(1) Judgments against a local government that are not covered by insurance may be paid:
(a) from the general fund; or
(b) from the fund or funds supporting the local government operation that incurred the judgment.
(2) Judgments that are to be paid from the general fund:
(a) must be paid in the current fiscal year if there is sufficient money in the general fund to pay both the judgment and the general fund appropriations for the current fiscal year; or
(b) must be paid from additional tax levies made in each of the next 3 years if general fund money is insufficient to pay the judgment in the current fiscal year.