa Ana Station District, LLC for 112 rental units and 32 for -sale units; Habitat for Humanity for 17 homes; Santa Ana WBBB, LP for 51 rental units; and the Vista Del Rio project for a 41 -unit rental housing development for special needs residents. FINANCIAL STATEMENT OVERVIEW This discussion and analysis is intended to serve as an introduction to the Community Redevelopment Agency of the City of Santa Ana's basic financial statements. The Agency's basic financial statements consist of three components: 1) government -wide financial statements, (2) fund financial statements, and 3) notes to the basic financial statements. 3