Operating Deficit and Surplus Sample Clauses
The "Operating Deficit and Surplus" clause defines how financial shortfalls (deficits) and excesses (surpluses) in the operation of a property or business are identified, managed, and allocated among the parties involved. Typically, this clause outlines the procedures for covering deficits—such as requiring additional contributions from owners or partners—and specifies how surpluses are distributed, often according to pre-agreed percentages or priorities. Its core practical function is to ensure transparency and fairness in handling operational financial outcomes, thereby preventing disputes and clarifying each party’s financial responsibilities and entitlements.
Operating Deficit and Surplus. 1. The Provider is solely responsible for covering any Manageable Cost increases in any Fiscal Year.
2. In the event that there are unanticipated increases in Non-Manageable Costs, BC Housing may cover such costs through:
a. a mid-year budget adjustment that increases the subsidy; or
b. an extraordinary expense payment.
3. The Provider may retain any Operating Surplus in each Fiscal Year, and may, with prior approval from BC Housing, make payments out of the Operating Surplus as follows:
a. payments for programs for the benefit of the Clients where such programs are related to the Services and are consistent with the goals of this Agreement; and
b. payments for capital renovations, improvements or other payments approved by BC Housing.
4. Where an Operating Surplus exists, the Provider may be required to cover Non-Manageable Cost increases, as directed by BC Housing.
5. BC Housing has the right at any time to adjust an Operating Budget if Operating Surpluses exist.
Operating Deficit and Surplus