EL CERRITO REDEVELOPMENT AGENCY EL CERRITO REDEVELOPMENT PROJECT AREA TAX ALLOCATION REFUNDING BONDS

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1 EL CERRITO REDEVELOPMENT AGENCY EL CERRITO REDEVELOPMENT PROJECT AREA TAX ALLOCATION REFUNDING BONDS $7,450, SERIES A Dated: December 17, 1997 $2,630, SERIES B Dated: April 2, 1998 Contra Costa County, California Base CUSIP : ANNUAL CONTINUING DISCLOSURE INFORMATION STATEMENT Dated March 20, 2012 Also available at: Copyright, American Banker's Association. CUSIP data is provided by Standard and Poor's, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP service. The issuer takes no responsibility for the accuracy of such number.

2 LIST OF PARTICIPANTS REDEVELOPMENT AGENCY OF THE CITY OF EL CERRITO Scott Hanin City Manager/Executive Director San Pablo Avenue El Cerrito, California (510) Mary Dodge Administrative Services Director/ City Treasurer San Pablo Avenue El Cerrito, California (510) DISCLOSURE CONSULTANT & DISSEMINATION AGENT Willdan Financial Services * Temecula, California (951) UNDERWRITER Sutro & Co. Incorporated. BOND COUNSEL Jones Hall, A Professional Law Corporation San Francisco, California TRUSTEE Jim Myers Union Bank, N.A 350 California Street, 11 th Floor San Francisco, California (415) * In its role as Disclosure Consultant and Dissemination Agent, Willdan Financial Services has not passed upon the accuracy, completeness or fairness of the statements contained herein.

3 I. INTRODUCTION Pursuant to an Official Statement dated December 3, 1997, the El Cerrito Redevelopment Agency (the Agency ) issued $7,450,000 (El Cerrito Redevelopment Project Area) Tax Allocation Refunding Bonds, 1997 Series A (the Series A Bonds ) and $2,630,000 (El Cerrito Redevelopment Project Area) Tax Allocation Refunding Bonds, 1998 Series B (the Series B Bonds and together with the Series A Bonds, the Bonds ). The Series A Bonds were issued to refund the El Cerrito Redevelopment Project Area Refunding Tax Allocation Bonds, Series 1991 A. The Series B Bonds were issued to advance refund the El Cerrito Redevelopment Project Area Bonds, Series 1990 A. The Bonds are on parity with the Agency s $10,315,000 (El Cerrito Redevelopment Project Area) Tax Allocation Bonds, Series 2004 A and $6,510,000 (El Cerrito Redevelopment Project Area) Tax Allocation Bonds, Series 2004 B. The City of El Cerrito, (the City ) is located in Contra Costa County (the County ), approximately 17 miles northeast of the City of San Francisco and about 12 miles north of Oakland. The City, which comprises approximately 3.9 square miles, forms part of the highly urbanized area along the eastern shore of the San Francisco Bay together with the cities of Richmond, Albany and Berkeley. The redevelopment plan for the El Cerrito Redevelopment Project Area (the Project Area ) encompasses approximately 396 acres. The Project Area represents the traditional Central Business District and other commercial and industrial activity centers and areas of the community. The Bonds are limited obligations of the Agency and are secured by a pledge of Tax Revenues, as defined within the Official Statement. The Bonds are not a debt of the City, the State of California, or any of its political subdivisions and neither the City, the State of California, nor any of its political subdivisions is liable. The Bonds do not constitute indebtedness within the meaning of any constitutional or statutory debt limit or restriction. This Annual Continuing Disclosure Information Statement is being provided pursuant to a covenant made by the Agency for the benefit of the holders of the Bonds and includes the information specified in a Continuing Disclosure Certificate. For further information and a more complete description of the Agency, the City, and the Bonds, reference is made to the Official Statement. The information set forth herein has been furnished by the Agency and by sources, which are believed to be accurate and reliable but is not guaranteed as to accuracy or completeness. Statements contained in this Annual Continuing Disclosure Information Statement that involve estimates, forecasts, or other matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. Further, the information and expressions of opinion contained herein are subject to change without notice and the delivery of this Annual Continuing Disclosure Information Statement will not, under any circumstances, create any implication that there has been no change in the affairs of the Agency or any other parties described herein. 2010/11 TAB 1997A & B City of El Cerrito 1

4 II. BOND INFORMATION A. PRINCIPAL OUTSTANDING Bonds As of January 31, 2012 Series 1997 A Bonds $3,475,000 Series1998 B Bonds $790,000 B. FUND INFORMATION Fund As of January 31, 2012 Reserve Account (1) N/A Reserve Requirement $788,254 (1) The Reserve Fund is secured through a Debt Service Reserve Surety Bond with National Public Finance Guarantee Corporation (formerly MBIA). III. FINANCIAL INFORMATION The audited financial statements for the Agency for the fiscal year ended June 30, 2011 will be separately filed with the Municipal Securities Rulemaking Board s Electronic Municipal Market Access website ( EMMA ) and are hereby incorporated by reference into this Annual Information Statement. 2010/11 TAB 1997A & B City of El Cerrito 2

5 IV. OPERATING INFORMATION A. MAJOR PROPERTY TAXPAYERS The following table sets forth a list of the major property owners within the Project Area. Property Owner Land Use 2011/12 Assessed Valuation % of Total (1) MCD-RCCA-El Cerrito LLC Shopping Center $ 85,265, % ECD Associates LLC Apartments 23,459, % Lucky (FLA) Nocal Investor LLC Shopping Center 18,750, % Civic Plaza Riley Group LLC Apartments 14,954, % Pepper Lane SE Square Loop Shopping Center 13,875, % MG Garden View Apartments LP Commercial 12,167, % FRE 496 LLC Commercial 12,043, % Preferred Bank Commercial 7,346, % Longs Drug Stores CA Inc. Shopping Center 6,838, % Triple Net Investments LLC Shopping Center 6,549, % Elliot and Alana Megdal Commercial 6,000, % JP Morgan Chase Bank NA Commercial 5,528, % Del Norte Center of El Cerrito Commercial 4,433, % Hide Oshima Industrial 4,291, % Hacienda El Cerrito Apartments Apartments 3,990, % Williams Edwards Family LP Shopping Center 3,888, % Philip M. and Judy L. Lee Shopping Center 3,644, % Albert C. and Judith Lamperti Commercial 3,228, % Ohlone Gardens LP Commercial 2,921, % C&H Development Co. Commercial 2,750, % Total $241,927, % (1) 2011/12 Local Secured Assessed Valuation: $541,902,208. Source: California Municipal Statistics, Inc. B. ASSESSED VALUATION Fiscal Year 2007/ / / / /12 Secured $555,247,686 $597,005,321 $565,316,145 $548,065,854 $541,902,208 Utility 673, ,692 0 (1) 0 (1) 0 (1) Unsecured 34,295,418 33,674,756 32,592,524 31,845,391 30,833,704 Total $589,216,796 $631,353,769 $597,908,669 $579,911,245 $572,735,912 (1) Previous railroad value shifted from local roll to State unitary utility roll. Source: California Municipal Statistics, Inc. 2010/11 TAB 1997A & B City of El Cerrito 3

6 C. TAX INCREMENT REVENUE/DEBT SERVICE COVERAGE Taxable Valuation 2006/ / / / /11 Total Assessed Valuation $541,472,999 $589,216,796 $631,353,769 $597,908,669 $579,911,245 Less: Base Year Value (92,946,392) (92,946,392) (92,946,392) (92,946,392) (92,946,392) Incremental Taxable Value $448,526,607 $496,270,404 $538,407,377 $504,962,277 $486,964,853 Gross Tax Increment Revenue (1) $4,767,837 $5,440,531 $5,848,045 $5,190,553 4,978,501 Tax Sharing (AB1290) (16,149) (976,526) (1,236,902) (802,197) (397,958) County Administration Fee (2) (34,233) (46,865) (59,169) (55,346) (52,248) Net Pledged Tax Revenues $4,017,455 $4,417,141 $4,551,974 $4,333,010 $4,528,295 (1) Source of information is the Redevelopment Agency s State Controller s report. (2) Information gathered from the Contra Costa County Auditor s office. Source: Assessed Valuation: California Municipal Statistics Inc. Fiscal Year Net Pledged Tax Revenues Total Maximum Annual Debt Service (Series A and B) (1) Debt Service Coverage 2006/07 $4,017,455 $2,296, /08 4,417,141 2,296, /09 4,551,974 2,296, /10 4,333,010 2,296, /11 4,528,295 2,296, (1) Combined Maximum Annual Debt Service (Series A and Series B) occurs in The combined $2,296,218 is comprised of Series A ($1,793,693) and Series B ($502,525). The combined is the total of the 1997 A & B Tax Allocation Bonds and the 2004 A & B Tax Allocation Bonds. D. APPEALS OF ASSESSED VALUES Taxable property values determined by the County Assessor may be subject to an appeal by the property owner. Assessment appeals are annually filed with the County Assessment Appeals Board for a hearing and resolution. At the time of filing, applicants are required to estimate an opinion of value. The resolution of an assessment appeal may result in a reduction to the Assessor s original taxable value and a tax refund to the applicant/property owner. The Agency cannot predict the outcome of the assessment appeals and, if the assessment appeals or any future appeals are successful, the extent to which Tax Revenues could be reduced. Currently, the County has addressed approved and pending assessment appeals for tax years 2008 through 2011 within the Project Area. Current outstanding assessment appeals, if granted at the same level as in the past year level, would reduce the assessed value in the Project Area by $13,102,033, or 2.3% of fiscal year 2011/12 assessed value. If the County reduces the assessed value of any parcel, there can be no assurance that the reduction will be by this amount. Also, additional appeals on property within the Project Area may be filed in the future. 2010/11 TAB 1997A & B City of El Cerrito 4

7 The following table sets forth information regarding assessment appeals that were pending with the County Assessor as of December 20, Number of Appeals Pending Assessed Value of Property Under Appeal Total Requested Assessed Value Potential Reduction in Assessed Value (1) 40 $188,490,286 $84,185,328 $13,102,033 (1) Percent is based on the actual reduced value filed since Source: Contra Costa County Assessor, as compiled by Willdan Financial Services. V. DISSOLUTION OF REDEVELOPMENT AGENCY On December 29, 2011, the California Supreme Court ruled that ABx1 26 (the Dissolution Act ) is largely constitutional and AB1x27 (the Alternative Redevelopment Program Act ) is unconstitutional. The court s decision means that all California Redevelopment Agencies including the Agency will be dissolved under the constitutional Dissolution Act, and none will have the opportunity to opt into continued existence under the unconstitutional Alternative Redevelopment Program Act. As a result, the Redevelopment Agency was dissolved on February 1, The Dissolution Act provides that the City that authorized the creation of the Redevelopment Agency, will be the successor agency to the former Redevelopment Agency. The City, acting as successor agency, will be responsible for future payments on the bonds subject to receipt of tax revenues from Contra Costa County to be distributed from the Redevelopment Property Tax Trust Fund. 2010/11 TAB 1997A & B City of El Cerrito 5

8 VI. OCCURRENCE OF LISTED EVENTS As amended, the Continuing Disclosure Covenants outline the Occurrence of Listed Events that must be reported in not more than ten (10) business days after the occurrence of the event, irrespective of any determination as to whether such event may or may not be deemed material. The City has no knowledge that any of the events listed below have occurred or have not been previously reported during the fiscal year ended June 30, Principal and interest payment delinquencies on the Bonds. 2. Unscheduled draws on debt service reserves reflecting financial difficulties. 3. Unscheduled draws on credit enhancements reflecting financial difficulties. 4. Substitution of credit or liquidity providers, or their failure to perform. 5. Adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds. 6. Defeasances. 7. Tender offers. 8. Bankruptcy, insolvency, receivership or similar proceedings pertaining to the City. 9. Ratings changes. As amended, the Continuing Disclosure Covenants outline the Occurrence of Listed Events that must be reported in not more than ten (10) business days after the occurrence of the event, if deemed material. The City has no knowledge that any of the events listed below have occurred or have not been previously reported during the fiscal year ended June 30, Mergers, consolidations, acquisitions, the sale of all or substantially all of the assets of the City or the dissolution of the City. 11. Appointment of a successor or additional Trustee or the change of the name of the Trustee or any successor or additional Trustee. 12. Non-payment related defaults. 13. Modifications to the rights of Holders. 14. Optional, contingent or unscheduled bond calls, prepayment or redemptions other than defeasances. 15. Release, substitution or sale of property securing repayment of the Bonds. 2010/11 TAB 1997A & B City of El Cerrito 6