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ARTICLE VII. FUNDING <br /> <br />Section 1: Initial Funding. <br /> <br /> It is understood by the parties that the activities and duties of the Authority are to <br />be funded primarily by grant monies from the United States Government, the State of <br />Minnesota or any other association or agency. Nevertheless, the member counties <br />and regional railroad authorities agree to contribute funding, if necessary, for the start- <br />up administrative expenses of the Board (to the extent not covered by grant funds). <br /> <br /> The member counties and regional railroad authorities will establish an initial <br />budget and agree to the allocation of any necessary initial contributions. <br /> <br /> Each member county and regional railroad authority shall pay its appropriate <br />initial contribution to the county acting as fiscal agent of the Authority within 30 days of <br />execution of this Agreement. <br /> <br />Section 2: On-Going Administrative Expenses. <br /> <br />A. By July I of each year, the Authority shall adopt an annual administrative budget <br />for the following calendar year, and shall determine the amount of contribution, if any, <br />by each member. The budget and the resulting assessments shall be approved by a <br />two-thirds majority of the Authority. Any excess funds in the administrative budget <br />remaining at the end of the fiscal year shall be carried forward in such manner as to <br />reduce proportionately each member's contribution for the following fiscal year. <br /> <br />If the Authority incurs any expenses as a result of a claim for damages, the <br />expenses and any damages paid shall be assessed against each member in the <br />same proportion as the assessments described in paragraph A above, as <br />applicable. <br /> <br />9 <br /> <br /> <br />