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 (Continued) Year Ended June 30, 2011 (Unaudited) FUND FINANCIAL ANALYSIS The Agency's governmental funds reported combined ending fund balances of $124.69 million at year end. The Agency's combined fund balances increased by $19.62 million, mainly due to the decrease in the SERAF payment and bond proceeds from refunding bonds. Listed below are significant variances in revenues and expenditures between fiscal year 2009 -10 and 2010 -11. • The Merged Project Area Debt Service Fund revenues decreased slightly by $0.86 million (1.55 %) mainly due to decrease in tax increment revenues as a result of the economic recession. As a result of the retirement of the 1989 Tax Allocation Refunding Bonds, expenditures increased by $55.71 million (167.29 %). • The Merged Project Area Capital Projects Fund revenues decreased by $1.76 million (74.91%) from decreased rental income and expense reimbursements. The Merged Capital Projects Fund project and administrative costs decreased overall by $0.19 million (3.78 %), which is partially due to the land purchase for future development, and an Agency obligation that was previously budgeted as a Merged Capital Proj ect obligation was paid directly from the Debt Service Fund. Pass - through payments decreased by $14.2 million (79.4 %) due to the reduced payment to SERAF in 2010 -11. • The Low and Moderate Income Housing Fund transfers in from the Debt Service Fund decreased by $0.47 million (3.3 %) due to decreased property tax revenues. The Low and Moderate Income Housing Fund expenditures decreased by $3.92 million (44.4 %) primarily due to the completion of the Wilshire and Minnie (144 units) and Townsend and Raitt (5 apartment buildings) development projects in the prior fiscal year. Community Redevelopment Highlights • Santa Ana Auto Mall: The Auto Mall currently has 6 dealerships including BMW, Mini Cooper (Mini), Honda, Volkswagen, Audi, and Volvo. The Penske Group recently expanded its VW /Audi operations to the prior Saturn site, and a further expansion onto the former Saab site is in the planning stages. Penske is also nearing completion of its new Audi showroom at the former Kia site. The Audi plans feature building renovation, along with a 10,000 sq. ft. expansion. Plans are also in the works for the new Mini showroom at the former Jaguar site, across from BMW. The building will be renovated inside and out to conform to Mini and City requirements for the Auto Mall. Additionally, Honda just received Planning Commission's approval to proceed with its 5,000 sq. ft. showroom expansion and overall facility enhancement to give it a more updated appearance consistent with Honda standards. • South Main Facade Improvement Rebate Program: In 2000, the Redevelopment Agency reinstituted the Facade Improvement Rebate Program for South Main Street between First and Warner. The purpose of the program is to improve the exterior appearance of commercial buildings within a specific area. The program provides financial assistance in the form of a cash rebate based upon level of private contribution, subject to pre- approval by a committee made up of City staff and members of the South Main Merchants Association. In 2002, the program was 7