Last week, the California Supreme Court issued a unanimous decision in a very complex—but very important—case that had been percolating for more than a decade, dealing with how local school officials evade competitive bidding on construction projects.
The case began in 2010 when Fresno Unified School District persuaded its voters to approve a bond to build new schools and upgrade old ones. In 2011, the district sold more than $100 million in bonds from that issue and an earlier one, and in 2012 awarded a $36.7 million contract for a new middle school to Harris Construction Co.
The contract with Harris, which had been a major contributor to the bond issue campaign, was structured as a “lease-leaseback” deal in which the district leased the school site to Harris for a nominal sum, Harris built the school and the district then leased the completed facility from Harris.
