Government Code – GOV § 970.4

Except as provided in Section 970.6 , the governing body of a local public entity shall pay, to the extent funds are available in the fiscal year in which it becomes final, any judgment, with interest thereon, out of any funds to the credit of the local public entity that are:

(a) Unappropriated for any other purpose unless the use of such funds is restricted by law or contract to other purposes;  or

(b) Appropriated for the current fiscal year for the payment of judgments and not previously encumbered.