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17 5. All grant funds accepted by the CITY from the COUNTY pursuant to this Agreement shall be, used to operate its Recycling Program, including capital and operating expenses related thereto, in the year granted. The CITY shall not retain any grant funds in excess of actual Recycling Program expenses. The CITY may not charge its residents through property tax, utility fees, or any other method for that portion of the costs of its Recycling Program that is funded by COUNTY grant funds. The CITY shall establish a separate accounting mechanism, such as a project number, activity number, cost center, or fund that will separate recycling and waste reduction revenues and expenditures from all other municipal activities, including solid waste and yard waste activities. 8. Recycling and waste reduction activities, revenues, and expenditures are subject to audit by the COUNTY. If the CITY does not contract for curbside services, the CITY will receive grant funds provided that at least ninety percent (901/o) of the grant funds are credited back to residents and the CITY meets all minimum program requirements. The additional ten percent (10%) of grant funds may be used for CITY administrative and promotional expenses. METHOD OF PAYMENT a. The COUNTY will distribute grant funds annually only to the extent the COUNTY has received SCORE funds from the State of Minnesota. SCORE funds are based on revenue received by the State of Minnesota from a sales tax on garbage collection and disposal fees and are subject to change based on revenue received and allocated by the State. The CITY will receive gram funds per the formula below: # of Households Serviced Curbside by CITY Total # of Households Serviced Curbside in COUNTY Total SCORE Revenue X Received by COUNTY from State of Minnesota Grant Funds = Distributed to CITY b. Under no circumstances will the COUNTY's distribution of grant funds exceed the CITY's proportion of SCORE fund revenues received by the COUNTY.