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Orbach Huff & Henderson Wins Major Financial Hardship Funding Case

On May 24, 2022, the California Court of Appeal, Third Appellate District, ruled that school districts may retain their savings achieved in the use of financial hardship grant funding in the construction of school facilities. In this matter, the State of California (through the State Allocation Board) had contributed a financial hardship funding grant of over $17.6 million to the San Bernardino City Unified School District for the construction of a high school. When the project was completed, the District had realized approximately $3 million in savings, which the Office of Public School Construction (OPSC) demanded the District return to the State. The District, represented by Orbach, Huff & Henderson, appealed OPSC’s demand and asserted that the regulation relied upon by the State was inconsistent with the State Facility Program’s statute related to all projects’ savings which expressly permits all school districts to retain savings, provided those savings are used on other high priority capital projects. The Court of Appeal agreed with the District, found the regulation unenforceable and ordered that the District may retain the project savings.

If you are a school district in California and have paid any project savings to the State Allocation Board, you may be in a position to demand those savings be returned to your school district.

Here is a link to the opinion: