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6 <br /> the County or PFA, but rather is payable solely from debt service payments received <br /> from the Borrower. <br /> The Borrower has asked PFA to issue the Bonds in the principal amount of up to <br /> $6,500,000. The proceeds of the Bonds will be loaned to The Carolina Friends School <br /> to be used to (i) finance and equip a new performing arts center (the "Project"), (ii) <br /> finance a debt service reservefund and (iii) finance certain issuance costs to be <br /> incurred in connection with the Bonds. <br /> Federal tax law requires that tax exempt bonds issued to finance or, in certain <br /> circumstances, <br /> refinance, facilities owned by nonprofit organizations be approved by the elected <br /> legislative body (or highest elected representative) of the governmental unit that has <br /> jurisdiction over the area in which the facility is to be located. Prior to this approval, <br /> Internal Revenue Code Section 147(f) requires that a public hearing be held, at which <br /> hearing the public is given the opportunity to comment on the project. <br /> Because the proceeds of the Bonds will be used to finance and refinance projects <br /> located in Orange County, the BOCC is one of the appropriate governing bodies to <br /> approve the use of tax exempt bonds to finance and refinance the projects for the <br /> purposes of Section 147(f) of the <br /> Internal Revenue Code (the other is Wake County). <br /> The Bonds will be publicly offered by George K. Baum & Company in October. The <br /> Carolina Friends School will promise to repay the principal, premium, if any, and <br /> interest on the Bonds. Neither PFA nor Orange County has any liability for the payment <br /> of principal or interest on the Bonds. The Carolina Friends School will be solely <br /> responsible for repayment of the Bonds. The Bonds shall not be deemed to constitute a <br /> debt of the County or a pledge of the faith and credit of the County, but shall be <br /> payable solely by The Carolina Friends School from the revenues and other funds <br /> provided therefor. <br /> John Roberts said the County will have no responsibility for the Bonds or the <br /> payment or repayment of the Bonds. <br /> The Bonds will not affect the County's debt ratios or legal debt limit. Because no taxes <br /> or other revenues of the County are pledged to pay these bonds, the staff of the County <br /> has made no financial analysis of the Bonds, The Carolina Friends School, or the <br /> Project. <br /> The Carolina Friends School is a private school whose main campus is located at 4809 <br /> Friends School Road in Orange County. The Project will be located at this campus. It <br /> enrolls over 510 students. Neither the State of North Carolina nor Orange County <br /> provides revenue to The Carolina Friends School. Private tuition and donations fund its <br /> operations and facilities. <br />