California Code, Streets and Highways Code - SHC § 130

The department and any county, city, or joint highway district, or any of them, may enter into a contract in respect to the proportion of the expense of the acquisition, construction, improvement or maintenance of any state highway to be borne by the respective parties to such contract. Any such contract may provide for the advancement of funds, for the acquisition of rights of way and for the doing of the work, or any portion thereof, by any party to the contract, pursuant to the laws governing such party with reference to such type of acquisition or such character of work.

Any money appropriated for the acquisition of rights of way for the construction, improvement or maintenance of county highways, city streets, or joint highway district roads may be expended in such acquisition, construction, improvement or maintenance of any state highway located in whole or in part within the limits of such city, county, or joint highway district, pursuant to such contract, and shall be made available therefor by resolution of the governing body of the city, county, or joint highway district, as the case may be.