(a) Any city or town in which an improvement district is established under this chapter may use any funds of the municipality available, including any federal funds, as may be determined by the governing body of the city or town, to make any annual payment of principal and interest or part thereof on bonds, certificates of indebtedness, or other negotiable evidences of debt issued by an improvement district created under this chapter.
(b) However, when the governing body of any such municipality shall pay the annual installment or any portion thereof on bonds issued by the district, the annual installments on assessments upon property in the district shall not be extended and collected for that year or shall be reduced proportionately as the case may be.
(c) Notice of the amount assessments shall be reduced shall be filed with the county clerk before November 1 of the year preceding the year assessments are collected.