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67A.891 Uses of sinking fund.

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67A.891 Uses of sinking fund. All sums received and deposited in the sinking fund shall be held inviolate and applied by <br>the government, or the trustee in respect of the bonds solely for the payment of the <br>principal of, and interest on, the bonds issued for the financing of the identified project. <br>The amount levied, collected and deposited in the sinking fund from initial improvement <br>assessment levies in connection with the project, in excess of maturing principal and <br>interest of the bonds and equal to twenty percent (20%) of maximum annual principal and <br>interest requirements, for the purpose of creating the debt service reserve fund shall be <br>held in the sinking fund as a special reserve for that purpose. Such excess levies shall <br>continue annually until the debt service reserve requirement has been accrued in the debt <br>service reserve fund in respect of all outstanding bonds; provided that the debt service <br>reserve requirement may be funded from the proceeds of the bonds. If, at the time of any <br>annual levy of the improvement assessment, the sum held in the sinking fund as debt <br>service reserve fund shall exceed the debt service reserve requirement, such excess may <br>be taken into account in fixing the rate of the improvement benefit assessment for the <br>ensuing year; and if the amount so held in the debt service reserve fund is below the <br>specified level, the next annual improvement assessment levy shall be increased in a <br>corresponding manner so as to accrue the debt service reserve requirement. In making the <br>improvement assessment levy for the year preceding the final maturity of bonds for any <br>project, the urban-county council may take into account, and make allowance for the <br>amount held in the sinking fund of the project as the debt service reserve fund; and if in <br>making the levy the urban-county council shall miscalculate and provide funds <br>insufficient to pay the final maturing principal and interest, the governing body shall be <br>authorized, and shall be required, to make a subsequent improvement assessment levy <br>upon the benefited properties sufficient to make up the deficiency, with interest to date of <br>payment. If the procedures required by KRS 67A.871 to 67A.894 shall result in a surplus <br>after payment and discharge of the bonds, and all interest thereon to date of payment, <br>such surplus shall be refunded, pro rata, to the owners of benefited properties, as <br>determined at the date the surplus is ascertained by the governing body to exist. Effective: March 30, 1976 <br>History: Created 1976 Ky. Acts ch. 371, sec. 21, effective March 30, 1976.