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section 473.25 {b ), in a participating Municipality. Grant funds must be used for costs directly associated with the specific proposed project activities and shall not be used for "soft costs" such as: administrative overhead; travel expenses; legal fees; insurance; bonds; permits, licenses or authorization fees, costs associated, with preparing other grant proposals; operating expenses; planning costs- including comprehensive pl a nn ing costs; and prorated lease and salary costs. Grant funds may not be Used for costs of project activities that occurred prior to the grant award. Grant funds also shall not be used by the Grantee or others to supplant or replace grant or loan fi.rnd -s obtained for the project from other sources. The Council sh -all bear no responsibility for cost overruns which may be incurred by the Grantee or others in the implementation or performance of the p ro J ect activities. The Grantee agrees to comply with any "business subsidy`' requirements of Minnesota Statutes sections 11 6,1.993) to 11 6,1.995 that apply to the Grantee's expenditures or uses of the grant funds. 2.03 Project Changes. The grantee must promptly inform- the Council in writing of any significant changes to the .project for which the. grant f aids were awarded, as well as any potential changes to the grant- funded activities described in Attachment A. Failure to inform the Council of any significant changes to the Project or significant changes to grant - funded components of the project, and use of grant funds for ineligible or unauthorized purposes, will jeopardize the Grantee "s eligibility for future L A awards. Grant funds wilt not be disbursed prior to Council approval of significant changes to either the Project or grant- funded activities described in Attachment A. 2.04 Budget variance. A variance of twenty percent 20 %) In the budget amounts for grant-funded activities identified in Attachment A shall be considered acceptable without Council approval, provided no budget amount for any individual grant- funded activity may be increased or decreased by more than twenty percent (20 %) from the budget amount identified in- Attachment A. The Grantee must inform the Council of ` any budget variances. Budget variances for any individual grant - funded activity identified in Attaclunent A exceeding twenty percent (20%) will require approval of the governing body of the Metropolitan Council. Notwithstanding the aggregate or net effect of any variances, the Council's obl i- gati.on to provide grant funds under this Agreement shall not exceed the Grant Amount identified at .page- 1 of this Agreement. 2.05 Eminent Domain Restrictions. On January 25, 2006 lie Council adopted a policy that restricted the use of L A grant funds on projects when eminent domain authority was used to acquire private property for `economic development" purposes in connection with the projects. The Council's policy defined the terra "economic development" for L. CA program purposes and covers the time period from January 25, 2006 to June 28, 2006. on June 28, 2006 the Council adopted a revised eminent domain policy that is consistent with the statutory definitions and restrictions contained in Minnesota Statutes chapter 117 as amended (effective May 20, 200 6) during the 2006 legislative session. The revised, policy applies to L A grant awards and grant agreements made on or after .tune 28, 2006. The Council's January 25, 2006 and ,Tune 28, 2006 eminent domain policies are available online at: http:llwww. metrocound.org/ services /1Ncomr /EminentDomainPolicy. htrn. (a) If a notice of petition was served between January 25 , 2006 and May 20, 2006 in connection with the Grantee's Project (or any component of the Project) for which grant funds were awarded, the grant funds may not be used to fund or support the Project un -less the Project: (1) would have been eligible under the Council's January 2.5, 2006 policy; or ( ) qualifies -for an exemption Pa9c 3 of 9 Page Oqo"