Said board of directors, within the limitations herein specified, shall have discretion as to the terms, conditions, interest rate and manner of providing for the refunding of said bonds; such bonds shall run for a period not less than twenty years nor more than forty years, and shall bear interest at not to exceed six percent per annum, which interest shall be payable the first day of October and April of each year. The board, in issuing such bonds, shall have the power to provide for the redemption of such bonds serially, or before maturity by lot, at not more than one hundred and five per centum of par value and accrued interest. Such bonds shall be issued subject to all liens created and existing by reason of bonds previously issued or liens created by any contract with the United States made prior thereto. The earnings of such power plants, after the payment of operating expenses, shall be kept intact for the purposes of paying the interest on said bonds, and with the beginning of the eleventh complete fiscal year after the issuance of said bonds, or sooner if the board so determine, the said board of directors of the said irrigation district shall, for the purpose of retiring such issue of bonds, make and provide suitable sinking funds, which sinking fund shall not be less than one per centum of the total issue of bonds, set aside annually, and shall be invested in the bonds of the district, or such securities as are approved for the investment of state school funds, in such manner and at such prices, and upon such terms as it, the said board of directors, may deem expedient.