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SanfordHolshouser <br />www.Sanfordholshouserlaw.com <br /> <br /> <br /> <br />October 31, 2016 <br /> <br />Orange County – capital funding for outside agencies <br /> <br />There are a variety of ways in which the County could provide capital funding for <br />outside agencies if it decided to do so. In each case, the legal basis for our approach <br />represents a combination of the statute that allows the County to contract with private <br />entities to carry out work that the County could carry out itself (Section 153A-449), and <br />the statute that allows the county to enter multi-year continuing contracts for services <br />(Section 153A-13). In many ways, these approaches mirror approaches used for <br />affordable housing programs in which the units will be privately owned. <br />Build a building, lease it out long-term <br /> The County would build a building for use by the agency. The County would <br />continue to own the building. The County could either pay cash for the building or <br />undertake an installment financing for the building (whether the financing would qualify <br />for tax-exempt financing or would require more expensive taxable financing would have <br />to be determined at that time). The lease could either require a cash payment or <br />provide that the use of the building is part of the County’s consideration for the services <br />to be provided by the agency. Matters of maintenance, taxes and insurance would also <br />have to be resolved in connection with the lease. The construction of the building would <br />likely be subject to the construction and bid laws otherwise applicable to County <br />projects. <br /> As an alternative, the County could establish a nonprofit corporation of its own to <br />undertake the financing and construction, although the lenders would still look to the <br />County to make the loan payments, and the construction and bids laws would likely still <br />apply. <br />Make a restricted capital grant <br /> The County would use cash on hand to make a larger than usual grant that the <br />agency could use for a capital expense. The performance agreement would restrict the <br />use of the funds for the planned capital expense, and would extend for a term <br />18