California Streets and Highways Code
In the event that the cost and expense of the improvement work payable by the real estate benefited by such work exceeds the construction costs set forth in the contract, because of an act or omission of the legislative body or its superintendent of streets, officers, or employees occurring prior to the award of the contract which subjects the legislative body to liability pursuant to Division 3.6 (commencing with Section 810), Title 1 of the Government Code, the legislative body may settle this liability out of court, or may pay a judgment rendered by the court as to this liability, by a payment out of the General Fund or by an additional assessment.
In the event payment is to be made by an additional assessment, the additional assessment shall be made and collected, and notice thereof shall be given in the same manner, as nearly as may be, as in the case of the original assessment. The superintendent of streets shall prepare and file with the additional assessment, a diagram showing the lots or parcels of land deemed by him to have been benefited by the work. The superintendent of streets shall assess the additional assessment upon the several lots or parcels of land shown in such diagram in the proportion to the estimated benefits to be received by each of the several lots or parcels of land.
Sections 5366, 5367, 5368, 5369 and 5372 of this code shall apply to the additional assessment except that the objections, appeals or protests referred to in Section 5366 shall be limited to the matter of the cost of liability and not relate to the work, acquisition or improvement.
The lien of an additional assessment, whether bonds issued to represent the additional assessment or otherwise, shall be subordinate to all special assessment liens previously imposed upon the property, but it shall have priority over all special assessment liens which may thereafter be created against the property; and from and after the date of the recording of any warrant, special assessment and diagram, all persons shall be deemed to have notice of the contents thereof.