The District operates primarily from General Tax Revenues, Proposition 172 Public Safety Funds, Special Assessment Funds and Mitigation Funds. The Fire Auxiliary provides invaluable additional financial support by raising funds through community events and buying items for the Department or for firefighters directly that, although needed, do not fit within the budget. From time to time, deeply appreciated citizen donations also assist with special funding needs.

The budget process begins with a Preliminary Budget, prepared by the Finance Committee to cover the next fiscal year from July 1 to June 30, and presented to the Board for approval in June of each year. If needed, a Revised Preliminary Budget is prepared and approved by the Board in October.

The bulk of the District's operating funds is paid through the Nevada County Tax office, and arrives in the District's account in December. A Proposed Budget is then prepared, reflecting several months' spending experience and the actual funding from the County. This budget is approved as the Adopted Budget by the Board in January. A Revised Adopted Budget is usually drafted in April and approved by the Board in May.

A Final Budget reflecting actual income is presented to the Board for approval in June. The purpose of this budget is to ensure that all major expenditure categories have sufficient funds to cover expenses through the end of the fiscal year.

Finally, a Financial Reconciliation is prepared after the end of the fiscal year and presented to the Board in August showing actual income and expenditures for the previous fiscal year.