(1) Any bonds issued for any refunding purpose authorized in section 31-35-402 (1)(j) may either be delivered in exchange for the outstanding bonds authorized to be refunded or may be sold as provided for in section 31-35-404. (2) No bonds may be refunded under this part 4 unless they either mature or are callable for prior redemption under their terms within fifteen years from the date of issuance of the refunding bonds or unless the holders thereof voluntarily surrender them for exchange or payment. The final maturity of the bonds refunded may not be extended over fifteen years. The rates of interest on such refunding bonds shall be determined by the governing body. The principal amount of the refunding bonds may exceed the principal amount of the refunded bonds by such amount or amounts as are useful to effect the refunding if the aggregate principal and interest costs of the refunding bonds for the period ending on the scheduled final maturity date of the bonds refunded, without regard to any redemptions that may be made prior to such scheduled maturity date, do not exceed such unaccrued costs of the bonds refunded for the same time period, excluding from the computation of the aggregate principal and interest cost of the refunding bonds the amount of the principal of any refunding bonds issued to pay any interest in arrears or about to become due on the bonds refunded and to pay any interest on the refunding bonds. (3) The proceeds of refunding bonds shall either be immediately applied to the retirement of the bonds to be refunded or be placed in escrow to be applied to the payment of the bonds upon their presentation therefor. Any escrowed proceeds, pending such use, may be invested or reinvested in securities meeting the investment requirements established in part 6 of article 75 of title 24, C.R.S. Such escrowed proceeds and investments, together with any interest to be derived from any such investment, shall be in an amount at all times sufficient to pay the bonds refunded as they become due at their respective maturities or due at prior redemption dates, as to principal, interest, any prior redemption premium due, and any charges of the escrow agent payable therefrom. (4) Refunding revenue bonds may be made payable from any revenues derived from the operation of any water facilities or sewerage facilities or of both water facilities and sewerage facilities comprising a joint water and sewer system, notwithstanding that the pledge of any such revenues for the payment of the outstanding bonds issued by the municipality which are to be refunded is thereby modified. (5) Bonds for refunding and bonds for any other purpose authorized in this part 4 may be issued separately or issued in combination in one series or more. (6) Except as expressly provided or necessarily implied in this section and in section 31- 35-402 (1)(j), the relevant provisions in this part 4 pertaining to revenue bonds not issued for refunding purposes shall be equally applicable in the authorization and issuance of refunding revenue bonds, including their terms and security, the bond ordinance or resolution, rates, fees, tolls, service charges, and other aspects of the bonds; except that the governing body may include, in determining the amount of the refunding bonds, an amount sufficient to pay interest, which is estimated will accrue on the refunding bonds for a period not exceeding five years from the date of the refunding bonds, and the governing body may pay such interest on the refunding bonds from the proceeds of the refunding bonds. (7) The determination of the governing body that the limitations under this part 4 imposed upon the issuance of refunding bonds have been met shall be conclusive in the absence of fraud or arbitrary and gross abuse of discretion.
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