Orange County Partnership defended its status as a private organization during an Oct. 17 appellate court appearance, in response to the opposing argument by a state watchdog agency.
The oral arguments were the latest development in the efforts of the New York State Authorities Budget Office, commonly known as ABO, to gain regulatory control over the nonprofit.
Richard Gorden, counsel for Orange County Partnership, argued to the Appellate Division, Second Judicial Department justices that his client had made substantial organizational changes several years ago and that its current operations no longer warranted ABO oversight.
Notable changes involved the removal of county officials and legislators from the agency’s board and the cessation of financial support from the county government, Mr. Gorden said.
He argued that because of the changes, ABO’s decision to classify his client as a public benefit organization under the agency’s jurisdiction was arbitrary and capricious.
Brian Lusignan, an assistant attorney general representing ABO, contended that Orange County Partnership, despite having undergone a series of changes, still served as the same economic development front organization for the county as it had since its founding.
Referring to a legal precedent set by a sister appellate court, he said, “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 in a watchdog role over public authorities empowered by state laws with unique financing tools to further public interests, including economic development; about 15 ABO staffers oversee nearly 600 state and local public authorities, Mr. Lusignan said.
An agency under its jurisdiction shall abide by reporting requirements, including annual reports, budgets, certified financial audits, procurement, and investment records.
Orange County Economic Development Corp., the predecessor of Orange County Partnership, was founded in 1985 as a private-public entity to promote economic development in the county.
In 2011, ABO decided that the organization was a local public authority under its jurisdiction in that it was sponsored by and affiliated with the Orange County government, Orange County Industrial Development Agency, and other economic development offices.
Starting in October 2017, the nonprofit embarked on a series of organizational changes, including rebranding itself as Orange County Partnership, amending agency bylaws, and tabling money contributed by the county government and industrial development agency.
Following the above changes, ABO maintained its determination that Orange County Partnership was a public authority and moved to censor all board members in May 2019; it also warned that it might move to dissolve the nonprofit should the agency continue to overlook the reporting requirements.
The following month, Orange County Partnership took the watchdog agency to court to challenge its decision and won the case at the Orange County Supreme Court later that year.
ABO appealed, and the court will render a decision soon.
