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107.090 Third ordinance -- Purpose -- Adoption.
(1)
(2)
Upon compliance with KRS 107.080 the governing body may adopt an
ordinance, hereinafter referred to as the "Third Ordinance":
(a) Finally authorizing the issuance of bonds of the city which shall be
designated "Improvement Assessment Bonds" and shall, in addition,
identify the project by name of streets, number, or otherwise;
(b) Determining the principal amount thereof;
(c) Establishing the denominations and maturity dates thereof, which may be
term or serial maturities, not to exceed thirty (30) years from date of issue;
(d) Levying an annual assessment effective only upon the benefited
properties, according to their respective assessed values as determined
for the purposes of general city taxation, but without regard to any
constitutional or other limits otherwise applicable to taxation for general
city purposes, the annual rate of such improvement assessment to be
fixed when city taxes are levied, and to be sufficient in each year to
provide for the payment of such bonds and interest coupons as they
mature; and, in the case of the first such levy, sufficient to provide, in
addition, a sum equal to twenty percent (20%) of average annual principal
and interest requirements, the same to constitute a "debt service reserve"
as a precaution against possible default by reason of failures in the
collection of the annual levies, as hereinafter provided;
(e) Covenanting with the holders of said bonds and coupons, that until the
payment in full thereof the city will levy annually an improvement
assessment upon the benefited properties only, as provided in the
foregoing subsection (d) hereof;
(f) Covenanting with the holders of said bonds and coupons, that until
payment in full thereof, the city will pursue and exhaust, at the city's
expense, all remedies available to the city and for the benefit and
protection of the bondholders, including enforcement to judgment and
decretal sale of the liens upon benefited properties, as provided in this
chapter;
(g) Designating one (1) or more places of payment of principal and interest,
within or without the Commonwealth;
(h) Specifying, or omitting, provisions for redemption and payment prior to
stated maturities, and the terms thereof;
(i) Providing for the payment by the city of any and all reasonable and
customary charges for the services of paying agents, to the end that the
holders of the bonds and coupons will receive the sums therein stipulated,
without deductions for such charges; and
(j) Any other provisions not contrary to law.
Following compliance with the foregoing provisions of KRS Chapter 107 for a
wastewater collection project undertaken by a metropolitan sewer district, the
board of the district may adopt a third ordinance which shall make those
provisions set forth in this subsection.
(a) The third ordinance shall determine and confirm:
1.
2.
(b)
(c)
(d)
(e)
(f)
The nature and scope of a project;
The real properties to be benefited, which shall be all benefited
properties identified in the first ordinance and the second ordinance,
excepting properties for which lump-sum payment of improvement
benefit assessment levies had been made within the statutory
period;
3.
The exact method of assessment of the benefited properties; and
4.
The costs of the project;
The third ordinance shall authorize the issuance of bonds of the district
periodically. The bonds shall be designated "improvement lien bonds" and
shall additionally identify the project by reference to its name or title;
The third ordinance shall determine the principal amount of the bond
issue, subject to the provisions of KRS 107.210;
The third ordinance shall establish the denominations and maturity dates
of the bonds. The bonds may be term or serial maturities not to exceed
thirty (30) years from the date of issue, and may provide for the issuance
of the bonds in series, each such series to be equally secured without
preference as to bondholders by improvement benefit assessments levied
on all benefited properties and by liens in respect thereto;
The third ordinance shall levy an annual improvement benefit assessment
on the benefited properties, for which lump-sum payments were not
made, pursuant to the assessed value basis according to either:
1.
Their respective assessed land values as determined for purposes
of general ad valorem taxation; or
2.
Upon a basis of equality by zones, pursuant to findings of fact by the
board that benefited properties in particular zone classifications are
to be treated equally for assessment purposes because of
substantial equality of benefits conferred.
The assessments may be made without regard to any constitutional or
other limits otherwise applicable to taxation for general ad valorem
purposes. The annual rate of the improvement assessment shall be fixed
when regular county ad valorem taxes are levied and shall be sufficient in
each year to provide for the payment of the bonds and interest coupons
as they mature. In each year, until accrual of the debt service reserve
requirement, the annual rate shall be sufficiently large to provide an
additional sum equal to twenty percent (20%) of maximum principal and
interest requirement, which additional sum shall constitute a debt service
reserve fund as a precaution against possible default by reason of failures
in the collection of the annual levies; provided, however, that if the district
shall have provided by the third ordinance that the debt service reserve
requirement be financed from bond proceeds as one of the costs of the
project, the additional annual benefit assessment shall be omitted, but
additional levies shall promptly be instituted at any time necessary to
maintain the debt service reserve requirement at its prescribed level;
The third ordinance shall covenant with the holders of the bonds and
coupons that until their payment in full, the district shall levy annually an
(3)
improvement benefit assessment upon each and every benefited
property, as provided in subsection (2)(e) of this section; provided,
however, the district may provide by order that certain benefited
properties be omitted from assessment during initial periods not to exceed
three (3) years because of construction scheduling;
(g) The third ordinance shall covenant with the holders of the bonds and
coupons that until payment in full, the district shall pursue and exhaust at
the district's expense all remedies available to the district for the benefit
and protection of the bondholders. These remedies include both
termination of water service to delinquent real properties and enforcement
to judgment and sale of the liens upon benefited properties which are
granted by this chapter;
(h) The third ordinance shall designate one or more places of payment of
principal and interest within or without the Commonwealth;
(i) The third ordinance shall specify or omit provisions for redemption and
payment prior to stated maturities and the terms thereof;
(j) The third ordinance shall provide for the payment by the district of 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 stipulated without deduction for such charges; and
(k) The third ordinance may contain any other provisions not contrary to law.
The district is expressly empowered to finance any particular project by
an issue of bonds which may be sold and delivered in one or more series.
Each series shall be equally and indistinguishably secured, as provided in
KRS Chapters 76 and 107, by improvement benefit assessments levied
upon all benefited properties and by liens granted for the security of
bondholders by KRS Chapters 76 and 107 on benefited properties. The
assessments and liens shall apply to each benefited property and in favor
of each bond of each series whenever issued.
In the discretion of the board of a metropolitan sewer district relating to a
wastewater collection project, any improvement lien bonds or bond anticipation
notes issued under KRS Chapters 76 and 107 may be secured by a trust
indenture between the district 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 may pledge or assign for the
security of the improvement lien bonds or notes all or any part of the proceeds
of improvement benefit assessments received by the district. The trust
indenture shall contain any provisions for protecting and enforcing the rights
and remedies of the bondholders as may be reasonable, proper and not in
violation of law, including:
(a) Covenants setting forth the duties of the district in relation to the purposes
to which improvement lien bond proceeds may be applied;
(b) The disposition and pledging of receipts of improvement benefit
assessments; and
(c) The custody, safeguarding and application of all improvement benefit
assessment revenues. It shall be lawful for any Kentucky bank or trust
company acting as depository of the proceeds of bonds, notes or district
(4)
(5)
(6)
revenues, to furnish indemnity bonds or to pledge securities as required
by the trust indenture of the district. Any trust indenture may set forth the
rights and remedies of the bondholders and indenture trustee and it may
restrict the individual right of action by bondholders. In addition, any trust
indenture may contain such other provisions as the district may determine
to be reasonable for the further security of the holders of the bonds. All
expenses 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
improvement benefit assessments.
All bonds issued by metropolitan sewer districts under the provisions of KRS
Chapters 76 and 107 shall 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. Provision also 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 district shall sell the bonds at
public sale at a price that will best effect the purposes of KRS Chapters 76 and
107.
Any metropolitan sewer district initiating a wastewater collection project
pursuant to KRS Chapters 76 and 107 shall have and possess all powers and
the authority set forth in KRS 58.150.
No benefit assessment bonds shall be sold without competitive bidding.
History: Amended 1976 (1st Extra. Sess.) Ky. Acts ch. 13, sec. 16. -- Amended
1970 Ky. Acts ch. 92, sec. 23. -- Created 1956 Ky. Acts ch. 239, sec. 9.
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