Sts. & Hy. Code, § 10110

Before the ordering of the work, acquisitions, or improvements which are to be owned, managed, or controlled by any other public agency, regulated public utility, or mutual water company, the legislative body shall enter into an agreement with the public agency, public utility, or mutual water company which has, or may have, charge of the works, appliances, or improvements. The agreement may provide for the joint exercise of any power authorized by this division by two or more local agencies authorized to use this division if the legislative body of each participating agency adopts a resolution declaring that the joint agreement would be beneficial to the residents of the area of the agency. A local agency which is a party to the agreement may use the proceeds of any assessment or of any bonds or other indebtedness issued in conjunction with this division pursuant to the agreement to provide facilities which the local agency is otherwise authorized by law to provide, even though another agency which is a party to the agreement does not have the power to provide those facilities. Among other things, the agreement may provide for any of the following:

(a) For the supplying by the public agency, public utility, or mutual water company of plans and specifications in accordance with Chapter 5 (commencing with Section 5170) of Part 3 of Division 7.

(b) For the performance of work or service by the public agency, public utility, or mutual water agency, and the payment to the public agency, public utility, or mutual water company out of the improvement fund for the work or service. Any agreement providing for the performance of work by a public utility or mutual water company may provide for the posting of labor, material, and performance bonds.

(c) For the acquisition by the legislative body of works or appliances already installed and for the conveyance of these works or appliances to the public agency, public utility, or mutual water company. The owner of these works or appliances may be a party to the agreement.

(d) That the agreement shall become effective after proceedings have been taken pursuant to this division and the funds are available to carry out all the terms thereof. Whenever it is proposed to annex to the public agency the territory in which the installation or acquisition is contemplated, proceedings may be taken up to and including the confirmation of the assessment as provided for in Section 10312 prior to the commencement of the annexation proceedings. If the annexation is successful, the assessment shall be recorded and other proceedings taken that may enable the parties to comply with the terms of the agreement. If the annexation proceedings fail, further proceedings under the resolution of intention are barred.

Any agreement entered into pursuant to this section, to the extent that utilities have been financed by special assessments, shall provide that no main extension refund agreement shall be entered into with a developer.