Operation of any motor vehicle in excess of a maximum speed limit established for a highway in a residence district of a county, city, or town, when indicated by appropriately placed signs displaying the maximum speed limit and the penalty for violations, shall be unlawful and constitute a traffic infraction punishable by a fine of $200, in addition to other penalties provided by law. No portion of the fine shall be suspended unless the court orders 20 hours of community service. The Commissioner of Highways or any local governing body having jurisdiction over highways shall develop criteria for the overall applicability for the installation of signs. Such criteria shall not exclude highways, functionally classified as minor arterials, serving areas that either (i) were built as residential developments or (ii) have grown to resemble residential developments, provided, in either case, (a) such highways are experiencing documented speeding problems and (b) the local governing body requests the application of this section to such highway. Such signs may be installed in any town and shall not require the approval of the county within which such town is located. Any such signs installed in any town shall be paid for by the town requesting the installation of the signs, or out of the county’s secondary system construction allocation.