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3 Commissioner Gordon said that the Section 8 position can be specified, but the rest of the members should be at-large. The Section 8 position is the only required position. She asked about the statute. Geof Gledhill said that this statute is regarding how the appointments work. There is another statute, which is not in these materials, that says with respect to County housing authorities, where the term "Mayor" is used, it means Board of County Commissioners. There does not need to be anything in the bylaws. Chair Jacobs said that he is not clear that the term definition is referring only to the Section 8 position. He said that this is saying that, if the Commissioner in the Section 8 Housing seat on the Authority ceases to receive such assistance, the term would end. He asked that this be put in the term definition. Jabrina Robinson said that it could be changed. Geof Gledhill said that there is potential that Orange County could, in the future, create public housing through the Authority. That is why it is written in this manner, to include that possibility. III. Long-Term Affordability Documents Tara Fikes made reference to her memorandum, which explains how she is trying to secure the County's interest in long-term affordability in all of the housing projects that receive County funding. For all affordable housing documents, there are normally four documents that go along with the money. The first is the development agreement between Orange County and the development organization, mostly non-profits. This outlines the requirements of the organization. This is the contract with non-profit organizations. The money is normally provided as a deferred loan, so there are security documents for the loan such as a deed of trust and a promissory note. The deed of trust is recorded against the property and is recorded before any other liens. The restrictive covenants place a 99-year affordability requirement on the property. Once the property is in ownership of the non-profit organization, the County asks the organization to immediately record the declaration of restrictive covenants before any other liens are placed on the property. This has been done with all affordable housing projects. The deed of trust is recorded in the Register of Deeds so that it becomes a document of record. There have been a few cases where the County has granted money to non-profit organizations to help the financials of the projects. In those cases, there have been no deeds of trust or promissory notes executed. There has been some tweaking over the last couple of years. Geof Gledhill said that recently, there was a more sophisticated review of the documents with the suggestion that they be changed in a fairly significant way. The promissory note that the County uses for the loans made ends up on the books as a liability for 99 years with the interest at 10% accruing for 99 years. At the end of the 99-year period of the deferred loan, there is a huge liability. There was concern about this, and he has been looking at the transaction from this perspective and made a decision to make the promissory note what is called non-recourse, which means that, for non-payment of the loan, the County has no recourse. If the property stays affordable for a 99-year period, then the loan goes away. There is no expectation to get money back from the loan, but the expectation is for long-term affordability of the housing. A decision was made to eliminate the possibility that the County would go after the non-profit if something went bad in the transaction and the property was taken back, but money was still owed because of the 99-year note with interest accruing. The County's recourse will be to get the property back only and hopefully it will be turned over to another non-profit. In answer to a question by Commissioner Carey, Geof Gledhill explained that if the non- profit defaults in that it fails to keep the property maintained, then the County would notice a default on the loan and give them the opportunity to cure the default and get the property in