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The following tables are the result of a financial model that was constructed in an attempt to demonstrate the history of the fund and to determine what the future of the fund will be with or without a credit fee increase. There are several variables that comprise the model, however, the most important (and the one with the most uncertainty) is the demand for credits. If sales of credits remains constant, then our ability to make financial predictions is fairly good. However, if credit sales fluctuate, then the mitigation bank operations will need to be adjusted appropriately. For example, a large project in one year could consume- all of the available credits. This would require the bank to increase the number of acres that are being restored to generate credits and thereby require a much larger budget the following year to carry out the increase in restoration. The opposite is also true: if credit sales drop dramatically below the 8-credit per year average, then field operations may need to be curtailed if the bank fund managers feel that the trend will continue. Therefore, bank fund managers should consider this dynamic link when viewing the tables and realize that any number of variables could cause a change in projected fund balances. It is recommended that this model be updated annually to reflect actual revenues and expenses. The cost per credit or credit fee is an equally important variable. This will be discussed in more detail in the next section and in the recommendations section at the end of this paper. Interpretation of the Model: There are two tables that follow that reflect two different scenarios. The first is status quo with no change in credit fees (i.e. credits are currently $30,000). The second table demonstrates the changes associated with an increase in the price per credit to $45,000 (as recommended in the final section at the end of this paper). Table 1 The first version of the model assumes the current fee and current spending levels. At this rate, the bank fund is depleted by FY09 assuming all other factors are consistent. This suggests that a change is in order to keep the fund healthy. Table 2 This version depicts the seven year forecast with a rate increase as proposed in the conclusions and recommendations. The new fee would be $45,000 per credit which would allow the City to more closely recover the costs of generating a mitigation credit. This recommended fee is closer to the rate charged by the State for the revolving fund (which is a fund that the State allows some developers to pay into for their mitigation needs when a bank is not available and on site mitigation is not possible). The State used a 1994 .study (appendix C) which estimated the cost of restoration as a factor in determining their rate. With this increase, the financial projections show that the bank may be able to maintain sufficient funds through FY09 if the demand for credit stays constant. In this case, "sufficient funds" is defined as a stable base amount that would allow for 5 years of O&M responsibilities if the bank were to cease credit sales. The effects of a rate increase on demand for credits is unknown at this time. Since mitigation banking is relatively new, it is difficult to predict how the market will react to a price increase. Developers have the option of doing their own mitigation in certain cases but the costs and time