Chapter 6. Finances of California Health And Safety Code >> Division 8. >> Part 4. >> Chapter 6.
(a) On or before August 30 of each year, the board of
trustees shall adopt a final budget, which shall conform to the
accounting and budgeting procedures for special districts contained
in Subchapter 3 (commencing with Section 1031.1) of, and Article 1
(commencing with Section 1121) of Subchapter 4 of Division 2 of Title
2 of the California Code of Regulations.
(b) The board of trustees may divide the annual budget into
categories, including, but not limited to:
(1) Maintenance and operation.
(2) Employee compensation.
(3) Interest and redemption for indebtedness.
(4) Restricted reserves for the following categories:
(A) Endowment income fund.
(B) Capital outlay.
(5) Unallocated general reserve.
(c) The board of trustees shall forward a copy of the final budget
to the auditor of each county in which the district is located.
(a) In its annual budget, the board of trustees may establish
one or more restricted reserves. When the board of trustees
establishes a restricted reserve, it shall declare the exclusive
purposes for which the funds in the reserve may be spent. The funds
in the restricted reserve shall be spent only for the exclusive
purposes for which the board of trustees established the restricted
reserve. The reserves shall be maintained according to generally
(b) Any time after the establishment of a restricted reserve, the
board of trustees may transfer any funds to that restricted reserve.
(c) If the board of trustees finds that the funds in a restricted
reserve are no longer required for the purpose for which the
restricted reserve was established, the board of trustees may, by a
four-fifths vote of the total membership of the board of trustees,
discontinue the restricted reserve or transfer the funds that are no
longer required from the restricted reserve to the district's general
(a) On or before July 1 of each year, the board of trustees
shall adopt a resolution establishing its appropriations limit and
make other necessary determinations for the following fiscal year
pursuant to Article XIII B of California Constitution and Division 9
(commencing with Section 7900) of the Government Code.
(b) Pursuant to subdivision (c) of Section 9 of Article XIII B of
the California Constitution, this section shall not apply to a
district that existed on January 1, 1978, and that did not, as of the
1977-78 fiscal year, levy an ad valorem tax on property in excess of
twelve and one-half cents ($0.125) per one hundred dollars ($100) of
The auditor of each county in which a district is located
shall allocate to the district its share of property tax revenue
pursuant to Chapter 6 (commencing with Section 95) of Part 0.5 of
Division 1 of the Revenue and Taxation Code.
(a) A district may accept any grants, goods, money, property,
revenue, or services from any federal, state, regional, or local
agency or from any person for any lawful purpose of the district.
(b) Except as provided by Section 9077, all moneys received or
collected by a district shall be paid into a separate fund in the
county treasury on or before the 10th day of the month following the
month in which the district received or collected the money.
(c) In addition to any other existing authority, a district may
borrow money and incur indebtedness pursuant to Article 7 (commencing
with Section 53820), Article 7.4 (commencing with Section 53835),
Article 7.5 (commencing with Section 53840), Article 7.6 (commencing
with Section 53850), and Article 7.7 (commencing with Section 53859)
of Chapter 4 of Part 1 of Division 2 of Title 5 of the Government
All claims for money or damages against a district are
governed by Part 3 (commencing with Section 900) and Part 4
(commencing with Section 940) of Division 3.6 of Title 1 of the
(a) All claims against a district shall be audited, allowed,
and paid by the board of trustees by warrants drawn on the county
(b) As an alternative to subdivision (a), the board of trustees
may instruct the county treasurer to audit, allow, and draw his or
her warrant on the county treasury for all legal claims presented to
him or her and authorized by the board of trustees.
(c) The county treasurer shall pay the warrants in the order in
which they are presented.
(d) If a warrant is presented for payment and the county treasurer
cannot pay it for want of funds in the account on which it is drawn,
the treasurer shall endorse the warrant, "NOT PAID BECAUSE OF
INSUFFICIENT FUNDS" and sign his or her name and the date and time
the warrant was presented. From that time until it is paid, the
warrant bears interest at the maximum rate permitted pursuant to
Article 7 (commencing with Section 53530) of Chapter 3 of Part 1 of
Division 2 of Title 5 of the Government Code.
(a) Notwithstanding Section 9076, a district that has total
annual revenues greater than five hundred thousand dollars ($500,000)
may withdraw its funds from the control of the county treasurer
pursuant to this section.
(b) The board of trustees shall adopt a resolution that does each
of the following:
(1) States its intent to withdraw its funds from the county
(2) Adopts a procedure for the appointment of a district
treasurer. The board of trustees may appoint the district treasurer.
The board of trustees may appoint the district treasurer, or the
board of trustees may delegate the appointment of the district to the
district's general manager. The district treasurer may be a member
of the board of trustees, the secretary of the board of trustees, the
general manager, or a district employee.
(3) Fixes the amount of the bond for the district treasurer and
other district employees who will be responsible for handling the
(4) Adopts a system of accounting and auditing that shall
completely and at all times show the district's financial condition.
The system of accounting and auditing shall adhere to generally
accepted accounting principles.
(5) Adopts a procedure for drawing and signing warrants, provided
that the procedure adheres to generally accepted accounting
principles. The procedures shall provide that bond principal and
salaries shall be paid when due. The procedure may provide that
warrants to pay claims and demands need not be approved by the board
of trustees before payment if the district treasurer determines that
the claims and demands conform to the district's approved budget.
(6) Designates a bank or a savings and loan association as the
depositary of the district's funds. A bank or savings and loan
association may act as a depositary, paying agent, or fiscal agency
for the holding or handling of the district's funds, notwithstanding
the fact that a member of the board of trustees whose funds are on
deposit in that bank or savings and loan association is an officer,
employee, or stockholder of that bank or saving and loan association,
or of a holding company that owns any of the stock of that bank or
savings and loan association.
(c) The board of trustees and the board of supervisors of the
principal county shall determine a mutually acceptable date for the
withdrawal of the district's funds from the county treasury, not to
exceed 15 months from the date on which the board of trustees adopts
(d) In implementing this section, the district shall comply with
Article 1 (commencing with Section 53600) and Article 2 (commencing
with Section 5360) of Chapter 4 of Part 1 of Division 2 of Title 5 of
the Government Code. Nothing in this section shall include the
district treasurer from depositing the district's funds in the county
treasury of the principal county or the State Treasury pursuant to
Article 11 (commencing with Section 16429.1) of Chapter 2 of Part 2
of Division 4 of Title 2 of the Government Code.
(e) The district treasurer shall make annual or more frequent
written reports to the board of trustees, as the board of trustees
shall determine, regarding the receipts and disbursements and
balances in the accounts controlled by the district treasurer. The
district treasurer shall sign the reports and file them with the
A district may, by resolution, establish a revolving fund
pursuant to Article 15 (commencing with Section 53950) of Chapter 4
of Part 1 of Division 2 of Title 5 of the Government Code. The
maximum amount of the revolving fund shall not exceed either of the
(a) One thousand dollars ($1,000) if the purpose of the revolving
fund is to make change and pay small bills directly.
(b) One hundred ten percent of one-twelfth of the district's
adopted budget for the current fiscal year if the purpose of the
revolving fund is to pay any authorized expenditures of the district.
(a) The board of trustees shall provide for regular audits of
the district's accounts and records and the district's endowment
care fund pursuant to Section 26909 of the Government Code.
(b) The board of trustees shall provide for the annual financial
reports to the Controller pursuant to Article 9 (commencing with
Section 53890) of Chapter 4 of Part 1 of Division 2 of Title 5 of the