Cal. Water Code § 74615

When, in furtherance of a contract made with the United States, bonds of a district are authorized, such bonds may be transferred to or deposited with the United States, at not less than their par value. In such case, the interest or principal, or both, of such bonds may be legally paid to the United States and applied to the amount, or any part thereof, to be paid by the district to the United States, as provided in the contract.