It was illegal for Jim Smith to spend John Doe’s funeral deposit on gambling - or for that matter, on anything else that is not connected to John Doe’s funeral.   John Doe’s deposit must be available when he dies.  This is very similar to Vallejo’s “restricted funds”.  The restricted funds were paid to the City for specific purposes and can’t be spent on Fire Fighter raises, or anything else that does not meet the requirement of the restricted purpose.

So when the fire fighters are asking the City to spend reserves on their raises, they are asking the City Manager and the City Council to break the law – it’s as simple as that.