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WEST SAN LEANDRO SHUTTLE BUSINESS IMPROVEMENT DISTRICT ANNUAL REPORT FY 2012-13 5 | Page LINKS currently has a Lifeline Cycle 2 Grant in the amount of $405,000 which has a remaining balance $197,855 (as of 11/15/12). This grant was due to expire, whether all of the grant funds were expended or not. Staff worked with MTC and received approval to extend the Lifeline grant term to December 2014 to allow full recovery and $121,661 in Lifeline Grant revenue is budgeted in 2012-13. In March 2012, the SLTMO applied for a Lifeline Cycle 3 Grant to fund LINKS operations in the amount of $336,000. The three year grant which would start in FY 2013-14 has been recommended by ACTC and is pending approval. SLTMO continues to pursue a variety of grant funding, however, grant funding is unpredictable. In addition, grant reimbursements can only be drawn as a percentage of the total expense for the reporting period. The reimbursement process creates a cash flow problem making it necessary to have a strong reserve balance at all times. Proactive measures taken to reduce costs and secure grants have helped to stabilize funding for LINKS. The loss of Redevelopment funding to fill the cash flow gap resulting from the grant reimbursement process will continue to pose a challenge for LINKS. With the instability of grant funding and the loss of Redevelopment funds it is necessary to increase revenue by increasing the BID rates. Per the approved Ordinance, the BID may be increased annually by the Consumer Price Index (CPI). This Fiscal Year’s CPI factor is 2.6 percent which would result in the BID Base Rate increasing from $25.35 to 26.01, and the BID Rate Per Employee increasing from $11.03 to $11.32. Businesses with five or fewer employees, landlords, and non-profits would remain exempt from the BID. The LINKS budget for FY 2012-13 and anticipated budget for FYs 2013-14 and 2014-15 can be found in Exhibit C. The proposed FY 2012-13 expenditures are approximately $270,000. The following is a summary of the items that impact future budgets. BID revenue is projected at $134,000 in FY 2012-13 with the recommended 2.6 percent CPI increase in the BID rates. The loss of Redevelopment funding to fill the cash flow gap resulting from the grant reimbursement process will pose a challenge for LINKS in FY 2012-13 and future years. Staff received approval from MTC to extend the Lifeline Cycle 2 Grant term to December 2014 allowing full recovery of the grant. LINKS applied for a Lifeline Cycle 3 Grant in the amount of $336,000. The three year grant which would start in FY 2013-14 has been recommended by ACTC and is pending approval. The SLTMO will continue to pursue additional grant funding for FY 2012-13 and beyond, such as the Transportation Fund for Clean Air (TFCA) grant funding