The legislative body of a local agency may issue a new bond similar to the original to replace it if:
(a) By competent proof it is made to appear to the legislative body that a bond issued by the local agency is lost or destroyed.
(b) The owner gives an undertaking approved by the legislative body to indemnify the local agency against any loss incurred on account of the bond.
(c) The owner pays all cost of the issuance of the new bond.