Appellants instituted this declaratory judgment action in behalf of themselves and other taxpayers similarly situated, CR 23.01, to test the validity of a proposed method of financing a “Downtown Urban Renewal Project” in Lexington. The trial court received proof by depositions and entered judgment sustaining the city’s actions.
On April 1, 1965, the Board of Commissioners of Lexington adopted Ordinance No. 5144 describing an area in downtown Lexington and declaring it to be a blighted, deteriorated, or deteriorating area appropriate for an urban renewal project. KRS 99.530(1). The ordinance ratified a proposal of the Urban Renewal and Community Development Agency of the city (hereinafter called the Agency) for the preparation of surveys and plans for an urban renewal project embracing the area, approved the proposed financing plan on the basis of a capital grant of three-fourths of the cost thereof by the U. S. Housing and Home Finance Administrator (HHFA), 42 U.S. C.A. § 1453, and appropriated $37,000 to the *596Agency for use in going forward with the plans.
On April 22, 1965, the Board of Commissioners adopted Ordinance No. 5159, which is the ordinance under attack. It recites that one of its purposes is to induce HHFA and the Agency to establish an urban renewal project in the proposed Urban Renewal Area. Recognizing that it would be necessary to issue revenue bonds to fund the city’s portion of the expense, and further acknowledging that anticipated direct revenues (if any) from the project will not suffice to that end, the ordinance provides that “ * * * it will be necessary to pledge all occupational license fees derived from the area * * * if and when such fees are received. * * * ” The city’s Director of Finance is directed to make separate accounting of and segregate all occupational license fees derived from the area, beginning July 1, 1965, and to hold such monies for appropriate disbursement for the intended purposes of the ordinance.
Ordinance No. 5159 was enacted pursuant to KRS 82.105 to 82.180 and expressly “finds that' all occupational license fees derived from the described area, do, in fact, directly relate to the project, and by reason of increased or continued employment, will result in, and do constitute, increased receipts in the sense of ICRS 82.145 (2b).”
Evidence revealed that for 1964 the 1(4% occupational license fees collected from the proposed urban renewal area under an existing ordinance amounted, in round figures, to $231,000 out of a city-wide total of $3,222,000. It is beyond cavil that the continued exodus, already substantial, of commercial enterprises leaving for more favorable locations will materially reduce the volume of business and employment in the area, and hence the occupational license fees collectible therefrom, unless it is rehabilitated. However, it is obvious that no one can predict in advance the rate and eventual extent of such decline, from which it follows that there is and will be in the future no way to distinguish between revenues that would have been realized anyway and those that result from the rehabilitation project.
The prime immediate objective toward achieving the ultimate purpose of the program is the removal of extensive railroad tracks from the “core area” of Lexington. The evidence substantially establishes that these railroad lines have throttled progressive development of the heart of Lexington and that there is little or no hope of a remedy except through the means now being pursued.
Appellants present these basic questions: (1) Does the project constitute a “governmental project” within the meaning of KRS 82.105 to 82.180? (2)- If so, can the city pledge occupational license fees derived from the area to payment of bonds issued to finance the project? (3) May all such fees be segregated and pledged, or only that portion thereof which may somehow be identified as derived from new business and employment in the area?
The first of these questions is pretty well answered on the face of the statute, which defines a governmental project as “any building, structure, installation, activity, undertaking or program proposed by a governmental agency in furtherance of any lawful governmental or proprietary function of a governmental agency.” KRS 82.105(4). Any doubt as to whether an urban renewal project qualifies as such an “undertaking or program” is eliminated by KRS 82.120, the first sentence of which says, “A city may exercise all or any of the powers conferred upon it in KRS 82.-105 to 82.180 as incidents to the exercise of its urban renewal and/or urban redevelopment functions authorized and contemplated in and by KRS Chapter 99, or otherwise.”
Appellants suggest that this legislation envisioned only governmental projects that employ personnel, such as the IRS data processing center in Grimm v. Moloney, Ky., 358 S.W.2d 496 (1962). Conceding that the immediate purpose of the statute *597may have been to make it possible for the City of Covington to land the data processing center, it is nevertheless readily evident that its drafters were more far-sighted than to limit its application to the exigencies of that particular case. We think the language of the statute definitely refutes this contention.
The second and third questions are so interrelated that they are best discussed as one. They turn on the construction of KRS 82.145(2) (b), the pertinent provision of which is as follows:
“If * * * the city shall make a legislative finding of fact, as recited in the body of the ordinance authorizing issuance of the bonds, that the governmental project is of such nature as to provide increased revenues to the city by reason of increased employment and resulting increased receipts from occupational license fees * * * then the city may pledge and covenant that it will cause to be deposited in said separate and special fund the receipts which may be definitely identified as accruing from such occupational license fees * * * by reason of employment in or directly related to the governmental project,” etc.
The ordinance does not bind the city to continue for any period of time the imposition of occupational license fees. Hence there is no question of an unvoted debt within the proscription of Const. §§ 157 and 158. Cf. Grimm v. Moloney, Ky., 358 S.W.2d 496, 499-500 (1962); Turnpike Authority of Kentucky v. Wall, Ky., 336 S.W.2d 551, 557-558 (1960). The only problem here is one of statutory intent.
The city has made the requisite legislative finding, and no one suggests it is arbitrary, that the project is “of such nature as to provide increased revenues to the city by reason of increased employment and resulting increased receipts from occupational license fees.” Therefore, it has express authority to pledge “the receipts which may be definitely identified as accruing from such occupational license fees * * * by reason of employment in or directly related to the project.” The real question in the case is whether this means all of the occupational license receipts collected from employment in the area of the project or only such portion thereof as can reasonably be identified as revenue that would not have existed except for the project.
There is room for difference of opinion, of course, but our conclusion is that a strictly literal construction of KRS 82.145(2) (b) favors the city’s viewpoint. True, the city must first find that the project will bring increased receipts from occupational license fees, but when it has done that the statute does not say it may pledge only these increased receipts. It says the city may pledge “the receipts.” What receipts.? All occupational license receipts that can be definitely identified as accruing “by reason of employment in or directly related to the governmental project.”
Except for the circumstance that in Grimm v. Moloney, Ky., 358 S.W. 496 (1962), most cr all of the anticipated occupational license receipts would represent “new money” we descry no basis for the notion that only new money or new employment can come within the purview of the pledge authorized by this statute. As heretofore observed, clearly the law was not tailored to the figure of that case alone.
Further construing the statute in the light of its obvious purpose, we are of the opinion that “employment in” the project means employment in the territory formally embraced by the project. Just what “directly related” may be taken to mean is a question that does not confront us in this particular case.
It may be suggested that since the project must be in existence before any receipts can arise by reason of employment in it, and since Ordinance No. 5159 encompasses all receipts from the project area beginning *598July 1, 1965, the project already exists and is no longer to be “induced,” from which it follows that the city has no authority under KRS 82.-105 to 82.180 to issue revenue bonds (the whole purpose of the statute being to induee the establishment of the project). It must be remembered, however, that the object-of the chase is federal money, or, to say it more politely, federal participation. Without that the project evaporates. That the project technically is established by ordinance before HHFA finally approves it and joins in the financing is really immaterial, because until that time it is essentially contingent. If it falls through, the receipts set aside in anticipation of its success will revert to the city’s general fund.
One other circumstance not thus far mentioned in this opinion bears comment. The territory designated for inclusion in the project is not confined to the long, narrow strip occupied by the railroad facilities, but extends over to embrace the business houses on -one side of Main Street. It may be that this -is not strictly necessary from the standpoint of rehabilitation. In fact, it would be naive not to recognize that this valuable property on Main Street was included with an eye to the occupational license revenue it will be able to contribute. But the area a city chooses to place in an urban renewal project is primarily, if not exclusively, a matter of legislative discretion in which the courts have no legitimate power to interfere unless the action is so unreasonable that it can be called arbitrary and in violation of Const. § 2. Cf. Fowler v. Obier, 224 Ky. 742, 7 S.W.2d 219 (1928). It is not contended that the city has so acted in this instance.
The judgment is affirmed.