KRS 67A.770: Deposit of prepayments and bond sale proceeds -- Security --

Disbursements.

As prepayments are received and when the bonds are delivered and the proceeds are

received by the urban -county government, the same shall be deposited in an interest -

bearing account in a bank or trust company, or combined bank and trust company, 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 United 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 pay able,

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 levied in connection there with 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 show n 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 contractor. If, after co mpletion, 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 cr eated and

maintained in connection with the project, as provided in KRS 67A.800. The advanced

installment and the one -half of one percent (0.5%) collected pursuant to KRS 67A.755

shall be part of the sinking fund.