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6 <br /> 1 finance a debt service reservefund and (iii) finance certain issuance costs to be <br /> 2 incurred in connection with the Bonds. <br /> 3 <br /> 4 Federal tax law requires that tax exempt bonds issued to finance or, in certain <br /> 5 circumstances, <br /> 6 refinance, facilities owned by nonprofit organizations be approved by the elected <br /> 7 legislative body (or highest elected representative) of the governmental unit that has <br /> 8 jurisdiction over the area in which the facility is to be located. Prior to this approval, <br /> 9 Internal Revenue Code Section 147(f) requires that a public hearing be held, at which <br /> 10 hearing the public is given the opportunity to comment on the project. <br /> 11 <br /> 12 Because the proceeds of the Bonds will be used to finance and refinance projects <br /> 13 located in Orange County, the BOCC is one of the appropriate governing bodies to <br /> 14 approve the use of tax exempt bonds to finance and refinance the projects for the <br /> 15 purposes of Section 147(f) of the <br /> 16 Internal Revenue Code (the other is Wake County). <br /> 17 <br /> 18 The Bonds will be publicly offered by George K. Baum & Company in October. The <br /> 19 Carolina Friends School will promise to repay the principal, premium, if any, and <br /> 20 interest on the Bonds. Neither PFA nor Orange County has any liability for the payment <br /> 21 of principal or interest on the Bonds. The Carolina Friends School will be solely <br /> 22 responsible for repayment of the Bonds. The Bonds shall not be deemed to constitute a <br /> 23 debt of the County or a pledge of the faith and credit of the County, but shall be payable <br /> 24 solely by The Carolina Friends School from the revenues and other funds provided <br /> 25 therefor. <br /> 26 <br /> 27 John Roberts said the County will have no responsibility for the Bonds or the <br /> 28 payment or repayment of the Bonds. <br /> 29 <br /> 30 The Bonds will not affect the County's debt ratios or legal debt limit. Because no taxes <br /> 31 or other revenues of the County are pledged to pay these bonds, the staff of the County <br /> 32 has made no financial analysis of the Bonds, The Carolina Friends School, or the <br /> 33 Project. <br /> 34 <br /> 35 The Carolina Friends School is a private school whose main campus is located at 4809 <br /> 36 Friends School Road in Orange County. The Project will be located at this campus. It <br /> 37 enrolls over 510 students. Neither the State of North Carolina nor Orange County <br /> 38 provides revenue to The Carolina Friends School. Private tuition and donations fund its <br /> 39 operations and facilities. <br /> 40 <br /> 41 Jeff Poley, Carolina Friends School, said the school would like to borrow up to <br /> 42 $6,500,000 from the Public Finance Authority in Wisconsin, and these are tax-exempt <br /> 43 bonds. <br /> 44 Commissioner Dorosin asked if this process is administrative/procedural only, in <br /> 45 order to secure the bonds. <br /> 46 Jeff Poley said yes. <br />