KRS 96.182: Application of funds derived from operations -- Use of surplus.

Subject to the provisions of outstanding bonds and contracts, the board shall apply all

funds derived from operations: (1) to the payment of operating expenses, (2) to the

payment of bond interest and retirement, (3) to sinking fund requirements, (4) to th e

maintenance of a fund to meet depreciation and the improvements and extension of the

plant in an amount equal to six percent (6%) of the undepreciated book value of its

property, (5) to the maintenance of a cash working fund equal to one (1) month's revenue,

(6) to the payment of other obligations incurred in the operation and maintenance of the

plant and the furnishing of service, and (7) such taxes, if any, as the board may elect to

pay under the provisions of KRS 96.179, and any surplus revenues at the end of any

twelve (12) months ending June 30 shall be transferred to the sinking fund, and used by

the board only for the redemption or purchase of outstanding bonds, in which case such

bonds shall be canceled, or for the creation and maintenance of a cas h working fund, or

the creation and maintenance of a fund for improvement and extension of the system, or

for the reduction of rates, or the board, after the original cost of the property shall have

been fully paid and satisfied may, in its sole discretion , use, apply and pledge all or a part

of such surplus revenues for the acquisition, construction, maintenance, improvement,

addition to and operation of any "public project" as the same is defined in subsection (1)

of KRS 58.010, or for the purpose of purc hasing, paying, retiring, guaranteeing the

payment of or underwriting revenue bonds issued by the city or any agency thereof to

finance the acquisition, construction, maintenance, improvement, addition to and

operation of such "public project," which "publ ic project" shall be located within the

territory served by the board; the board is hereby vested with all of the powers, duties and

responsibilities delegated and granted to a "governmental agency" under KRS 58.020 to

58.140, both inclusive; provided, how ever, that the acquisition or construction of any

"public project" as above defined, shall be first approved by the common council before

such "public project" is undertaken.