California Code, Public Utilities Code - PUC § 99288

(a) Any city, county, or transit district may enter into a contract with any operator, except with an included municipal operator unless specifically approved by the governing body of the transit district in whose area the included municipal operator is located, for the operator to provide public transportation service in the city, county, or transit district.  In that case, the operator providing the service may include the claim of the city, county, or transit district, as the case may be, with its claim.  The claim may include an amount for reimbursement of the actual costs incurred by the city, county, or transit district for the administration, review, and monitoring of the contract.  The amount so claimed shall not exceed 5 percent of the total amount of the contract for public transportation service in the city, county, or transit district.

(b) With the prior express authorization of the department, a transit district may include in its claim a proportional amount for regularly scheduled services outside its boundaries even though the contract specified in subdivision (a) has not been executed.