When the capital outlay notes are issued and sold, they shall be direct obligations of the local government, the payments of which shall be made according to the tenor and effect thereof, to which shall be pledged the taxing power of the local government as to all taxable property in the local government. The governing body is hereby authorized to levy and provide for the collection of a special tax over and above all other taxes authorized or limited by law to be imposed and levied on all the taxable property in the local government to create a sinking fund to retire such notes with interest as they fall due. Capital outlay notes issued for an income producing public works project may be additionally secured by and payable from revenues of such public works project.