The board has no power, except as provided in this division as to certificates of indebtedness, notes, special assessments, and the issuance of bonds by the district, to incur any debt or liability whatever in excess of the express provisions of this division. Any debt or liability incurred in excess of such express provisions, except as to certificates of indebtedness, notes, special assessments, and the issuance of bonds, is absolutely void.
Financial ProvisionsLimitation on Indebtedness
Section § 74770
This law states that the board is strictly limited in its ability to incur debt or liabilities beyond what this division allows for certain financial instruments like certificates of indebtedness, notes, special assessments, and bonds. Any debts or liabilities outside of these exceptions are completely invalid and unenforceable.
board authority incur debt liabilities
Section § 74771
This law allows the board overseeing a district to incur debt up to a limit of 25 cents for each acre of land within the district. This debt can be for organizational purposes or other approved expenditures. The district can issue warrants (which are like IOUs) that carry a 7% annual interest rate until the district's treasurer has funds to pay them off.
For the purposes of organization, or for any of any purpose for which the board is authorized to expend the collection of the first assessment, an indebtedness not exceeding in the aggregate an amount equivalent of twenty-five cents ($.25) for each acre of land in the district, and it may cause warrants of the district to issue therefor bearing interest at 7 percent per year from date of issue until the treasurer has funds available for the payment thereof.
district debt limit acre assessment organizational expenses
Section § 74772
This section states that the costs associated with setting up an organization, such as attorney fees and other related expenses, must be paid by the district itself.
The expenses of organization, including the fees of attorneys and others employed to conduct the organization proceedings, are a charge upon the district, and are payable by the district.
organization expenses attorney fees district charge
