A district may issue warrants to pay the formation expenses of the district. The warrants may bear interest at a rate not exceeding 8 percent per year from the date of issue until funds are available to pay the warrants.
Financial ProvisionsWarrants
Section § 71800
This law allows a district to issue warrants, which are formal promises to pay money, to cover the costs of setting up the district. These warrants can accrue interest at a rate of up to 8% annually until the district has the funds to pay them off.
district formation expenses issue warrants interest rate
Section § 71801
This section explains that costs related to forming an entity can include lawyer fees and other similar expenses. However, it specifically states that costs for organizing and conducting an election to form the entity are not covered.
Formation expenses may include the fees of attorneys and others employed to conduct the formation proceedings, but shall not include the expenses of holding and conducting the formation election.
formation expenses attorney fees formation proceedings
