KRS 96.535: Water plant or electric light, heat and power plant of city with population

of 8,000 or more -- Maintenance, operation and depreciation funds for --

Payment of surplus to general fund of city -- Fair return on property.

(1) At the time or before or a fter the issuance of revenue bonds for the acquisition,

extension or maintenance of a system of waterworks or electric light, heat and

power plants in cities with populations equal to or greater than eight thousand

(8,000) based upon the most recent federa l decennial census, which bonds do not

represent the general obligation of the city, the city legislative body shall, by

ordinance, set aside and pledge the income and revenue of any such municipally

owned utility into a separate and special fund to be use d and applied in the payment

of the cost thereof, and in the maintenance, operation and depreciation thereof, and

for the purposes hereinafter set out. The ordinance shall definitely fix and determine

the amount of revenue necessary to be set apart and app lied to the payment of the

principal and interest of the bonds, and the portion of the balance of the income and

revenue to be set aside as a proper and adequate depreciation account, and the

portion to be set aside for the reasonable and proper operation and maintenance of

the utility, and may provide that the surplus not needed for the purposes aforesaid

shall be paid over to and become a part of the general funds of such city. The rates

to be charged for services from the utility shall be fixed and revis ed from time to

time by the board appointed to operate the utility by and with the approval of the

legislative body of the city so as to be sufficient to provide for the payment of

interest upon all bonds and to create a sinking fund to pay the principal t hereof

when due; to provide for the operation and maintenance of the utility and an

adequate depreciation account; and such rates may be fixed as will furnish a fair and

reasonable return to the municipality on the fair value of the used and useful

property of the utility.

(2) Nothing in this section shall apply to electrical plants acquired or operated under

provisions of KRS 96.550 to 96.900.