{"data":{"id":"us-ky/krs-107.090","jurisdiction":"us-ky","citation":"KRS 107.090","heading":"Third ordinance -- Purpose -- Adoption.","body":"(1) Upon compliance with KRS 107.080 the governing body may adopt an ordinance,\nhereinafter referred to as the \"Third Ordinance\":\n(a) Finally authorizing the issuance of bonds of the city which shall be designated\n\"Improvement Assessment Bonds\" and shall, in a ddition, identify the project\nby name of streets, number, or otherwise;\n(b) Determining the principal amount thereof;\n(c) Establishing the denominations and maturity dates thereof, which may be term\nor serial maturities, not to exceed thirty (30) years from date of issue;\n(d) Levying an annual assessment effective only upon the benefited properties,\naccording to their respective assessed values as determined for the purposes of\ngeneral city taxation, but without regard to any constitutional or other limits\notherwise applicable to taxation for general city purposes, the annual rate of\nsuch improvement assessment to be fixed when city taxes are levied, and to be\nsufficient in each year to provide for the payment of such bonds and interest\ncoupons as they matur e; and, in the case of the first such levy, sufficient to\nprovide, in addition, a sum equal to twenty percent (20%) of average annual\nprincipal and interest requirements, the same to constitute a \"debt service\nreserve\" as a precaution against possible defa ult by reason of failures in the\ncollection of the annual levies, as hereinafter provided;\n(e) Covenanting with the holders of said bonds and coupons, that until the\npayment in full thereof the city will levy annually an improvement assessment\nupon the benefited properties only, as provided in the foregoing subsection (d)\nhereof;\n(f) Covenanting with the holders of said bonds and coupons, that until payment in\nfull thereof, the city will pursue and exhaust, at the city's expense, all remedies\navailable to t he city and for the benefit and protection of the bondholders,\nincluding enforcement to judgment and decretal sale of the liens upon\nbenefited properties, as provided in this chapter;\n(g) Designating one (1) or more places of payment of principal and inter est,\nwithin or without the Commonwealth;\n(h) Specifying, or omitting, provisions for redemption and payment prior to stated\nmaturities, and the terms thereof;\n(i) Providing for the payment by the city of any and all reasonable and customary\ncharges for the  services of paying agents, to the end that the holders of the\nbonds and coupons will receive the sums therein stipulated, without\ndeductions for such charges; and\n(j) Any other provisions not contrary to law.\n(2) Following compliance with the foregoing pr ovisions of KRS Chapter 107 for a\nwastewater collection project undertaken by a metropolitan sewer district, the board\nof the district may adopt a third ordinance which shall make those provisions set\nforth in this subsection.\n(a) The third ordinance shall determine and confirm:\n1. The nature and scope of a project;\n2. The real properties to be benefited, which shall be all benefited\nproperties identified in the first ordinance and the sec ond ordinance,\nexcepting properties for which lump -sum payment of improvement\nbenefit assessment levies had been made within the statutory period;\n3. The exact method of assessment of the benefited properties; and\n4. The costs of the project;\n(b) The third  ordinance shall authorize the issuance of bonds of the district\nperiodically. The bonds shall be designated \"improvement lien bonds\" and\nshall additionally identify the project by reference to its name or title;\n(c) The third ordinance shall determine the  principal amount of the bond issue,\nsubject to the provisions of KRS 107.210;\n(d) The third ordinance shall establish the denominations and maturity dates of\nthe bonds. The bonds may be term or serial maturities not to exceed thirty (30)\nyears from the date of issue, and may provide for the issuance of the bonds in\nseries, each such series to be equally secured without preference as to\nbondholders by improvement benefit assessments levied on all benefited\nproperties and by liens in respect thereto;\n(e) The third ordinance shall levy an annual improvement benefit assessment on\nthe benefited properties, for which lump -sum payments were not made,\npursuant to the assessed value basis according to either:\n1. Their respective assessed land values as determined fo r purposes of\ngeneral ad valorem taxation; or\n2. Upon a basis of equality by zones, pursuant to findings of fact by the\nboard that benefited properties in particular zone classifications are to be\ntreated equally for assessment purposes because of substant ial equality\nof benefits conferred.\nThe assessments may be made without regard to any constitutional or other\nlimits otherwise applicable to taxation for general ad valorem purposes. The\nannual rate of the improvement assessment shall be fixed when regular county\nad valorem taxes are levied and shall be sufficient in each year to provide for\nthe payment of the bonds and interest coupons as they mature. In each year,\nuntil accrual of the debt service reserve requirement, the annual rate shall be\nsufficiently large to provide an additional sum equal to twenty percent (20%)\nof maximum principal and interest requirement, which additional sum shall\nconstitute a debt service reserve fund as a precaution against possible default\nby reason of failures in the collection of the annual levies; provided, however,\nthat if the district shall have provided by the third ordinance that the debt\nservice reserve requirement be financed from bond proceeds as one of the\ncosts of the project, the additional annual benefit assessm ent shall be omitted,\nbut additional levies shall promptly be instituted at any time necessary to\nmaintain the debt service reserve requirement at its prescribed level;\n(f) The third ordinance shall covenant with the holders of the bonds and coupons\nthat until their payment in full, the district shall levy annually an improvement\nbenefit assessment upon each and every benefited property, as provided in\nsubsection (2)(e) of this section; provided, however, the district may provide\nby order that certain benef ited properties be omitted from assessment during\ninitial periods not to exceed three (3) years because of construction\nscheduling;\n(g) The third ordinance shall covenant with the holders of the bonds and coupons\nthat until payment in full, the district sh all pursue and exhaust at the district's\nexpense all remedies available to the district for the benefit and protection of\nthe bondholders. These remedies include both termination of water service to\ndelinquent real properties and enforcement to judgment an d sale of the liens\nupon benefited properties which are granted by this chapter;\n(h) The third ordinance shall designate one or more places of payment of\nprincipal and interest within or without the Commonwealth;\n(i) The third ordinance shall specify or om it provisions for redemption and\npayment prior to stated maturities and the terms thereof;\n(j) The third ordinance shall provide for the payment by the district of all\nreasonable and customary charges for the services of trustees and paying\nagents to the e nd that the holders of the bonds and coupons will receive the\nsums stipulated without deduction for such charges; and\n(k) The third ordinance may contain any other provisions not contrary to law. The\ndistrict is expressly empowered to finance any particular project by an issue of\nbonds which may be sold and delivered in one or more series. Each series\nshall be equally and indistinguishably secured, as provided in KRS Chapters\n76 and 107, by improvement benefit assessments levied upon all benefited\nproperties and by liens granted for the security of bondholders by KRS\nChapters 76 and 107 on benefited properties. The assessments and liens shall\napply to each benefited property and in favor of each bond of each series\nwhenever issued.\n(3) In the discretion of t he board of a metropolitan sewer district relating to a\nwastewater collection project, any improvement lien bonds or bond anticipation\nnotes issued under KRS Chapters 76 and 107 may be secured by a trust indenture\nbetween the district and a corporate trust ee, which may be any trust company or\nbank having the powers of a trust company within or without the Commonwealth of\nKentucky. The trust indenture may pledge or assign for the security of the\nimprovement lien bonds or notes all or any part of the proceeds  of improvement\nbenefit assessments received by the district. The trust indenture shall contain any\nprovisions for protecting and enforcing the rights and remedies of the bondholders\nas may be reasonable, proper and not in violation of law, including:\n(a) Covenants setting forth the duties of the district in relation to the purposes to\nwhich improvement lien bond proceeds may be applied;\n(b) The disposition and pledging of receipts of improvement benefit assessments;\nand\n(c) The custody, safeguarding and ap plication of all improvement benefit\nassessment revenues. It shall be lawful for any Kentucky bank or trust\ncompany acting as depository of the proceeds of bonds, notes or district\nrevenues, to furnish indemnity bonds or to pledge securities as required by  the\ntrust indenture of the district. Any trust indenture may set forth the rights and\nremedies of the bondholders and indenture trustee and it may restrict the\nindividual right of action by bondholders. In addition, any trust indenture may\ncontain such ot her provisions as the district may determine to be reasonable\nfor the further security of the holders of the bonds. All expenses of the trust\nindenture shall be treated as a part of the costs of the project and shall be paid\nfrom either the proceeds of the bonds or improvement benefit assessments.\n(4) All bonds issued by metropolitan sewer districts under the provisions of KRS\nChapters 76 and 107 shall possess all of the qualities and incidences of negotiable\ninstruments under the laws of Kentucky. The bond s may be issued in coupon or in\nregistered form or in both. Provision also may be made for the registration of any\ncoupon bonds as to principal only and also as to both principal and interest and for\nthe reconversion into coupon bonds of any bonds registered as to both principal and\ninterest. The district shall sell the bonds at public sale at a price that will best effect\nthe purposes of KRS Chapters 76 and 107.\n(5) Any metropolitan sewer district initiating a wastewater collection project pursuant\nto KRS Chapters 76 and 107 shall have and possess all powers and the authority set\nforth in KRS 58.150.\n(6) No benefit assessment bonds shall be sold without competitive bidding.","path":["KRS Chapter 107"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=27162","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:09Z","sha256":"7d818d112ce5125eb14513793ee0a878f2bd905740baab7e5d02b10012b6ad1f","source_id":"us-ky","stale":false,"prev":"us-ky/krs-107.085","next":"us-ky/krs-107.100"},"notice":"GroundRules: Original legal text. Not legal advice."}