KRS 107.110: Proceeds from sale of bonds to be deposited -- Security -- Disbursement.

When the bonds are delivered and the proceeds are received by the city, the same shall be

deposited in a bank or trust company, or combined bank and trust company, together with

the proceeds of all payments received from benefited property owners on a lump -sum

basis, and to the extent such deposit may exceed insurance provided by Federal Deposit

Insurance Corporation, (if the depository be a member thereof, otherwise the full

amount), the same shall be secured by a valid pledge of bonds or notes of the Unit ed

States government, or fully guaranteed thereby, having at all times a market value equal

to the undisbursed balance of such deposit; or shall be secured in such other manner as

the governing body may prescribe or approve. Costs of the project which may then be

earned and payable, may be paid forthwith. There shall be set aside into the sinking fund,

hereinafter created, a sum from bond proceeds equal to all interest which will accrue on

said bonds until the date when the first improvement assessment levi ed in connection

therewith will become due and payable. The remainder may be disbursed from time to

time in payment of costs of the project, as herein defined, except that payments on

account of the construction contracts shall not exceed ninety percent (90%) of the amount

shown by a written certificate of the engineer to have been earned for materials furnished

and/or labor performed by any contractor, the retained ten percent (10%) to be disbursed

only upon final acceptance of the finished work of such co ntractor. If, after completion,

acceptance and payment of the work of all contractors, and the payment of all costs of the

improvement project, as herein defined, there shall remain an unexpended balance of

bond proceeds, such balance shall be transferred to the sinking fund created and

maintained in connection with the project, as provided in this chapter. If, after

completion, there remains any unexpended balance of lump -sum payments, it shall be

returned, pro rata, to the payors.