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5 <br />The County and Towns agree that their annual funding of CHT will gradually grow and <br />annually be adjusted, starting in fiscal 2015 -16, from the fiscal 2014 -15 levels (Orange <br />County $149,000, Town of Chapel Hill $200,000, Town of Carrboro $35,000 and Town of <br />Hillsborough $2,500) to allow CHT to maintain a minimum required operating cash balance. <br />CHT's minimum required operating cash balance will be the sum of the industry - standard six <br />months of operating expenses ($350,000 as of July 1, 2014) plus special project reserves <br />necessary for CHT to safeguard its portfolio of homes ($550,000 as of July 1, 2014). Each <br />year, CHT will re- determine these amounts and include them in its budget proposal. <br />Funding payments from County and Towns to CHT will be made quarter - annually in equal <br />amounts on or about July 1, October 1, January 1 and April 1. <br />2. CHT Staff Compensation <br />County and Towns agree that the CHT budget will include CHT staff compensation based <br />upon compensation paid by County and Town. <br />3. Funding Formula <br />Although it is recognized that each local government will vote independently to approve this <br />Agreement, it is expected that each jurisdiction will approve the same funding formula. <br />Furthermore it is agreed that funding will be determined as follows: <br />a. The sharing of the County and Towns portion of the annual funding will be <br />determined by a two tier formula. First, the County will provide 33% of the total <br />and the Towns will provide 67% of the total. Second, the Towns will share their <br />67% portion based on the ratio of CHT homes within each town to the total number <br />of CHT homes. The number of homes will be determined as of January 1 prior to <br />each fiscal year. <br />b. For example, if CHT's budget is $800,000 and the number of homes in the CHT <br />portfolio on the prior January 1St is 250, with 200 of those homes in Chapel Hill, 50 <br />of those homes in Carrboro and none of those homes in Hillsborough, and CHT <br />budgets providing $200,000 of revenue itself, Orange County will be required to <br />pay 33% of $600,000 ($800,000 less $200,000), or $198,000, Chapel Hill will be <br />required to pay 67% of $600,000 multiplied by 200/250, or $321,600; Carrboro <br />will be required to pay 67% of $600,000 multiplied by 50/250, or $80,400 and <br />Hillsborough will be required to pay 67% of $600,000 multiplied by 0/250, or $0. <br />4. Portfolio Management <br />a. The Towns and the County agree to consult with the CHT staff when new <br />developments are proposed that would include homes that would become a part of <br />the CHT portfolio. CHT staff will provide input on any affordable housing <br />proposals or options if requested by the Towns or County. <br />