Agenda - 09-06-2018 Item 3 - Discussion on Proposed Nonprofit Capital Funding Policy and Criteria

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1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: September 6, 2018 Action Agenda Item No. 3 SUBJECT: Discussion on Proposed Nonprofit Caaital Fundina Policv and Criteria DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: Power Point Presentation Bonnie Hammersley, (919) 245 -2300 December 13, 2016 Agenda Abstract with Travis Myren, (919) 245 -2308 Outside Agency Policy Documents Gary Donaldson, (919) 245 -2453 Excerpt from DRAFT June 12, 2018 Paul Laughton, (919) 245 -2152 BOCC Work Session Minutes PURPOSE: To discuss a proposed County policy and criteria for providing loans to nonprofits for capital projects. BACKGROUND: At the June 12, 2018 BOCC meeting, a request was made to develop a County nonprofit capital funding policy and loan criteria. This request was based on a pending $100,000 capital campaign request from the Inter -Faith Council for Social Services, Inc. with funds earmarked from the County's Social Justice Fund. The Towns of Carrboro and Chapel Hill have not indicated any capital funding for the Inter -Faith Council to date. The proposed funding source for nonprofits that meet the County loan criteria is the Community Loan Fund. The Community Loan Fund is an existing County revolving loan fund that could be expanded and capitalized further through our annual capital financing borrowings. The use of financing proceeds to capitalize a loan fund is a permissible use of proceeds under the North Carolina statutes. The Community Loan Fund was established in FY 2012 -13 through appropriated General Fund balance appropriation of $100,000 to provide no interest loans for residents to obtain water and sewer connections. The loans to residents ranged from $3,500 to $10,000 with a maximum term of 10 years. The Community Loan Fund received additional funding of $200,000 in FY 2017 -18 from capital financing proceeds; and there is a current balance of $282,837 earmarked for loans to residents for utility connections. Staff recommends that the nonprofit loan program be capped at $500,000 annually and no individual loan to a nonprofit entity would exceed $100,000. There would be no minimum loan threshold. If the revolving loan balance remained stagnant with no borrowers over a three year period, then staff would recommend to the Board that the loan balance be repurposed for other County capital project use through a Budget Amendment.