(a) For preliminary expenses and to raise money to do the work or to pay for an improvement already completed, a municipal improvement district board may:

(1) Borrow money not exceeding the estimated cost thereof, including interest on the money borrowed to a date six (6) months subsequent to the estimated date of completion of the work and a reserve not to exceed one (1) year's principal and interest requirements;

(2) To that extent, issue negotiable bonds or certificates of indebtedness bearing interest at rates provided in the resolution authorizing their issuance; and

(3) Pledge and mortgage all uncollected assessments for the payment thereof.

(b)

(1) The board may also issue its negotiable bonds for the purpose of funding or refunding any of the floating debts of the improvement district or any outstanding bonds, including interest thereon due or about to become due, whether or not represented by coupons or interest certificates, theretofore issued to finance the construction of such an improvement already completed, including sewer systems, or to finance any betterments, extensions, or repairs thereto, irrespective of whether the outstanding bonds were originally issued by the improvement district.

(2)

(A) The funding or refunding bonds may be exchanged for the outstanding bonds or interest thereon as provided in this section, or they may be sold and the proceeds thereof used in the retirement of the outstanding bonds and interest.

(B)

(i) It shall be a felony for any officer of the district or any other person to use the proceeds of the funding or refunding bonds for any other purpose than that for which they are issued.

(ii) The party guilty of such a felony shall be punished as provided in §§ 14-88-309, 14-88-310, 14-88-402.

(3) For the repayment of funding or refunding bonds, the board may pledge and mortgage all uncollected assessments.