(A) While the Bond Fund obligations remain outstanding and unpaid, the rates for all services rendered by the system to the city, its citizens, corporations and other consumers shall be reasonable and just, taking into account and consideration the cost and value of the properties constituting the system and the cost of maintaining and operating the same, and the proper and necessary allowances for depreciation thereof, and the amounts necessary for the retirement of all bonds and notes and the accruing of interest on all such obligations as may be issued and outstanding. There shall be charged against all users of the services and facilities of the system, including the city, such rates and amounts as shall be adequate to meet the requirements of this section. Compensation for services rendered to the city shall be charged against the city and payment for same from the corporate funds of the city shall be apportioned as other income and revenues.
(B) The city will not reduce the rates and charges for services rendered by the system without first filing with the City Clerk a written certification prepared by the Chief Financial Officer and verified by an independent third party having a recognized level of expertise in the costing and pricing of utility services and being a certified public accountant or firm of certified public accountants licensed in Kentucky, a consulting engineer or firm of consulting engineers licensed in Kentucky, or an independent agency, such as the Kentucky Rural Water Association (each, an "independent third party"), to the effect that the annual net revenues of the then existing system for the fiscal year preceding the date on which such reduction is proposed, as such annual net revenues are adjusted after taking into account the projected reduction in revenues anticipated to result from such proposed rate decrease, are equal to not less than 140% of the maximum amount of the Bond Fund obligations in any year ("maximum annual debt service").
(C) The city will also cause a report to be filed with the City Clerk within six months after the end of each fiscal year by the Chief Financial Officer and verified by an independent third party, setting forth the percentage ("coverage") of the maximum annual debt service produced or provided by the net revenues of the system in that fiscal year; and if and whenever such report so filed shall establish that such coverage of net revenues for such fiscal year was less than 120% of the maximum annual debt service, the city shall increase the rates charged the users of the system by an amount sufficient, in the opinion of the Chief Financial Officer, to establish the existence of or immediate accomplishment of such minimum 120% coverage.
(D) For purposes of this section, "NET REVENUES" shall mean gross income and revenues of the system less operating expenses, which shall include salaries, wages, costs of maintenance and operation, materials and supplies, cost of electricity purchased, pumping costs and insurance, as well as all other items that are normally and regularly so included under recognized accounting practices, exclusive of allowance for depreciation. The net revenues may be adjusted for the purpose of the foregoing computations to reflect any revision in the schedule of rates or charges being imposed at the time of calculation, and also to reflect any increase in such net income and revenues by reason of the extensions, additions and improvements to the system the cost of which (in whole or in part) is to be paid through the issuance of additional bonds; but such latter adjustments shall only be made if contracts for the immediate construction or acquisition of such extensions, additions and improvements have been or will be entered into before the issuance of such additional bonds. All such adjustments shall be based upon a written certification of the Chief Financial Officer and verified by an independent third party.
(Ord. B2010-09, passed 6-15-09)