Carpinteria Unified approves BP 34-70, authorizes up to $22.5 million in judgment bonds to settle abuse case

The Carpinteria Unified School District Board of Education adopted an updated Board Policy on debt issuance (BP 34-70) and approved Resolution No. 25-941 authorizing the issuance and sale of judgment obligation bonds not to exceed $22,500,000 to fund a settlement in Superior Court case 22CV04877.

The board took the actions during a special meeting that included public comment opposing the use of new debt to pay legal settlements and concerns that a previously posted meeting video was not in the district’s routine locations. Staff said a validation action will be filed in Superior Court and the district expects to seek financing in the private market early next year.

Union representative: public comments and opposition A union representative told the board the district did not post the Oct. 14 meeting video in the usual locations and said the district was seeking to increase its ability to incur debt "so it can pay off fines and legal penalties associated with the district's past sins." The commenter urged trustees not to approve BP 34-70 and later urged the board not to approve "resolution number 25-941." The comment argued the policy and resolution would let current officials avoid accountability for past unlawful behavior.

Policy adoption Staff clarified that BP 34-70 is "just a policy on debt issuance and management" and, as presented, applies specifically to financing related to historical abuse cases dating to the 1970s and 1980s. A motion to adopt the second reading of BP 34-70 was made, seconded and approved by the board.

Resolution No. 25-941: purpose and legal basis Staff introduced Resolution No. 25-941 as "a resolution of the Board of Education of the Carpinteria Unified School District authorizing the issuance and sale of Carpinteria Unified School District judgment obligation bonds in an amount not to exceed $22,500,000, authorizing the execution and delivery of an indenture and authorizing a validation action and other matters relating thereto." The resolution describes the district’s obligation to make a settlement payment to a judgment obligee under a stipulated consent judgment in case 22CV04877 and cites multiple California code sections and Assembly Bill 218 as the statutory framework referenced in the staff summary.

Staff named Fieldman, Rollop and Associates Inc. as the district’s municipal advisor and Orec, Harrington and Sutcliffe LLP as bond counsel and disclosure counsel. The resolution authorizes district officers to commence a validation action under the California Code of Civil Procedure to confirm the legality and validity of the bonds and the indenture. The staff presentation notes the district’s general fund would be a source for repayment of the bonds and that the financing would allow the district to amortize the judgment obligation over time.

Consultant remarks and consequences if not approved Craig Price addressed trustees and said the action "has nothing to do with anything that has been ordered by any court" but instead implements a settlement that resolves "the last of the 4 *** abuse cases going back to the middle [19] seventies." Price said the settlements and the financing plan have allowed the district to avoid potentially much larger jury verdicts that could have severely impacted the general fund, and that following adoption a validation action would be filed and financing pursued, with completion expected early next year.

Board action and next steps After presentation and brief questions, the board walked back an earlier motion to allow the presentation, then moved, seconded and conducted a roll call to approve Resolution No. 25-941. Staff said it will take the necessary steps to complete issuance of the bonds, including filing a validation action in Superior Court. The meeting adjourned following the roll call.

What the actions do and do not do The adopted policy (BP 34-70) provides an updated framework for debt issuance and management. Resolution No. 25-941, as adopted, authorizes district officers to pursue sale of judgment obligation bonds and to seek court validation of the financing; it does not itself issue bonds on the spot nor does it specify exact sale terms or interest rates. The staff presentation identified the general fund as the legally available repayment source for obligations under the bonds.

Reported quotes "Please do not approve resolution number 25-941." — Union representative during public comment. "The action that you're taking tonight has nothing to do with anything that has been ordered by any court. Rather, it has to do with a settlement that you have been able to make, which is the last of the 4 *** abuse cases going back to the middle 19 seventies." — Craig Price.

Background and context Public speakers repeatedly linked the proposed financing to district legal exposure from historical abuse cases and urged alternative approaches to resolving past fiscal liabilities. Staff and the consultant framed the financing as a mechanism to amortize a defined judgment obligation and to limit immediate impact on the district’s general fund.

Follow-up Staff said a validation action will be filed in the Superior Court and that the district expects to pursue private-market financing; details on sale timing, interest rates and the final repayment schedule will be determined in subsequent steps and were not specified at the meeting.