KRS 107.180: Sums received and deposited in sinking fund -- How held -- Debt service

reserve -- Deficiency assessment -- Refund of surplus.

All sums received and deposited in the sinking fund shall be held inviolate and applied by

the city solely for the payment of the principal of, and interest on, the bonds issued for the

financing of the identified improvement project. The amount collected, and deposited in

the sinking fund from the first improvement assessment levied in connection with any

project, in excess of maturing principal and interest of the bonds, and for the purpose of

creating a "debt service reserve," shall be held in the sinking fund for that purpose. If the

collections from the first annual improvement assessment levy shall fail to produce a sum

sufficient to provide a "debt service reserve" equal to twenty percent (20%) of future

average annual principal and interest requirements, the next annual improvement

assessment shall be fixed at such level as may be calculated to restore the "debt service

reserve" to such level after providing for current principal and interest maturities. The

debt service reserve requirement of a wastewater collection project by a metropolitan

sewer district may be funded from the proceeds of the bonds. If, at the time of any annual

levy of the improvement assessment, the sum held in the sinking fund as said "debt

service reserve" shall exceed the level herein specified, such excess may be taken into

account in fixing the rate of the improvement assessment for the ensuing y ear; and if the

amount so held in said "debt service reserve" is below said specified level, the next

annual improvement assessment levy shall be increased in a corresponding manner. In

making the improvement assessment levy for the year preceding the fina l maturity of

bonds for any improvement project, the governing body may take into account, and make

allowance for, the amount held in the sinking fund of the particular project as a "debt

service reserve"; and if in making such levy the governing body shal l miscalculate and

provide funds insufficient to pay the final maturing principal and interest, the governing

body shall be authorized to, and shall be required, to make a subsequent improvement

assessment levy upon the benefited properties sufficient to m ake up the deficiency, with

interest to date of payment. If the procedures required by this chapter shall result in a

surplus after payment of the bonds, and all interest thereon to date of payment, such

surplus shall be refunded, pro rata, to the owners o f benefited properties, as determined at

the date such surplus is ascertained by the governing body to exist.