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[372]

Part of Minutes of the University of Kentucky Board of Trustees

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(b) The Depreciation Reserve Fund Requirement for each Fiscal Year will be determined from a schedule of depreciation and principal requirements caused to be prepared by the Board within 30 days prior to the beginning of such Fiscal Year. Each such schedule of depreciation and principal requirements shall contain the following: (1) The depreciation on all Property, Plant and Equipment of the Operations of the Hospital, assuming no further capital expenditures from the time of calculation, for each Fiscal Year commencing with the Fiscal Year next succeeding that in which the schedule is prepared, as calculated in accordance with generally accepted accounting principles and based upon the most recent Financial Statements, together with the depreciation on depreciable assets acquired during the period from the last Financial Statements to the date of calculation. (2) The principal requirements on Long-Term Indebtedness for each Fiscal Year described in clause (1) above assuming no further issuance of Long-Term Indebtedness and no further reduction in any mandatory redemption requirements for Outstanding Long-Term Indebted- ness from the date of calculation (the "Principal Requirements"). (3) A comparison of depreciation, as shown in (1) above, and the Principal Requirements, as shown in (2) above, showing (A) the Fiscal Years in which depreciation exceeds the Principal Require- ments ("Excess Depreciation Years") and for each Excess Depreciation Year the amount by which depreciation exceeds the Principal Require- ments ("Excess Depreciation") and (B) the Fiscal Years in which the Principal Requirements exceed depreciation ("Depreciation Shortfall Years") and for each Depreciation Shortfall Year the amount by which the Principal Requirements exceed depreciation ("Depreciation Short- fall"). (4) In any Fiscal Year that is an Excess Depreciation Year, one-half ( ) of the excess of depreciation over the Principal Requirements (the "Depreciation Reserve Fund Requirement"). (c) Money held for the credit of the Depreciation Reserve Fund shall be applied as follows: (1) During a Depreciation Shortfall Year the State Treasurer shall transfer from the Depreciation Reserve Fund to the Revenue Fund, an amount equal to the pro rata portion of the Depreciation Shortfall attributable to the Bonds for such Depreciation Shortfall Year and, upon delivery to the State Treasurer of an Officer's Certificate of the Board stating the principal amount due on other Long-Term Indebtedness for such Depreciation Shortfall Year, the date such principal amount is due and that such principal amount has not been paid from any other source, to the Revenue Fund an amount -16-