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Mr. Timothy K. Scherkenbach March 20, 1990 Page Four 5. Summery of Costs The following is the summary of all of the costs discussed above which have not been previously approved by the MPCA for which the City is now requesting approval. The City believes these costs are eligible, reasonable, necessary, allocable to the project, and permitted by the appropriate Federal cost principles because all of the summarized costs were necessary to comply with the Uniform Relocation Assistance and Real Property Acquisition Policies Act, as the City is required to do according to the terms of the Grant regulations. Land $36,853.70 Appraisal 3,150.00 Engineering 3,593.16 Legal 7,317.91 Total $ 50,914.77 B. Discussion, justification, and verification of those costs needing a budget period extension and those costs obligated under the existing budget period. The four costs previously identified (land, appraisals, engineering, and legal) constitute all of the additional costs for which the city is seeking grant funding. We will discuss the obligation of those costs and the need for a budget period extension individually. Land Cost 40 CFR 30.200 defines "budget period" as the length of time EPA specifies in an assistance agreement during which the recipient may expend or obligate (emphasis added) Federal funds. From the preceding paragraphs, we have already established that land must be acquired in accordance with the Federal Land Acquisition Act which requires conformance with State Law. Your attention is directed once again to MS 117.195, INTEREST, which requires payment of interest on the final determination of just compensation from the date of ossession (emphasis added). By requiring interest from the date of possession, State Law recognizes that the cost of the land is obligated at the time of possession even though the amount will not be determined until the full process allowed by law has been completed. Verification of that fact is found in the "Amended Final Certification in Condemnation". It is the City's position that the Federal funds were likewise obligated on April 13, 1987, but the final cost of the land has just been finally determined. From the preceding paragraphs, it is clear to the City that the land costs were obligated during the budget period and therefore, do not need a budget period extension.