2009 California Water Code - Section 11780-11784 :: Article 8. Retirement Of Bonds

11780.  Any surplus which exists in the construction fund shall be
applied to the retirement of bonds issued for construction of the
project by purchase or call.

11781.  In the event the bonds cannot be purchased at a price
satisfactory to the department and are not by their terms callable
prior to maturity such surplus shall be paid into the fund applicable
to the payment of principal and interest of the bonds and shall be
used for that purpose.

11782.  The proceedings authorizing the issuance of bonds may
provide limitations and conditions upon the time and manner of
applying such surplus to the purchase and call of outstanding bonds.

11783.  The terms upon which the bonds shall be purchased or called
and such limitations and conditions as are mentioned in the preceding
section shall be followed and observed in the application and use of
such surplus.

11784.  All bonds retired by purchase or call shall be immediately
canceled.