1. Contingency Funds. The City will fund and manage an operating reserve. This reserve will be comprised of:
   1. a First Year Contingency Fund of not more than $380,241, which will be available to help offset budget shortfalls experienced by the Co-op between the Commencement Date and the one year anniversary of the Commencement Date due to revenue short falls resulting from delays in achieving full occupancy and one time start-up costs; and
   2. a Five Year Contingency Fund of not more than $1,100 per unit per year, which will be available to help offset operating deficits experienced by the Co-op between the Commencement Date and the five year anniversary of the Commencement Date; provided, however, that any amount of the Five Year Contingency Fund not used in a given year (where "year" means a 12 month period commencing on the Commencement Date or an anniversary thereof) will not be carried forward to the next year.

If any operating subsidy is required by the Co-op at any time prior to five year anniversary of the Commencement Date, and there are funds in the Co-op Operating Reserve, the First Year Contingency Fund or Five Year Contingency Fund will be used only after the Co-op Operating Reserve has been depleted. Disbursements from either such Contingency Fund will be at the discretion of the City, and in any event will only be made after such supporting evidence as the City may request of the shortfall or deficit has been presented by the Co-op to the City.