7-31-116. Payment of bonds and other obligations. (1) The faith of the county or incorporated city or town issuing bonds under the provisions of this part is solemnly pledged for the payment of the principal and interest according to the tenure of said bonds and the coupons attached to the same.

(2) The board of county commissioners of the county or council of the incorporated city or town issuing said bonds:

(a) shall ascertain and levy and assess a tax sufficient to pay the interest upon said bonds, which shall become a lien and be collected as other taxes; and

(b) shall form such sinking fund for the payment of the principal thereof as may be necessary and proper, in the manner provided by law or ordinance, which shall be kept as a separate fund.

(3) All bonds, coupons, orders, and warrants issued and drawn under the provisions of this part shall be promptly paid, registered, and entered in books kept for that purpose, with correct and proper entries made in respect thereto, and the same, when paid, shall be canceled and preserved, with proper entries made thereof, as provided by law in cases of other bonds, warrants, and orders.