KRS 67A.885: Deposit of funds -- Security -- Interest.

When any bonds are delivered and the proceeds are received by the government, they

shall be deposited in a bank or trust company or combined bank and trust company, and

to the extent the deposit may exceed insurance provided by federal deposit insurance

corporation, the same shall be secured by a valid pledge of direct bonds or notes of the

United States government or bonds or notes fully guaranteed thereby having at all times a

market value equal to the undisbursed balance of such deposit; or shall be secu red in any

other manner as the urban-county council may approve. Costs of the project shall be paid

from the proceeds of the bonds pursuant to such regulations and requirements as shall be

determined by the government and incorporated into the ordinance of bond authorization.

There shall be set aside into the sinking fund hereinafter created a sum from bond

proceeds equal to all interest which will accrue on the bonds until the date when the first

improvement benefit assessment levied in connection therewit h will become due and

payable, together with such further sum as may be provided in the ordinance of bond

authorization, not to exceed interest on the bonds for a period of three (3) years. If

provided in the ordinance of bond authorization, all or any po rtion of the debt service

reserve requirement shall be set aside into the debt service reserve fund. If after

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

costs of the project there shall remain an unexpended b alance of bond proceeds, the

balance shall be transferred to the sinking fund created and maintained in connection with

the project as provided by KRS 67A.871 to 67A.894.