Whenever there is in the redemption fund two thousand dollars ($2,000) or more available for the payment of principal of bonds, and not collected for the purpose of paying the principal of bonds maturing on the next second day of July, the city shall purchase or call bonds as provided in this chapter.

The treasurer shall, by notice published once not less than 30 days prior to the date designated in some financial journal having a national circulation, invite sealed proposals for the sale of any of the refunding bonds to the city. The notice shall state the amount available for the purchase of such bonds and shall specify the time and place when proposals will be opened. The treasurer shall also, at least 10 days prior to the date so designated, mail a copy of the invitation for sealed proposals to any bondholder who has theretofore in writing requested such notice.

The proposals for the sale of bonds shall be opened in public at the time and place specified in the notice. The legislative body in its discretion may reject any or all of the proposals.

If no proposals are received at a price of less than par and accrued interest, or if an insufficient amount of bonds are tendered at less than par and accrued interest to exhaust, as nearly as possible, the money available for purchase of bonds, the treasurer shall set aside a sum sufficient to pay the principal and accrued interest to the next interest payment date of the bonds to be called for redemption and shall proceed to call for redemption, in numerical order, at par and accrued interest to the next interest payment date, such outstanding bonds as can be retired from said funds.

Notice of the calling of bonds for redemption shall be given by publication once in a financial journal having a national circulation, unless the holders of the bonds to be called, in writing, waive such notice. The date of publication of notice shall be not less than 30 days prior to the date so fixed for redemption. Interest on the bonds so called shall cease upon the redemption date.

All refunding bonds so purchased or redeemed pursuant to call shall be canceled by the treasurer.

All costs of publication provided for in this chapter shall be payable from the redemption fund.