(a) It shall not be lawful for:
(1) The board of the district, or any officer, member, or agent thereof, to pledge or deposit any bond or coupon issued under the provisions of this act as security for payment of any borrowed money or any debt or obligation of board or any person, firm, or corporation whatever;
(2) The board of the district, or any officer, member, or agent thereof, to appropriate or use any money arising from the sale of any bond or bonds authorized to be issued under this act for any use or purpose whatever other than is herein specified and expressly directed.
(b) Any member, officer, or agent of the board of the district who shall violate any of the provisions of this section shall be deemed guilty of a felony and upon conviction shall be punished by imprisonment in the penitentiary for not less than one (1) year nor more than five (5) years.
(c) To the payment of both the principal and interest of the bonds to be issued under the provisions of this act, the entire revenues of the district arising from any and all sources and all real estate, railroads, and tramroads subject to taxation in the district are by this act pledged. The board of directors is required to set aside annually from the first revenues collected from any source whatever a sufficient amount to secure and pay the interest on the bonds and a sinking fund for their ultimate retirement if a sinking fund is contracted for.