In Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, the plaintiffs alleged an irrigation district was bound by an implied contract to provide its employees with annual merit pay increases. The California Supreme Court held the trial court erred in sustaining a demurrer because the complaint sufficiently pleaded facts to support an implied contract with the irrigation district. (Youngman, supra, at pp. 244, 247.) The court confirmed the established rule that "governmental subdivisions may be bound by an implied contract if there is no statutory prohibition against such arrangements." (Id. at p. 246.) The court noted the irrigation district's contracting authority was found in the Water Code, and "the Water Code prescribes no formal requirements for the consummation of an employment contract by the board." (Ibid.)