The City of Alnwick Received a Grant from Blount County

The City of Alnwick received a grant from Blount County. The $8,000,000 grant is restricted to use for construction of a facility for a city enterprise activity. The grant is for half the cost of the facility. The grantor will reimburse half of the costs as they are incurred. At the end of the first fiscal year, $3,000,000 has been spent on the project. $1,500,000 has been collected from the grantor. How should the grant be reported in the statement of revenues, expenses, and changes in net position?

A) Capital contribution of $1,500,000.
B) Operating revenues of $1,500,000.
C) Nonoperating revenues of $1,500,000.
D) Special item of $1,500,000.