67A.883 Ordinance of bond authorization -- Trust indenture.
(1)
Following compliance with the foregoing provisions of KRS 67A.871 to 67A.882,
the urban-county council of the government may adopt an ordinance known as the
ordinance of bond authorization. The ordinance of bond authorization shall make
provision, for the following:
(a) Determining and confirming the nature and scope of the project, the real
properties to be benefited thereby (which shall be all benefited properties
identified in the ordinance of initiation and the ordinance of determination,
excepting properties as to which lump sum payment of improvement benefit
assessment levies has been made within the statutory period), the exact
method of assessment of benefited properties and the costs of the projects;
(b) Authorizing the issuance of bonds of the government from time to time which
shall be designated "improvement lien bonds" and which shall additionally
identify the project by reference to its name or title;
(c) Determining the principal amount of the bond issue, subject to the provisions
of KRS 67A.891;
(d) Establishing the denomination and maturity dates of the bonds, which may be
term or serial maturities not to exceed thirty (30) years from date of issue, and
providing for the issuance of the bonds in series, if so ordered, each such
series to be equally secured on a pari passus basis by improvement benefit
assessments levied on all benefited properties and by liens in respect thereto;
(e) Levying an annual improvement benefit assessment effective upon the
benefited properties, except such properties for which lump sum payment of
the improvement benefit assessment has been made pursuant to KRS
67A.882(3), pursuant to the assessed value basis according to either their
respective assessed land values as determined for purposes of general ad
valorem taxation, or upon a basis of equality by zones, pursuant to findings of
fact by the urban-county council that benefited properties in particular zone
classifications are to be treated equally for assessment purposes because of
substantial equality of benefits conferred, such assessments to be made
without regard to any constitutional or other limits otherwise applicable to
taxation for general ad valorem purposes, the annual rate of such improvement
assessment to be fixed when regular county ad valorem taxes are levied and to
be sufficient in each year to provide for the payment of the bonds and interest
coupons as they mature; and, in each year until accrual of the debt service
reserve requirement, to be sufficient to provide in addition a sum equal to
twenty percent (20%) of maximum annual principal and interest requirements,
the same to constitute a debt service reserve fund as a precaution against
possible default by reason of failures in the collection of the annual levies as
hereinafter provided; provided, however, that in the event the government
shall have provided that the debt service reserve requirement be financed from
bond proceeds as one of the costs of the project, such additional levies to
accrue, the debt service reserve requirement shall be omitted, but it shall be
(2)
promptly instituted at any time in order to maintain the debt service reserve
requirement at its prescribed level;
(f) Covenanting with the holders of the bonds and coupons that until the payment
in full thereof the government will levy annually an improvement benefit
assessment upon each benefited property, as provided in the foregoing
subsection (e) hereof; provided, that the government may provide by
ordinance that certain benefited properties shall be omitted from assessment
during initial periods not to exceed three (3) years because of construction
scheduling;
(g) Covenanting with the holders of the bonds and coupons that until payment in
full thereof, the government will pursue and exhaust at the expense of the
government all remedies available to the government for the benefit and
protection of the bondholders, including both termination of water service to
delinquent real properties and enforcement of judgment and decretal sale of
the liens upon benefited properties which are granted by KRS 67A.871 to
67A.894;
(h) Designating one or more places of payment of principal and interest within or
without the Commonwealth;
(i) Specifying or omitting provisions for redemption and payment prior to stated
maturities and the terms thereof;
(j) Providing for the payment by the government of any and all reasonable and
customary charges for the services of trustees and paying agents to the end
that the holders of the bonds and coupons will receive the sums therein
stipulated without deduction for such charges; and
(k) Any other provisions not contrary to law. The government is expressly
authorized and empowered to finance any particular project by an issue of
bonds which may be sold and delivered in one or more series, each of which
series is equally and indistinguishably secured, as provided in KRS 67A.871
to 67A.894, by improvement benefit assessments levied upon all benefited
properties, except such properties for which lump sum payment of the
improvement benefit assessment has been made pursuant to KRS 67A.882(3)
and liens granted for the security of bondholders by KRS 67A.871 to 67A.894
on benefited properties shall apply to each such benefited property and in
favor of every bond of each such series, whenever issued.
In the discretion of the urban-county council of the government, any improvement
lien bonds or bond anticipation notes issued under the provisions of KRS 67A.871
to 67A.894 may be secured by a trust indenture by and between the government and
a corporate trustee, which may be any trust company or bank having the powers of a
trust company within or without the Commonwealth of Kentucky. The trust
indenture of the government providing for the issuance of improvement lien bonds
or notes may pledge or assign for the security of improvement lien bonds or notes
all or any part of the totality of improvement benefit assessments levied, collected,
enforced and received by the government. The trust indenture shall contain
provisions for protecting and enforcing the rights and remedies of the bondholders
(3)
(4)
as may be reasonable, proper and not in violation of law, including covenants and
provisions setting forth the duties of the government in relation to the purposes to
which improvement lien bond proceeds may be applied; the disposition and
pledging of receipts of improvement benefit assessments; and the custody,
safeguarding and application of all improvement benefit assessment revenues. It
shall be lawful for any bank or trust company incorporated under the laws of the
Commonwealth which may act as depository of the proceeds of bonds, notes or of
government revenues, to furnish indemnity bonds or to pledge securities as may be
required by the trust indenture of the government. Any trust indenture may set forth
the rights and remedies of the bondholders and of the indenture trustee and may
restrict the individual right of action by bondholders. In addition to the foregoing,
any trust indenture may contain any other provisions as the government may
determine to be reasonable and proper for the further security of the holders of the
bonds. All expenses incurred in carrying out the provisions of the trust indenture
shall be treated as a part of the costs of the project and shall be paid from either the
proceeds of the bonds or, during the life of the bond issue, from the proceeds of
improvement benefit assessments levied against and collected from, benefited
properties.
All bonds issued under the provisions of KRS 67A.871 to 67A.894 shall have and
are hereby declared to possess all of the qualities and incidences of negotiable
instruments under the laws of Kentucky. The bonds may be issued in coupon or in
registered form or in both, as the government may determine, and provision may be
made for the registration of any coupon bonds as to principal only and also as to
both principal and interest and for the reconversion into coupon bonds of any bonds
registered as to both principal and interest. The government may sell the bonds in
any manner either at public or private sale, and for any price as it may determine
will best effect the purposes of KRS 67A.871 to 67A.894.
Any government initiating a project pursuant to KRS 67A.871 to 67A.894 shall
have and possess all powers and the authority set forth in KRS 58.150.
Effective: July 15, 1982
History: Amended 1982 Ky. Acts ch. 334, sec. 2, effective July 15, 1982. -- Created
1976 Ky. Acts ch. 371, sec. 13, effective March 30, 1976.
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