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10 <br /> 1 The proposed funding source for nonprofits that meet the County loan criteria is the Community <br /> 2 Loan Fund. The Community Loan Fund is an existing County revolving loan fund that could be <br /> 3 expanded and capitalized further through our annual capital financing borrowings. The use of <br /> 4 financing proceeds to capitalize a loan fund is a permissible use of proceeds under the North <br /> 5 Carolina statutes. <br /> 6 <br /> 7 The Community Loan Fund was established in FY 2012-13 through appropriated General Fund <br /> 8 balance appropriation of$100,000 to provide no interest loans for residents to obtain water and <br /> 9 sewer connections. The loans to residents ranged from $3,500 to $10,000 with a maximum <br /> 10 term of 10 years. The Community Loan Fund received additional funding of$200,000 in FY <br /> 11 2017-18 from capital financing proceeds; and there is a current balance of $282,837 earmarked <br /> 12 for loans to residents for utility connections. <br /> 13 <br /> 14 Staff recommends that the nonprofit loan program be capped at $500,000 annually and no <br /> 15 individual loan to a nonprofit entity would exceed $100,000. There would be no minimum loan <br /> 16 threshold. If the revolving loan balance remained stagnant with no borrowers over a three year <br /> 17 period, then staff would recommend to the Board that the loan balance be repurposed for other <br /> 18 County capital project use through a Budget Amendment. <br /> 19 <br /> 20 The proposed nonprofit capital timeline and process would be implemented parallel to the <br /> 21 Outside Agency Operating Budget timeline and process as indicated below: <br /> 22 <br /> 23 November County Posts Applications on Websites <br /> 24 November-January Outside Agency Prepares Applications <br /> 25 December-January Question &Answer Sessions <br /> 26 End of January Outside Agency Applications are Due <br /> 27 March-May Application Review & Outside Agency Presentations <br /> 28 June Outside Agency Approval by Board <br /> 29 July Contracts Executed & Programs Begin <br /> 30 <br /> 31 Nonprofits seeking a capital loan would make a formal written loan request to the County <br /> 32 Manager by the end of November. <br /> 33 <br /> 34 The Department of Finance and Administrative Services has proposed the following capital <br /> 35 funding policy and loan criteria for consideration. <br /> 36 <br /> 37 Proposed capital funding policy: <br /> 38 1) Loans Not to Exceed $100,000 and subject to available Revolving Loan Balances <br /> 39 2) BOCC approved loan agreement; recourse, default and nonprofit bylaw dissolution <br /> 40 provisions <br /> 41 3) Loans secured by Deed of Trust <br /> 42 4) Revolving loan structure to recapitalize County funding source <br /> 43 5) Five to ten year maturities at no interest; maturity term contingent on loan amount; <br /> 44 and monthly repayment <br /> 45 <br /> 46 Proposed loan eligibility criteria: <br /> 47 1) Current Outside Agency recipient with three-year average score of at least 85% <br /> 48 2) Clean Audit opinion <br /> 49 3) Three years Audited Financial Statements for completion of Nonprofit Financial <br /> 50 Capacity Review <br />