Item 8-e - Nonprofit Capital Funding Loan Agreement

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SanfordHolshouser www.Sanfordholshouserlaw.com commensurate with the size of the grant. Because County money would be the intended source for the payment of the construction costs, the construction of the building would likely be subject to the construction and bid laws otherwise applicable to County projects. Make a multi-year grant that could be used for lease or loan payments The outside agency would contract for a capital project, and the County would enter a multi-year grant agreement that was sized to provide for the agency’s lease or loan payments related to the project. Fund a loan-loss reserve to back loans to the outside agencies. As the County has done with its business loan programs, the County could fund a loan-loss reserve to support loans incurred by the outside agencies. Considerations for all approaches The function to be served by the outside agency must be a function the County is authorized to provide directly. Each arrangement should be supported by a contract with the outside agency that specifies the work to be done by the agency. If the County uses a multi-year grant approach, then the contract should extend for the term of the grant. If the County uses a lease approach, then the performance contract should extend for the term of the lease. There should in all events be some level of proportionality between the funding from the County and the service by the agency. In undertaking any program of this sort, the County should build a strong record documenting the public benefit expected from the arrangement. To the extent the County views the project and benefitting agencies as enhancing employment and business prospects in the County, the County would be well-served to also follow the statutory procedures (including public hearings) provided for in the business incentive statutes. * * * * * * * * * * * * * * * Please let me know if you have any questions for me. Thanks, as always. 19