A. The board of directors, with the consent of the board of supervisors, may invest and reinvest all money belonging or credited to the district as a sinking fund. The investment shall be made for the best interests of the district.

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B. The monies may be invested and reinvested in any of the following:

1. Bonds or other evidences of indebtedness of the United States or any of its agencies or instrumentalities if the obligations are guaranteed as to principal and interest by the United States or by any agency or instrumentality of the United States.

2. Bonds or other evidences of indebtedness of this state or of any county or incorporated city or town or a school district in this state.

3. Bonds, notes or evidences of indebtedness of any county, municipality or municipal district utility in this state that are payable from revenues or earnings specifically pledged for paying the principal and interest on such obligations, and for payment of which a lawful sinking fund or reserve fund has been established and is being maintained, but only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years before the date of investment, or, if such obligations were issued less than five years before the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligations of the issuer within five years before such investment.

4. Bonds, notes or evidences of indebtedness issued by any municipal improvement district in this state to finance local improvements authorized by law, if the principal and interest of such obligations are payable from assessments on real property in the local improvement district. No such investment may be made if the face value of all such obligations, and similar obligations outstanding, exceed fifty per cent of the market value of the real property and improvements on which the bonds or the assessments for the payment of principal and interest are liens inferior only to the liens for general ad valorem property taxes. These investments may be made only if no default in payment of principal or interest on the obligations to be purchased has occurred within five years before the date of investment, or, if such obligations were issued less than five years before the date of investment, no default in payment of principal or interest has occurred on the obligations to be purchased, nor on any other obligation of the issuer within five years before such investment.

5. Interest bearing savings accounts or certificates of deposit insured in banks doing business in this state by the federal deposit insurance corporation, but only if they are secured by the depository to the same extent and in the same manner as required by the general depository law of this state. Security shall not be required for that portion of any deposit that is insured under any law of the United States.

C. The purchase of the securities shall be made by the county treasurer on authority of a resolution by the board of directors that is approved by the board of supervisors. The county treasurer shall be the custodian of all securities so purchased. The securities may be sold on an order of the board of directors with the consent of the board of supervisors.

D. All monies earned as interest or otherwise derived by virtue of this section shall be credited to the sinking fund.