A. All money received by the municipality from any special assessment or assessment within an improvement district shall be held in a special fund and used to:
(1) pay the cost of the improvement for which the assessment was made;
(2) reimburse the municipality for any work performed by the municipality in constructing the improvement and for administrative costs associated with the improvement district; or
(3) pay the interest and principal due on any outstanding bonds or assignable certificates.
B. Any person who uses money in an improvement district fund other than as provided in this section is guilty of a felony and shall be punished by a fine not exceeding one thousand dollars ($1,000) or by imprisonment in the state penitentiary for not more than two years or by both such fine and imprisonment in the discretion of the court.