The Local Oregon Capital Assets Program (LOCAP) is a pooled capital asset financing program available to members of AOC.
The program offers counties competitive tax-exempt rates, precise and quantifiable costs of borrowing, user-friendly documentation, flexible payment terms, fixed rate financing and 100 percent financing with no down payment required.
Legal fees, trustee fees and program management expenses are pooled with other participants, thereby reducing costs for each participating local government.
LOCAP proceeds are used to finance “capital assets,” such as real property, buildings and equipment. The capital assets can be purchased, constructed or improved. Expenses for normal operations are not considered capital assets.
In a pooled financing program, each participating county enters into a financing agreement that sets out the terms for participation. The notes are bundled together and held by a trustee. The trustee sells investors proportionate interests in the bundled financing agreements, which is referred to as a “certificate of participation” or “COP.”
Benefits to Counties
Benefits to counties of the LOCAP program over traditional municipal bonds include:
- Quick access to funds – voter approval not required
- Access to the municipal bond market at reduced costs of issuance when multiple issuers are participating
- Standardized documentation