Upon the establishment of the local improvement guarantee fund by the city council, when any bond, warrant or coupon drawn against any local improvement fund is presented to the city for payment and there is not a sufficient amount in the local improvement fund against which to draw to pay it, unless otherwise requested by the holder, payment therefor shall be made by warrant drawn against the local improvement guarantee fund. The warrants, when presented to the city treasurer for payment, if not paid, shall be registered and shall draw interest at a rate not to exceed six percent (6%) per year, as may be fixed by the city council. Neither the holder nor the owners of any bond or warrant issued under the provisions of this chapter shall have any claim therefor, except for payment from the special assessments made for the improvement for which the bond or warrant was issued, and except as against the local improvement guarantee fund provided in this chapter, and the city shall not be liable to any holder or owner of such bond or warrant for any loss to the guarantee fund occurring in the lawful operation thereof by the city. (Ord. 208 § 4, 1962)