Colorado Revised Statutes Title 37. Water and Irrigation § 37-26-106. Refunding bonds exchanged--when

The refunding bonds may be exchanged for the outstanding bonds and interest so refunded, or they may be sold, in which latter event, the proceeds shall be used solely for the purpose of paying the principal of and the interest on the bonds refunded, and for improvement of the district. In no event shall the principal amount of refunding bonds issued exceed the amount of outstanding bonds and matured interest coupons surrendered and canceled simultaneously with the issuance of refunding bonds. Any exchange or sale of refunding bonds shall be made in such manner as to cause no loss of interest to the district.