Sec 15-1684. Refunding bonds

The board shall have power, and is hereby authorized from time to time, to issue refunding bonds:

1. To refund unpaid matured bonds.

2. To refund unpaid matured coupons evidencing interest upon its unpaid matured bonds.

3. To refund interest at the coupon rate upon its unpaid matured bonds that has accrued since the maturity of those bonds, provided that such refunding bonds may be exchanged for the bonds to be refunded on a par for par basis of the bonds, interest coupons and interest not represented by coupons, if any, or may be sold at not less than par, or may be exchanged in part and sold in part, and the proceeds received at any such sale shall be used to pay the bonds, interest coupons and interest not represented by coupons, if any, and all bonds and interest coupons which have been received in exchange or paid shall be cancelled and the obligation for interest not represented by coupons which has been discharged shall be evidenced by a written acknowledgment of the exchange or payment thereof.

4. To refund bonds at or prior to their maturity or which by their terms are subject to redemption before maturity, or both, in an amount necessary to refund the principal amount of the bonds to be refunded, the interest to accrue up to and including the maturity date or dates or to the next succeeding redemption date thereof, and the applicable redemption premiums, if any, and may be exchanged for not less than an equal principal amount of bonds to be refunded or may be sold as the board shall determine, or may be exchanged in part and sold in part, and all proceeds received at the sale thereof, excepting the accrued interest received, shall be used:

(a) If the bonds to be refunded are then due, for the payment thereof.

(b) If the bonds to be refunded are voluntarily surrendered with the consent of the holder or holders thereof, for the payment thereof.

(c) If the bonds to be refunded are then subject to prior redemption at the option of the board and if such option has been exercised, for the redemption thereof.

(d) If the bonds to be refunded are not then subject to payment or redemption, or if the bonds are subject to prior redemption and the board chooses to defer exercising the option to a later date or chooses to exercise the option at any prior redemption date and sets the date for such redemption or chooses not to exercise such option, to invest the proceeds received at the sale in obligations issued by or guaranteed by the United States of America or any department, agency or instrumentality thereof, that will mature at such time or times, with interest thereon or the proceeds received therefrom, to provide funds adequate to pay when due or called for redemption prior to maturity the bonds to be refunded, or the bonds issued to refund the bonds to be refunded, together with the interest accrued thereon and any redemption premium due thereon, and such proceeds or obligations of the United States of America shall, with all other funds legally available for such purpose, be deposited in escrow with a banking corporation or national banking association with power to accept and execute trusts, or any successor thereto, which is also a member of the federal deposit insurance corporation and of the federal reserve system, to be held in an irrevocable trust solely for and until the payment and redemption of the bonds so to be refunded, and any balance remaining in such escrow after the payment and retirement of the bonds to be refunded shall be used and held for use by such board as revenues pledged for the payment of such refunding bonds.

(e) For any combination thereof as provided in subdivisions (a) through (d).