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CUSD board approves transfer of $4.2 million sale proceeds to pay abuse-settlement costs
Summary
The Carpinteria Unified School District board adopted Resolution No. 25938 to request state approval to transfer $4.2 million from the sale of the Baylard property into the district general fund to pay three abuse-settlement payments totaling $4 million and to reserve $200,000 for a fourth case.
The Carpinteria Unified School District Board of Education on Aug. 12 voted to adopt Resolution No. 25938 authorizing the district to seek state approval to transfer $4,200,000 from the sale of surplus property into the district general fund so the district can pay three settled claims totaling $4,000,000 and hold $200,000 to address a remaining related lawsuit.
Board members approved the resolution after staff and legal counsel explained that the settlements are conditioned on permission from the State Allocation Board and the Office of Public School Construction to use sale proceeds for one-time general fund purposes under Education Code provisions cited in the resolution. Legal counsel told the board the approach was chosen to avoid the potential for much larger trial verdicts and to protect the district’s fiscal solvency.
The resolution cites Education Code provisions that allow proceeds of surplus real property sales initiated before June 2024 to be transferred to the general fund if the state authority approves and if the district certifies the property was purchased with nonstate funds and is not needed for projected school construction over the next 10 years. The resolution as presented says the Baylard property sale closed Jan. 6, 2025, for $4,200,000 and that the district will use those proceeds, if allowed by the state, solely for one-time settlement payments related to claims alleging abuse decades earlier.
Public commenters at the meeting criticized district officials for previous litigation expenses and raised concerns the transfer would reduce funds available for facilities and programs. Legal counsel told the board that the settlement route and funding via the property sale avoided larger financial exposure and that the draft resolution contains elements required by state statute and the state allocation board.
The board moved and seconded the resolution and took a roll call vote approving the measure. The resolution will be submitted with required materials to the state allocation board for final authorization.
The action is procedural and contingent: the transfer cannot occur until the state authorizes the use of sale proceeds. The resolution states the transfers and settlements are one-time expenditures and that using the sale proceeds may reduce potential state financial hardship funding going forward.
Next steps listed in the resolution and discussed on the record include submitting the plan and certification materials to the State Allocation Board and Office of Public School Construction and complying with any conditions those bodies impose before the district can move funds from the sale into the general fund.
