Board approves $4.5 million transfer from reserve to cover AB 218 settlement

The Laguna Beach Unified School District Board on July 9 approved a resolution to transfer $4,500,000 from the district’s special reserve (Fund 17) to the General Fund to pay a civil settlement tied to claims authorized under Assembly Bill 218.

Manoj Roachoudhary, speaking for district staff, said the settlement relates to an AB 218 claim originating in the 1970s. The district searched for historical insurance coverage but has not yet confirmed recoverable coverage; the district has engaged counsel to pursue any potential reimbursement. Staff said that if insurance funds are later recovered, the district will return that money to Fund 17.

Board members asked for details about the fund’s intended balance and prior drawdowns. Staff said Fund 17 was established circa 2005–2006 to provide a one-time buffer if the district moved from basic‑aid to LCFF funding and that the last significant drawdown was in 2019 for an OPEB trust contribution (about $1,000,000). Staff projected that after the $4.5 million transfer the Fund 17 balance would be about $20,000,000.

Members raised procedural and policy questions about appropriateness and timing; staff and counsel affirmed that counsel advised the settlement and that using Fund 17 for this operational, one-time expenditure is allowable. Several trustees urged attention to both victims and fiscal stewardship while others emphasized the human impacts of abuse claims.

The board approved Resolution 2607 by roll call, 5–0.

Staff said the district will continue pursuing insurance recovery and will report back if funds are recovered so Fund 17 can be replenished.