All special or local improvements except as the Town may contribute to the cost thereof, shall be paid for in public improvement bonds, and all monies collected on account of the assessments for any improvements shall be applied to the payment of the bonds, and interest, issued therefor, until the payment of all the said bonds. Where all outstanding bonds of a special or local improvement district have been paid and any monies remain to the credit of the district, they shall be transferred to a Special Surplus and Deficiency Fund and whenever there is a deficiency in any special or local improvement district fund to meet the payments of outstanding bonds and interest due thereon, the deficiency shall be paid out of said surplus and deficiency fund. Whenever a special or local improvement district has paid and cancelled three-fourths of its bonds issued, and for any reason the remaining assessments are not paid in time to take up the remaining bonds of the district and the interest due thereon, and there is not sufficient monies in the Special Surplus and Deficiency Fund, then the Town shall pay said bonds when due and the interest due thereon, and reimburse itself by collecting the unpaid assessments due said district.