2013 Kentucky Revised Statutes CHAPTER 82 - GENERAL PROVISIONS APPLICABLE TO CITIES 82.145 Special fund to repay revenue bonds -- Pledge by city to segregate and protect revenues.
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82.145 Special fund to repay revenue bonds -- Pledge by city to segregate
and protect revenues.
Prior to the issuance of the bonds, provision shall be made by ordinance for the
creation of a separate and special fund or account of the city, identified as
constituting the source of payment of principal and interest, and by covenant to be
continued so long as any of the bonds shall remain outstanding and unpaid. By the
provisions of such ordinance the city may pledge and covenant that it will cause to
be set aside and deposited in such separate and special fund, from time to time,
moneys received from any or all of the following sources, subject to the following
conditions and limitations:
(1) In the event that the contract of inducement with the governmental agency is
upon such terms as will cause the governmental project to produce direct
revenues in the form of rents, royalties, fees, rates or charges of any character,
including any payments to the city in lieu of property taxes, but not property
taxes themselves, all or any portion thereof may be so pledged; but it shall not
be a condition or requirement in the issuance of revenue bonds that such
revenues be anticipated at all, nor that they be sufficient in themselves to
provide for the payment of principal and interest when scheduled to become
due.
(2) In the event that the contract of inducement with the governmental agency is
upon such terms as in the opinion of the governing body of the city will cause
the project to produce no direct revenues, or to produce direct revenues
insufficient to give acceptable assurance of payment of principal and interest
when scheduled to become due, then:
(a) The city may pledge and covenant that it will cause to be deposited in
said special fund the revenues which it may derive from any municipally
owned and operated water, electric, gas, sewer or other utility systems, or
from any combination thereof, to the extent such revenues at the time
may be or become surplus to the necessary costs of operating and
maintaining such utility system or systems and surplus to any existing
contractual commitments of the city to the holder or holders of
outstanding revenue bonds payable from such revenues; and
(b) If the governing body of the city shall make a legislative finding of fact, as
recited in the body of the ordinance authorizing issuance of the bonds,
that the governmental project is of such nature as to provide increased
revenues to the city by reason of increased employment and resulting
increased receipts from occupational license fees or occupational license
taxes, then the city may pledge and covenant that it will cause to be
deposited in said separate and special fund the receipts which may be
definitely identified as accruing from such occupational license fees or
taxes by reason of employment in or directly related to the governmental
project, less a proportionate part of the costs of collecting such fees or
taxes.
(3) In the case of revenues originating from any of the sources and in the
respective manners set forth in the paragraphs (a) and (b) of subsection (2) of
this section, the city may covenant and pledge (i) that such revenues, or a
stipulated amount thereof, will be set aside and deposited in the special fund
when, as and if received; (ii) that as to any city-owned utility system the rate or
schedule of rates prevailing at the time revenue bonds are issued will not be
reduced so long as any of the bonds remain outstanding and unpaid, and (iii) in
the case of a pledge of revenues of a city-owned utility system or combination
of utility systems, that the city will not sell or otherwise dispose thereof without
making provision for payment of the revenue bonds from the proceeds of such
sale or other disposition, due regard being given to the priority of any
previously issued bonds which are payable from such revenues; but a city may
not additionally pledge that it will raise or adjust the rate or rates of any utility
system, or of any combination of utility systems, or of any occupational license
fee or occupational license tax solely for the purpose of assuring revenues
from such sources adequate to provide for payment of revenue bonds issued
under KRS 82.140 to 82.165.
History: Created 1962 Ky. Acts ch. 178, sec. 5(2).
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