Orange County Partnership defends private status in court.
Orange County Partnership Defends Status as Private Organization in Appellate Court
During an Oct. 17 appellate court appearance, Orange County Partnership passionately defended its position as a private organization against the state watchdog agency’s opposing argument.
The oral arguments marked the latest chapter in the ongoing battle between the nonprofit and the New York State Authorities Budget Office (ABO) for regulatory control.
Richard Gorden, counsel for Orange County Partnership, presented a compelling case to the Appellate Division, Second Judicial Department justices, emphasizing the significant organizational changes the nonprofit had made in recent years. He argued that these changes rendered ABO oversight unnecessary.
Notable changes included removing county officials and legislators from the agency’s board and ending financial support from the county government, according to Mr. Gorden.
He argued that despite these changes, ABO’s decision to classify Orange County Partnership as a public benefit organization under its jurisdiction was arbitrary and unfair.
Brian Lusignan, an assistant attorney general representing ABO, countered by asserting that Orange County Partnership, despite its organizational changes, still functioned as the county’s economic development front organization, just as it had since its inception.
Referring to a legal precedent set by a sister appellate court, Lusignan stated, “It talks about the purpose of the entity, and if the purpose is a public purpose, then in some cases that may still bring in ABO’s oversight authority.”
ABO serves as a watchdog over public authorities with unique financing tools for the benefit of the public, including economic development. Mr. Lusignan explained that approximately 15 ABO staff members oversee nearly 600 state and local public authorities.
Entities under ABO’s jurisdiction must comply with reporting requirements, such as submitting annual reports, budgets, certified financial audits, and records of procurement and investment.
Originally established in 1985 as a private-public entity to promote economic development in Orange County, the Orange County Economic Development Corporation transformed into Orange County Partnership in 2011.
In 2011, ABO determined that the organization fell under its jurisdiction as a local public authority due to its affiliation with the Orange County government, Orange County Industrial Development Agency, and other economic development offices.
Starting in October 2017, the nonprofit underwent a series of changes, including rebranding as Orange County Partnership, amending agency bylaws, and discontinuing financial contributions from the county government and industrial development agency.
According to an ABO report, the nonprofit received over $6.7 million from the county government and industrial development agency since its establishment.Despite these changes, ABO persisted in classifying Orange County Partnership as a public authority and moved to censor all board members in May 2019. The watchdog agency also threatened to dissolve the nonprofit if it continued to disregard reporting requirements.
In response, Orange County Partnership took ABO to court the following month, challenging its decision. The nonprofit emerged victorious in the Orange County Supreme Court later that year.
ABO appealed the decision, and the appellate court is expected to render a verdict soon after the oral arguments on Oct. 17.
How might the court’s decision on the private status of Orange County Partnership impact its ability to drive economic growth and development in the region
Gorden argued that Orange County Partnership’s primary focus is not on economic development, but rather on attracting private investments to the county. He highlighted the organization’s efforts to bring in new businesses, create jobs, and stimulate the local economy through private sector partnerships.
During the court session, Gorden also questioned ABO’s authority to regulate private organizations, stating that their oversight should be limited to public entities. He argued that Orange County Partnership maintains a high level of autonomy and independence from government control, further solidifying its status as a private organization.
The ongoing dispute between Orange County Partnership and ABO began when the state watchdog agency classified the nonprofit as a public benefit organization, subjecting it to regulatory control. Orange County Partnership has continuously contested this classification, asserting its status as a private entity.
The outcome of this appellate court hearing will have significant implications for Orange County Partnership and its ability to operate independently. If the court rules in favor of the nonprofit, it would reaffirm their private status and establish a precedent for similar organizations facing regulatory scrutiny.
Orange County Partnership plays a vital role in driving economic growth and development in the region. As a private organization, it has the flexibility to pursue innovative strategies, forge partnerships with businesses, and attract investments to benefit the local community. Maintaining its private status would allow Orange County Partnership to continue these efforts without unnecessary regulatory constraints.
The court’s decision will likely be guided by the interpretation of the legal framework governing the classification of organizations such as Orange County Partnership. While ABO argues that the nonprofit still functions as a public entity, Orange County Partnership contends that its organizational changes and private sector focus demonstrate its status as a private organization.
Regardless of the court’s ruling, this case highlights the importance of clearly defining the regulatory boundaries for organizations like Orange County Partnership. Balancing the need for oversight with the flexibility and autonomy required for private entities to drive economic growth is a complex task.
As the appellate court evaluates the arguments presented by both parties, it is crucial that they consider the unique nature and objectives of Orange County Partnership. By recognizing the nonprofit’s private status, the court would provide clarity on the regulatory framework governing organizations involved in economic development and private investments.
Ultimately, the court’s decision will determine whether Orange County Partnership can continue to operate independently and contribute to the economic prosperity of Orange County. As this case progresses, the outcome will not only impact the nonprofit itself but could also influence the regulatory landscape for similar organizations across the state.
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