The director of finance of each county shall establish as a special deposit in the treasury of the county a sinking fund with which to pay any present or future bonded indebtedness of the county issued under this chapter in the form commonly known as “term bonds”, and may establish the sinking fund with respect to bonds issued under this chapter in the form commonly known as “serial bonds”. The governing body or the director of finance in the case of term bonds shall, and in the case of serial bonds may, provide in the proceedings authorizing the bonds, that for the purpose of retiring the bonds, there shall be transferred from the current receipts of the county provided by law for the purpose or which may be set aside by the governing body for the purpose and deposited to the sinking fund, such a sum of moneys that at such times and in such amounts that the aggregate of the amounts on deposit in the sinking fund will be sufficient to provide for the retirement of the bonds, whether at maturity or upon redemption or purchase, at the times and in the amounts set forth in the proceedings.

Except as otherwise provided by law, the director of finance of each county shall also deposit to the sinking fund, immediately upon the receipt thereof, all premiums received on the sale of bonds under this chapter; provided that the premiums on serial bonds shall be deposited to the interest fund from which the payment of interest on the bonds will be made.

The money deposited in a sinking fund shall be used for the retirement, whether at maturity or upon redemption or purchase, of any outstanding bonds of the county issued under this chapter in accordance with the proceedings authorizing the bonds, and shall be held in trust exclusively for those purposes.