The legislative body of any city, except a city and county, may provide for the funding or refunding of outstanding indebtedness pursuant to this article, if either of the following conditions exist:
(a) The city has an outstanding indebtedness evidenced by bonds, warrants, notes or other evidences of indebtedness, or a judgment.
(b) Any department, board, or special fund of the city has an outstanding indebtedness evidenced by bonds, warrants, or notes or other evidences of indebtedness, and such indebtedness has been created for a purpose for which bonds of the city could have been lawfully authorized and issued.