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2. Any costs incurred by the City prior to authorization of the Federal Funds, will <br />not be eligible for federal participation. <br />3. Eligible cost and expense, if approved, may consist of the following: <br />a) The direct labor charges for City employees for the time that said employees <br />are performing work pursuant to this agreement. Said labor charges may <br />include the prorata share of "labor additives" applicable to said labor charges. <br />Costs to the City of "labor additives" consisting of holiday pay, vacation, sick <br />leave, retirement, pension, unemployment taxes, compensation and liability <br />insurance, lost time charges and similar costs incidental to labor employment <br />will be reimbursed only when supported by adequate records. <br />b) The applicable equipment rental charges for City owned equipment used by <br />the City and mileage charges for employee owned vehicles used by the City <br />on work performed pursuant to this agreement, at rates reflective of the City <br />actual cost. <br />c) Expenditures for materials, supplies, mechanical data processing and <br />equipment rental, limited to the actual expenditures for the purposes of this <br />agreement. <br />d) The cost incurred by the City to employ outside forces to perform any or all of <br />the work pursuant to this agreement is subject to the provisions of section I.D. <br />SUBLETTING. <br />e) Purchase price, appraisal fees incurred by the City, appraisal fees incurred by <br />the property owner (up to a maximum of $1,500 for single family and two- <br />family residential property and minimum damages acquisitions and $5,000 for <br />other types of property), condemnation costs, title work, title insurance, <br />recording fees, and closing costs. <br />f) A credit will be required for any building sales or rental income. <br />4. Expenditures for general administration, supervision, maintenance and other <br />overhead or incidental expenses of the City are not eligible for federal <br />participation. <br />5. Acceptability of costs under this agreement will be determined in accordance with <br />the cost principles and procedures set forth in the applicable Federal Acquisition <br />Regulations, Contract Cost Principals and Procedures, 48 Code of Federal <br />Regulations (CFR) 31 which is hereby incorporated by reference and made a <br />part of this agreement. <br />6. For costs expected to exceed $ 1,348,494, the City must request the preparation <br />and execution of a supplement to this agreement, prior to incurring such costs. <br />C. STAFFING. <br />1. The City will designate a publicly employed registered engineer or land surveyor, <br />(“Project Engineer"), to be in responsible charge of the Project and to supervise <br />and direct the work performed under any contract let for the Project. If City elects <br />Agreement no. 03474 <br />-2- <br /> <br />