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Agreement No. D07-159 will be made from the County Road Fund for expenditures upon City streets, bridges and culverts in cities within the County. G. The County's City Aid Program (CAP) provides the guidelines for CAP, and is incorporated by reference and made a part of this Agreement. SECTION I IT IS MUTUALLY UNDERSTOOD BY THE PARTIES THAT: County shall: A. Distribute city aid allocation(s) per requirements of this agreement, the CAP, and Exhibit B. CAP allocations to cities shall be based on each city's population as of January 2007 information published by Demographic Research Unit of the California Department of Finance. B. Distribute city aid allocation(s) to cities, on a first come. first serve basis, after receiving invoice along with proof of award documentation from the City for its project(s). Each City project will require invoice and proof of award documentation. The allocation will be based on City's invoice amount, which can include design, construction and construction administration costs. County will not begin disbursing allocations until County has received its first Prop. 42 allocation from the State for fiscal year 08/09. After County has received its first Prop. 42 allocation, County will disburse an allocation to the City upon receipt of award documents. County CAP allocations are entirely subject to Prop. 42 allocations to County from the State including any delays or changes in State law, rules, regulations, and guidelines. C. .Coordinate with Cities on CAP projects. County's Director of Public Works or designee can authorize the substitution of CAP project(s) listed on'Exhibit A to maximize full expenditure of the City's CAP allocation(s). The City must make this request in writing, and the proposed new project(s) shall be eligible for Prop. 42 funds and shall not exceed the Board approved City CAP allocation(s). D. Make every effort to expend any CAP funds returned to the County by the City if City returns funds in a timely manner. However, funds cannot be expended by the County; they shall be returned to the State. E. Review Annual CAP expenditure certification submitted by City (City's submittal will be no later than August 31 of each year). This certification is a list of completed projects and a statement that each project meets Prop. 42 requirements and is in compliance with the purposes of CAP (See CAP for sample of certification). City is responsible for ensuring that all projects meet CAP and Prop. 42 eligibility requirements and have expended such fiends in the appropriate fiscal year. F. Conduct a City expenditure assessment each year to verify if City is expending its CAP funds in the timeframe contemplated under this Agreement. 2~~ e2~Of7