(a) Prior to July 1 each year, the officers of the board shall submit to the district for adoption a preliminary budget required for the operation of the district during the ensuing calendar year, which shall also be the fiscal year.

(b) Funding for the district operations shall be derived from the following sources:

(1) Dues paid by cities and counties within the district such that the aggregate total of all such dues from all such cities and counties shall be no less than $1 million annually. Such fees shall be raised on a per capita assessment or water-usage fee basis or based on a formula adopted and approved by the local government members of the district; and

(2) Appropriated or contracted state funds.

(c) The district is specifically empowered to contract or otherwise participate in and to accept grants, funds, gifts, or services from any federal, state, or local government or its agencies or instrumentalities and from private and civic sources and to expend funds received therefrom under provisions as may be required and agreed upon by the district in connection with any program or purpose for which the district exists.

(d) All funds of the district not otherwise employed shall be deposited from time to time to the credit of the district in such banks, trust companies, or other depositories as the district may select.