Cities and towns may accept warrants drawn against any local improvement fund upon such conditions as they may by ordinance or resolution prescribe, in satisfaction of:

(1) Assessments levied to supply such fund, in due order of priority of right;

(2) Judgments rendered against property owners who have become delinquent in the payment of assessments levied to supply such fund; and

(3) In payment of certificates of purchase in cases where property of delinquents has been sold under execution or at tax sale for failure to pay assessments levied to supply such fund.