If you're new (or not) to Python or Web2py, I would suggest:

First: put the functions in the controllers that call them
Second: put the function in "models" if multiple controllers need to call it
Third: local_import() from "modules" if it doesn't need access to the web2py 
environment (pass in "request" if necessary)
Fourth: after looking at "LOAD" and "XML-RPC", consider exec_environment()

I usually try to start simply and increase complexity gradually and (only) 
as needed.

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