U.S. v. BOARD OF EDUCATION

June 8, 1984 OPINION — TABLE OF CONTENTS

Pages

BACKGROUND 138-140

I. FINDING OF FACT ("Findings") Findings

Adoption and Approval of the Desegregation Plan (the "Plan"), and the Nature of the Plan 101-61 140-157

Consent Decree Negotiations 101-11 140-144

Development of Part I of the Plan, the Educational Components 112-17 144-146

Statements of the United States and this Court Relating to the Educational Components 118-28 146-150

Overview of the Student Assignment Plan 129-44 150-152

Demographics of the city of Chicago and the Chicago Public Schools 145-61 153-157

Propriety and Cost of Programs Proposed for Adequate Implementation of the Plan 201-72 158-180

Board's Financial Affairs and Condition and the Financial Aspects of School Desegregation 301-76 180-196

1983-84 Incremental Desegragation Expenditures 301-12 180-186

1983-84 Ancillary Desegragation Expenditures 313-17 186

1983-84 School Budget — Board Resources and Expenditures 318-29 186-188

1979-80 Financial Crisis 330 188

Relationship to School Finance Authority 331-32 188-190

Projected Deficits for Future Years 333-41 190-191

Board Efforts To Find Resources 342-49 191-192

Federal and State Funds Received by Board 350-68 192-196

Boards Good Faith Efforts 369-76 196-197

Addendum A to Findings 301-76 197-200

Availability of Federal Funds to Implement the Chicago Desegregation Plan 401-67 200-208

Presently Available Funds 401-38 200-205

Actions by the United States Affecting the Availability of Funds 439-67 205-208

Actions with Respect to the Yates Bill and Weicker Amendment 501-18 208-211

The United States Non-Compliance With Section 15.1 601-09 211-212

II. CONCLUSIONS OF LAW ("Conclusions")

Conclusions Pages

Law of the case 1-9 212-214

Standards for Determining the Amount of Funding "Adequate for Implementation of the Plan" 10-16 214-217

Standards for Determining the Share the United States is Obligated To Attempt To Provide of the Amount "Adequate for Implementation of the Plan" 17-21 217-218

Consideration of Funding Contentions of the United States 22-35 218-220

Propriety of the Programs Proposed by Board for Implementation of the Plan, and Summary as to the Amount of United States Obligation 36-38 220-221

Verification of the Current Availability of Funds 39-79 221-229

Meaning and Effect of the Yates Bill 80-88 229-231

Meaning and Effect of the Weicker Amendment 89-119 231-237

Additional United States Violations of Section 15.1 and Subsequent Court Orders, and Consequent Remedial Obligations 120-30 237-240

Present Obligations of the United States 131-43 240-243

Seperation of Powers; Judicial Consideration of Legislative Activities 144-57 244-245

Means of Enforcement 158-62 245-246

This case has tended to be sidetracked by a "false conflict"1created by the United States: By creating an artificial limitation onfunds otherwise available or potentially available to satisfy theextensive Desegregation Plan needs of Chicago's Board of Education (letalone the varying needs of other claimants of funds), the United Stateshas sought to place the Board (and this Court) into a position as thoughthe Board (and this Court) were choking off deserving educationalprograms.2 That is simply not true. It is the United States itselfthat has created and is perpetuating that regrettable situation.

This Court has held,3 and our Court of Appeals has confirmed,4that the United States has broken its word by refusing to keep thepromise it made on the day this lawsuit was filed, Consent Decree §15.1, ("Section 15.1"):5

Each party is obligated to make every good faith effort to find and provide every available form of financial resources adequate for the implementation of the desegregation plan.

In a sense the United States is not like other litigants — becausethe concerns created by considerations such as separation of powers andsovereign immunity tend to prevent its promises from being fully enforcedin precisely the same way as promises of (say) IBM or other privatedefendants. For that reason this Court has previously been compelled toimpose a "freeze" order to avoid the risk its ability to order reliefwill arguably be frustrated. Because the United States has deliberatelyviolated its original agreement to fund the Chicago Desegregation Plan,this Court has reluctantly found it necessary to prevent the distributionto other possible grantees of United States educational funds, in orderto preserve access to all the dollars that would be potentially availableto fund the honoring of the United States freely-undertaken (and thenfreely-broken) obligation to the Board.

But as this Court has said during the course of hearings on thisissue, the United States "has the key to its cell in its own pocket."6It could have, in the exercise of its "every good faith effort," assuredthat all the needed funds would be potentially available to the Board by(1) shifting available dollars to the Board to the fullest extentpossible without congressional approval or (2) going to Congress with arequest to allow the shifting of dollars that were already available tothe Department of Education, but that required reallocation because theywere not in fact going to be used for the purposes that had been thesubject of the original allocation.7 It could have done both thosethings if necessary. Instead the United States has chosen to pitdeserving applicants for funds one against the other, and to put theissue before Congress as though the Board and this Court — ratherthan the United States as the breaker of its own voluntary promise— were the malefactors.

One other related point should be emphasized at the outset. Section15.1 is part of a consent decree. Like every consent decree, it has atwofold aspect.8 It is of course a contract — and as acontract, it is enforceable to require the contracting parties to performtheir voluntarily undertaken duties. Because unlike most contracts theparties have chosen to submit it for the stamp of court approval, it isalso acourt order — and as such, it is enforceable like any other courtorder, by contempt if need be.9

On the sorry record reflected by the matters detailed in this longopinion, a private litigant that did what the United States has done wouldunquestionably be held in contempt — with the potential for beingsubjected to a fine or imprisonment as well as to an order for civilcompliance. But for the United States a contempt fine is meaningless— after all it is the public interest (and not the injured opposingparty) that is vindicated by a fine, with the money going to the UnitedStates itself as surrogate for the public. Thus imposition of a fineagainst the United States would just transfer money from one federalpocket to the other. Similarly imprisonment of the United States as suchis impossible, and any possible imprisonment of defiant rankinggovernment officials would be unseemly at best. For those reasonsvoluntary adherence by the United States to its solemnly undertakenresponsibilities becomes all the more important, and its deliberateflouting of those responsibilities becomes all the more unpardonable.

Now the legal rights of the litigants have to be evaluated. Thisopinion has not been drafted in response to the United States conduct justreferred to, but that conduct may have made the issues more clouded thanwould otherwise have been the case.

This Court now has before it the evidence developed in extensivehearings on remand from the Court of Appeals decision ("Opinion III," seen. 4) confirming the United States violation of Section 15.1. Althoughthe Court of Appeals did that, it also vacated the part of this Court'sJune 36, 1983 order (the "Order," issued contemporaneously with "OpinionII," see n. 3) that had directed the United States to undertake anaffirmative program to preserve the availability of funds potentiallyavailable to fulfill its obligations under the Decree. As the Court ofAppeals put it (717 F.2d at 384), this Court had "acted with excessivedispatch" in doing so. This Court of course had shared the respect forseparation of powers that underlay the Court of Appeals opinion. ThisCourt's fault, if it was one, was in a skepticism (grounded in priorconduct by the United States, not in mere surmise) as to whether theUnited States would in fact "fashion its proposed remedy for pastnon-compliance, as well as . . . show that it intends to comply in thefuture . . ." (717 F.2d at 385).

As the following findings of fact ("Findings") and conclusions of law("Conclusions") will reflect, this Court's anticipatory doubts wereunfortunately all too justified. Now the Department of Education has beengiven the opportunity mandated by the Court of Appeals, and it has failedits charge dismally. In accordance with Fed.R.Civ.P. ("Rule") 52(a),this Court sets forth the Findings and Conclusions that constitute thegrounds of its action referred to in this lengthy opinion.

FINDINGS OF FACT ("Findings")

Adoption and Approval of the Desegregation Plan (the "Plan"), and the Nature of the Plan

Consent Decree Negotiations

101. Chicago's Board of Education ("Board") operates the third largestpublic school system in the United States. In the 1980-81 school yearBoard operated 634 schools, including 495 elementary schools, 66 highschools and 73 special needs schools of various types. In October of thatschool year Board had 458,497 students, whose racial/ethnic makeup was asfollows:

White Non-Hispanic 85,292 18.6%

Black Non-Hispanic 278,726 60.8%

Hispanic 84,226 18.4%

Asian/Indian 10,253 2.2%

At the same time Board employed approximately 43,000 persons, including29,000 members of the Chicago Teachers Union. Board is the largestemployer in Chicago and the second largest in Illinois. (Stip. 101)West Page

102. After protracted and complex negotiations, the United States andBoard entered into a Consent Decree, which was filed with and approved bythis Court September 24, 1980. (Stip. 102) Findings 103-04 give thebackground of the Consent Decree.

103. After desegregation negotiations in 1979 between the formerDepartment of Health Education and Welfare and the former representativesof Board had proved unsuccessful, the United States Department of Justicenotified former Interim Superintendent of Schools Caruso on April 21,1980, that if further negotiations were not successful, the United Stateswould initiate a desegregation lawsuit against Board. (GX1-27 [GovernmentExhibit 1, June 1983 hearing, Document 27]) Ensuing negotiating sessionsbetween the Department of Justice and former Board representativesprimarily addressed whether the parties could agree on specific racialpercentages for a student assignment plan and on the specific amount andtiming of the Emergency School Aid Act (ESAA) funds that the Board wouldreceive to implement such a plan. (GX1-21, 22) Board counsel indicatedthat if the negotiations failed and litigation commenced, Board wouldpresent counterclaims against agencies of the federal government. (GX1-39)There was no significant progress in those negotiations. (GX1-21, GX1-22)(Stip. 103)

104. During those negotiations a new Board was appointed and tookoffice. (GX1-22) That new Board formed a Desegregation Committee (GX1-21)and indicated to the United States it would bring fresh approaches to thenegotiations (Id.) Thereafter Board was represented by its new leadershipand by new counsel. (GX1-16) Negotiations then progressed rapidly,leading to a draft agreement within a few weeks (GX1-16) and toconsummation of the Consent Decree within another six weeks. (GX1-14, 15)That progress resulted from an altogether different focus. Rather thanseeking to negotiate the specific terms (or even somewhat moregeneralized terms) of a student assignment plan, the parties insteadagreed to general principles that would guide subsequent development of aplan. (Consent Decree, Part I) Correspondingly with respect to funding,the parties negotiated a general principle applicable to both parties.Those negotiations concerning the general funding provision have beendescribed in a Joint Stipulation of the parties as follows:

At a relatively early stage in the negotiations leading to the Consent Decree, the parties discussed the question of financial support from the United States for the Board's desegregation activities. It was the Government's position that no funding commitment specific as to form and amount could be made in the context of the Consent Decree, because there was no way to anticipate the nature and costs of the Board's Plan, the amount and sources of Government funding, or a variety of other matters. The parties briefly discussed funding possibilities relating not only to the Department of Education (including ESAA and other programs), but also other federal agencies such as the Department of Justice, the Department of Transportation, and the Department of Housing and Urban Development. Thereafter Mr. Ross conveyed to Mr. Howard by telephone brief descriptions (obtained by Mr. Ross from the Department of Education) of some of the types of planning and implementation activities funded in other instances. Mr. Ross also conveyed to Mr. Howard very sketchy information about grant amounts to other cities, but in general it was the position of the Department of Education that it would not disclose such information. These discussions took place approximately two months before the completion and execution of the Consent Decree. It was concluded that the matter of federal financial support would be handled by including general provisions in the Consent Decree, and Section 15.1 was drafted and incorporated into the Decree. Section 15.1 was not designed to incorporate any specific discussions between the parties on this issue, but to establish a general obligation on the part of both parties which would be interpreted and applied as appropriate in whatever future circumstances might arise.

Section 15.1 provides:

15.1 Each party is obligated to make every good faith effort to find and provide every available form of financial resources adequate for the implementation of the desegregation plan.

Section 15.3 provides:

15.3 The parties recognize that financial cost of implementation does not excuse the failure to develop a desegregation plan consistent with the principles set forth in §§ 2-14, and is not a basis for postponement, cancellation or curtailment of implementation of the plan after it has been finally adopted, but is one legitimate consideration of practicability in meeting the objective stated in § 2.1.

(Stip. 104)

105. On September 24, 1980 four events occurred to make the ConsentDecree fully operative:

(a) filing of a Complaint by the United States;

(b) execution and filing of the Consent Decree;

(c) after a hearing and after consideraition of the Complaint, the Consent Decree and the United States Memorandum of Law, approval by the Court of the Consent Decree and its entry by the Court; and

(d) Board's non-filing of any counterclaim against the United States.

(Stip. 105)

106. Among the general principles set forth in the Consent Decree toguide subsequent development of a desegregation plan were the following:

§ 2. Basic Objectives

2.1 Desegregated Schools. The plan will provide for the establishment of the greatest practicable number of stably desegregated schools, considering all the circumstances in Chicago.

2.2 Compensatory Programs in Schools Remaining Segregated. In order to assure participation by all students in a system-wide remedy and to alleviate the effects of both past and ongoing segregation, the plan shall provide educational and related programs for any Black or Hispanic schools remaining segregated.

2.3 Participation. To the greatest extent practicable, the plan will provide for desegregation of all racial and ethnic groups, and in all age and grade levels above kindergarten.

2.4 Fair Allocation of Burdens. The plan shall ensure that the burdens of desegregation are not imposed on any racial or ethnic group.

§ 7. Compensatory Programs in Schools Remaining Segregated. To accomplish the objective stated in § 2.2, the plan will include specific programs for Black or Hispanic schools remaining segregated, in the following areas among others:

7.1 Remedial and compensatory educational programs.

7.2 Improved curricula and instructional and evaluative techniques (including the utilization of tests that validly measure student achievement) for academic, vocational and alternative educational studies.

7.3 Pre-service and in-service instruction for administrators, principals, teachers and other school personnel.

7.4 Selection, and evaluation of the performance of, principals and supporting leadership staff.

7.5 Testing, counseling, guidance and student welfare.

7.6 Physical facilities, safety and security.

7.7 Supportive relationships between such schools and groups and institutions in the community and in government.

(Stip. 106)

107. Thus in agreeing in Section 15.1 to find and provide financialresources "adequate for implementation of the desegregation plan," theUnited States was agreeingto help pay for a plan that would include educational components inracially isolated schools (§ 2.2)1 covering the subject matteroutlined in § 7, in the development of which the Board would exercisediscretion (§ 3.1). (Stipulations 101-06)

108. Circumstances surrounding entry of the Consent Decree indicatethat a joint and mutual obligation was contemplated. The Consent Decreerepresents the only instance in which a major urban school system hasagreed, without any litigation or determination of liability issues, todevelop and implement a system-wide desegregation plan under courtsupervision. It contemplated that because of the demographics of theChicago school system, a substantial number of minority children wouldinevitably remain in racially isolated schools, requiring the extensiveand expensive use of compensatory educational remedies to alleviate theeffects of past segregation. In 1980 (as now) Board was faced withmassive financial deficits, and the joint funding provision of theConsent Decree reflected recognition that Board's finances were such thatit could not voluntarily agree to develop, or successfully to implement,an effective desegregation plan of this type unless the federalgovernment were sharing the financial burdens. (Stipulations 101-56; June1983 Findings and Plan/ADR data on Board finances)

109. Stated simply, the parties had a common and overriding goal ofassuring that an effective desegregation plan was developed andimplemented in Chicago. This joint purpose, with respect to financing,included a requirement that the parties provide the total amount of fundsadequate for implementation of the Plan. In Section 15.1 each partyagreed to do everything possible to supply the necessary funding.(Stipulations 101-56; June 1983 Findings and Plan/ADR data on Boardfinances) The United States financial commitment under Section 15.1 wasthe principal quid pro quo for Board's willingness to forego litigationand develop the Plan. In return for that commitment, the United Statessecured the full result it sought (and may not otherwise have achieved)without the expense and delay of complex litigation. The United Statesalso avoided potential liability for a number of counterclaims that wouldhave been brought against it. (Findings 103, 105)

110. With respect to "what the parties reasonably expected at the timeof signing," the parties Joint Stipulation (Government's Exhibit 2 in theJune 1983 hearing) states:

Section 15.1 was not designed to incorporate any specific discussions between the parties [on the issue of federal financial support], but to establish a general obligation on the part of both parties which would be interpreted and applied as appropriate in whatever future circumstances might arise.

All the extrinsic evidence concerning this issue does not support anynotion that there was a recognized specific dollar limitationincorporated in Section 15.1, based on the amount of previous ESAA grantsor otherwise. Indeed the Joint Stipulation reflects the parties had beendiscussing "funding possibilities relating not only to the Department ofEducation (including ESAA and other programs), but also other federalagencies such as the Department of Justice, the Department ofTransportation, and the Department of Housing and Urban Development."2As this Court has determined previously, the extrinsic evidence points toan obligation to conduct a "universal search" (567 F. Supp. at 282 n.6), not a limited examination of what ESAA fundingwas theoretically available to Board. (Stipulations 101-06; GovernmentExhibits 1 and 2 in the June 1983 hearing) This does not of course meanthe parties contemplated issuance of a blank check to Board by the UnitedStates. But given the circumstances of the negotiations, Board's knownfinancial difficulties, its inability to generate funds without theapproval of other governmental agencies, the known major problems (andhence major costs) of implementing a desegregation plan in a schoolsystem as large as Chicago's (and with its racial mix), and otherrelevant factors, the parties reasonable expectations should certainlyhave embraced the potential need for the United States regularly "to findand provide" sums of the magnitude represented by Board's proof at thecurrent hearing. Although this Court ruled in limine (prior to thecurrent hearings) certain areas of proof by the United States would beexcluded, this Court has nevertheless given full consideration to (a) theUnited States offer of proof suggested by this Court as the means tocomplete the record and (b) Board's post-hearing response to that offerof proof. Even taking that offer of proof fully into account (rather thantreating it as excluded) this Court finds nothing in the United Statesproof or proposed proof persuasively refutes the reasonableness of theexpectations referred to in this Finding. Given the parties JointStipulation that Section 15.1's "general obligation . . . would beinterpreted and applied as appropriate in whatever future circumstancesmight arise," this Court finds the current circumstances make theinterpretation of that obligation to embrace the Board's current request(as modified by this opinion) to be wholly appropriate for funding by theUnited States.

111. The consent Decree in this case is the only instance in which theUnited States has entered into a desegregation settlement containing thesame or substantially similar language to that in Section 15.1. (Stip.107)

Development of Part I of the Plan, the Educational Components

112. To develop the Educational Components of the Plan, Board retaineda team of independent, nationally recognized consultants. Dr. Robert L.Green was the Lead Consultant, with principal overall responsibility forthe process. Dr. Green (now the President of the University of theDistrict of Columbia) was then Dean of the College of Urban Development,Michigan State University. He was a leading national expert ondesegregation plans, especially the aspect of desegregation thatemphasizes educational programs to provide equal and effective educationfor urban and minority children. Dr. Green had participated in manydesegregation cases and desegregation plans, traditionally as an expertfor the plaintiffs in such litigation, and frequently on behalf of theNAACP. (Stip. 108) In addition to Dr. Green, five other education expertsfrom outside the school system were retained on a full-time basis to workon the Educational Components, along with 24 part-time "nationalconsultants." Professor Ronald Edmonds (who has since died) was theprimary national consultant in the area of curriculum. While on thefaculty of the Harvard Graduate School of Education, Dr. Edmonds haddirected the well-known major research project, Search for EffectiveSchools: The Identification and Analysis of City Schools That AreInstructionally Effective for Poor Children. Professor Edmonds had alsoimplemented his "effective schools" design as the principal instructionalofficer for the New York City schools, with the title of Senior Assistantfor Instruction.

113. Board's complete list of desegregation project consultants is asfollows:

Robert L. Green, PhD., Lead Consultant

Dean, College of Urban Development Michigan State University East Lansing, Michigan

Staff

Nelvia M. Brady, Ph.D., Staff Director

Professional Associate Educational Testing Service Evanston, Illinois

Elizabeth Jill Hirt, Ph.D., Staff Associate

Research Associate College of Urban Development Michigan State University East Lansing, Michigan

Judaun Hixson, M.A., Staff Associate

Educational Director on Leave Chicago Urban League Chicago, Illinois

Staff

Jodi Martinez-Martin, Ed.D., Consultant

Teacher Education Specialist Illinois State Office of Education Springfield, Illinois

Frances S. Thomas, Ph.D., Consultant

Assistant Professor College of Urban Development Michigan State University East Lansing, Michigan

Primary National Consultants

Curriculum: Professor Ronald Edmonds Senior Assistant to the Chancellor for Instruction, NYC Public Schools

Staff Development: Dr. Cassandra Simmons Assistant Professor and Director, Office of Student Affairs College of Urban Development Michigan State University East Lansing, Michigan

Additional Consultants and Resource Persons

Dr. Beatriz Arias Dr. Josue GonzalezStanford University Office of EducationStanford, CA Washington, DC

Ms. Norma Barnes Dr. Robert J. GrifforeNorma Barnes Assoc. Michigan State UniversityChicago, IL East Lansing, MI

Dr. Samuel Betances Dr. James Hawkins, SuperintendentNortheastern Illinois University Benton Harbor Public SchoolsChicago, IL Benton Harbor, MI

Dr. Duane Brown Ms. Maureen LarkinUniversity of North Carolina Milwaukee Public SchoolsChapel Hill, NC Milwaukee, WI

Dr. Robert Crain Dr. Jane MercerJohns Hopkins University University of CaliforniaBaltimore, MD Riverside, CA

Ms. Jane Creeden Dore Dr. Margaret ParsonsFreelance Editor/Writer Michigan State UniversityChicago, IL East Lansing, MI

Dr. Joseph Darden Ms. Rachel Patrick, J.D.Michigan State University American Bar AssociationEast Lansing, MI Chicago, ILDr. Harold Dent Dr. Diana PearceWestside Community Mental Center for National Policy Health Center ReviewSan Francisco, CA Washington, D.C.

Dr. Edgar Epps Mr. Joseph RosenUniversity of Chicago Educational ConsultantChicago, IL Chicago, IL

Dr. Reynolds Farley Dr. Charles Thomas, Supt.University of Michigan School District #64Ann Arbor, MI North Chicago, IL.

Dr. Walter Farrell Ms. Rebecca YarlottUniveisity of Wisconsin Minneapolis Public SchoolsMilwaukee, WI Minneapolis, MN

(Stip. 109

114. During the development of the Educational Components from November1980 through March 1981, Board submitted monthly progress reports to theDepartment of Justice, as required by the Consent Decree. (Stip. 110)

115. Dr. Green submitted his Recommendations on Educational Componentsto Board April 3, 1981. Two weeks later the Recommendations were adoptedby Board as Part I of the Desegregation Plan: Educational Components.Part I's content is summarized by its Table of Contents:

A. Introduction

B. Educational Components

1. Curriculum and Instruction — Elementary Schools 2. Curriculum and Instruction — High Schools 3. Magnet Schools 4. Vocational and Technical High Schools 5. Special Education and Testing 6. Bilingual Education 7. Within-School Segregation 8. Student Discipline

C. Staff Development

D. Other Components

1. Public Participation 2. Metropolitan Initiatives 3. Faculty Desegregation and Affirmative Action 4. Evaluation 5. Monitoring

E. Appendix

(Stip. 111)

116. The following statements about Plan costs appeared at pages 17 and19 of the "Financial Aspects" section in Part II of the Plan, adopted inApril 1981:

1. Cost and Funding of the Plan. Due to the relatively short time available under the Consent Decree for development of the desegregation plan, the planning process has been addressed to the formulation of programs that would be desirable to effectuate the purposes of the Decree.

2. It has not yet been possible to determine the financial feasibility of the programs — i.e., the administrative details of the programs, the exact costs associated with the various elements of the plan, the extent to which these costs can be met from existing resources or require new funding, and the availability of such new funding. * * *

While the exact costs of the educational components are not yet known, the Board believes that the core level of funding required to make reasonably effective those educational components directed to Black and Hispanic schools remaining racially isolated is $40 million annually in fiscal years 1982 and 1983, and $20 million annually thereafter (although additional funding would be strongly desirable).

(Stip. 112)

117. Before the Consent Decree, Board's desegregation programs wereadministered by a staff of three persons. Shortly after the initialadoption of the Educational Components, Board created a special Office ofEqual Educational Opportunity ("OEEO") to coordinate the implementationof the Plan. OEEO is presently headed by Dr. Nelvia Brady, AssociateSuperintendent, who was a member of Dr. Green's original desegregationplanning staff. OEEO's office staff has expanded continuously since 1981and presently comprises 53 persons, of whom eight are clerical staff,eight are teachers (who are district-assigned), 13 are school-committeerepresentatives and 24 are teachers (7) and administrators (17) assignedto the central office. Twenty-nine of the 40 education professionals(72.5%) have their principal responsibilities in the area of implementingthe Educational Components of the Plan. (Stip. 113)

Satements of the United States and this Court Relating to the EducationalComponents

118. On June 3, 1981 Attorney General William French Smith delivered anaddress before the American Law Institute. In discussing the policy ofthe United States as to desegregation remedies, Mr. Smith stated (at8-9):

All of these considerations [concerning mandatory reassignment] point to the need for more innovative and practical approaches to achieve equal educational opportunity. Mandatory busing is not an effective educational remedy, and in many cases it has also proven counterproductive. But this does not mean that desegregation should not continue or that improving the quality of public education for all our children cannot be achieved. To do so, however, we must tailor the remedy to the facts of each case in which a constitutional violation has occurred.

Rather than focusing solely on the means by which discrimination has been practiced in the past, it is time we devoted more attention to remedying the resulting harms actually being suffered today. We should emphasize those remedies that actually improve the quality of education. Rather than continuing to insist in court that the only and best remedy for unconstitutional segregation is pupil reassignment through busing, the Department of Justice will hence forward propose remedies that have the best chance of both improving the quality of education in the schools and promoting desegregation.

(Stip. 114)

119. In the Response of the United States to the Desegregation Plan,filed in July 1981, the United States made the following comments aboutthe Educational Components of the Plan:

(a) With respect to the provision of the Consent Decree concerning providing compensatory programs in schools remaining segregated, the United States said (at 5):

This principle is based squarely on common sense and Supreme Court holdings. The method of compliance with this objective is largely within the discretion of the Board, which has the expertise in educational methods.

(b) After a brief summary of the Educational Components, the United States stated (at 22) that "the Government endorses" them.

(c) Finally, in evaluating the Educational Components, the United States said (at 32-33):

The Educational Components have been more fully developed than the student assignment principles. The Board hired an impressive team of nationally known experts and the Plan reflects the substantial time and effort that has gone into the preparation of the Educational Components. The Board and its planners deserve a great deal of credit for the accomplishment of this task. We expect that when these new educational programs are developed in detail and implemented, they will complement the student assignment principles by enhancing the workability of voluntary desegregation techniques and that they will contribute to bringing about equality of educational opportunity in the one-race schools which remain under the final plan.

(Stip. 115)

120. On August 28, 1981 the United States and Board submitted theirJoint Statement to the Court as to the development of the Plan. Withrespect to the Educational Components, the Joint Statement (at 5)informed the Court that

The Board and the United States are in agreement in these general respects: . . . (2) the Educational Components are an integral and necessary aspect of the Board's Plan. They are consistent with the Consent Decree and the Constitution. The United States fully endorses the Educational Components from a legal perspective, although it views the particular educational policy choices as within the Board's discretion.

(Stip. 116)

121. On September 27, 1981 Assistant Attorney General William BradfordReynolds delivered a speech to the Education Commission of the States,meeting in Chicago. In discussing the policy of the Department of Justiceconcerning desegregation remedies, Mr. Reynolds stated:

Experience teaches us that blacks in a segregated school environment more often than not receive inferior educational attention. To the extent necessary, their facilities and curriculum must be enhanced to bring them into educational parity with the other public schools in the system. In sum, we must ensure, whatever the ultimate racial composition in the classroom, that all students attending public schools, regardless of race, color, or ethnic background, have an equal opportunity to receive an education. We are concerned, quite frankly, much less with student relocation than we are with student education and our school desegregation plans will be drawn to reflect that predominant concern.

Pursuant to the Department's civil rights policies, we are overseeing the development of a desegregation plan here in Chicago that will be designed to enhance educational opportunities for all students. The public school enrollment in Chicago is approximately 61% black, 18% white, and 21% non-black minorities, mostly Hispanic. The Chicago School Board and the Justice Department recognize that there are schools in the system that will remain racially identifiable under the desegregation plan, and the Board has thus undertaken compensatory programs to enhance the quality of education provided in those schools in order to guarantee equal educational opportunity to all students in the system. To this end, the Board has developed and submitted to the Court, with our enthusiastic approval, detailed plans to enhance educational quality in the schools, and implementation of those plans began this fall.

By concentrating our attention and resources on teachers and administrators, course offerings, incentives for learning, and other components of education quality, this Administration — with the help and cooperation of civil rights groups, state and local school authorities, and, most importantly, professional educators — can formulate desegregation plans that not only will ensure all public school students, irrespective of race, color or ethnic background, equal educational opportunity, but will do so within an educational environment free from state-enforced attendance barriers. If such a cooperative and united effort can be mounted to rid our Nation's public schools of the tragic legacy of racial discrimination, I am confident that, in time, we will be able to review that effort against the test of experience, and say with pride "it worked."

(Stip. 117; Bd. Ex. 77)

122. In school year 1981-82 Board submitted quarterly progress reportsto the United States and to the Court, detailing the process ofimplementing the Plan, including the Educational Components. (Stip. 118)

123. In February and March 1982, following the adoption of Board'sComprehensive Student Assignment Plan, the Court entertained briefsconcerning the compliance of the total Plan with both constitutionalrequirements and the Consent Decree. The United States Assessment of thePlan commented on the Educational Components as described in Finding139. The Chicago Urban League's Assessment of the Plan expressed strongconcern about the need to provide significant extra funding forimplementation of the Educational Components in racially isolatedschools:

The provision of extra funds — and therefore resources — to schools which are to remain racially isolated is a form of compensation intended to make up in part for the system's failure to remedy all manifestations of segregation. This component of the Plan is extraordinarily important because the majority of the system's schools are to remain segregated under the Board's proposal. . . .

The Chicago Urban League believes the notion of compensatory funding requires that racially isolated schools receive extra funding above and beyond what other schools may be receiving. . . .

The Urban League went on to express concern that Board had only committeditself to provide "Milliken II relief" to the extent that funds areavailable. NAACP's July 1981 memorandum on the Plan stated "we have nospecific objection to the content of these programs." NAACP's March 1982brief did not comment further on the Educational Components.(Stipulations 119, 133)

124. On January 6, 1983 this Court issued its opinion ("Opinion I,"554 F. Supp. 912) approving Board's Plan as being clearly within thebroad range of constitutionally acceptable plans. With respect to theEducational Components and funding, Opinion I stated (id. at 926):

Educational Components. As already indicated, the Educational Components of the Plan were in definitive form well before the assignment provisions that have occupied the discussion in this opinion, and those Educational Components have not drawn the same heated attention. They were approved early by the United States and found favor with the NAACP as well. To the extent they have been criticized (chiefly by the Hispanic organizations and by Designs for Change), the criticisms did not go to claimed constitutional insufficiency and are therefore not within the province of this Court's overview. Though they of course continue to form a vital part of the purposes and hoped-for impact of the Plan — the constitutional guaranty is after all one of equality of education — no more need be said at this time.

Funding. Desegregation, like all other aspects of affording quality education to all students in a school system, costs money. In that respect the Board is not master of its own fate. If and to the extent other governmental bodies and agencies that control the pursestrings were to thwart the Board's ability to perform in the way its Plan contemplates and the Constitution requires, this Court would have to examine all appropriate and available remedies. There is no reason to presume at this time that any such delinquency in meeting the mandates of the Constitution, or any such resulting power confrontation, will occur.

(Stip. 120)

125. Board's 1983 Annual Desegregation Review, Part I (filed April 15,1983) contained a section on "Financial Aspects" at 402-23, whichincluded the following statements:

With regard to expenditures for racially identifiable schools, a brief explanation is in order. The Board's initial commitment (as outlined in the April, 1981 Principles) was to spend $40 million a year in 1981-82 and 1982-83 and $20 million a year thereafter. As described above, spending specifically budgeted for this component of the Desegregation Plan has fallen somewhat short of this originally projected level in the first two years of implementation. As a result, the Board believes it to be appropriate to attempt to make up the difference in subsequent years. Hence, the Board believes to be desirable to spend at least $40 million in 1983-84, as opposed to the $20 million initially prescribed by the Principles. However, the funds needed to provide for this level of expenditure simply are not available from within the Board at this time.

Over and above the level of expenditures for 1983-84 described above, additional resources would also be highly desirable to maximize the effectiveness of the Desegregation Plan. Such additional funding would help to strengthen and enrich the implementation of desegregation in Chicago in a variety of ways: intensified implementation and evaluation of educational components, expansion of magnet schools and programs (including metropolitan schools and scholastic academies), intensified recruitment efforts, improvement in vocational, technical and special educational programs, initiation of interdistrict transfer programs, to name only a few.

Resources. The resources necessary to fund desegregation implementation at the levels set forth above unfortunately are not available at this time from within the Board. The Board, for its part, is committed to appropriations for 1983-84 of at least $57 million — a continuation of the amounts it budgeted for the current school year. To the extent additional moneys are made available, the Board will spend them to bring the aggregate levels of expenditures for racially identifiable schools up to $40 million and to further maximize optimum implementation of this and other aspects of student desegregation. * * * *

Thus, at this time precise estimates of the Board's financial condition for future years are slightly premature. However, it may be fairly stated that for 1983-84 the Board faces budget problems of an extremely serious magnitude. Preliminary projections suggest it is facing a budget deficit in the range of $200 million. . . .

In any event the Board believes that, in the first instance, the obligation to provide these additional resources for the substantial expenditures which full and complete implementation of the Plan entails lies with the federal and state governments.

On April 13, 1983, the Board adopted a resolution directing its counsel to initiate litigation against the State of Illinois and the United States seeking contribution for the cost of implementing the Desegregation Plan. The Board expects that the initiation of these actions will be forthcoming.

(Stip. 121)

126. Board's statements as to the desired expenditure of at least $40million on the Educational Components in racially isolated schools and onthe desired expenditure of additional amounts for these purposes,including the statements described in Findings 116 and 125, do notreflect any determination by Board either that the expenditure of $40million would be "adequate" for that aspect of the Plan (in terms ofSection 15.1) or that the expenditure of additional amounts for thataspect of the Plan would not materially aid its success or would not benecessary for its full implementation, (Stipulations 101-21; Parts I, IIand III of the Plan)

127. In August 1983 Board filed Part II of its 1983 AnnualDesegregation Review, a 416 page document that reported in detail on theimplementation of the EducationalComponents ("ADR II"). After the filing of ADR II this court provided theUnited States and the amici curiae the opportunity to file comments.Neither the United States nor any of the amici filed comments with theCourt. (Stip. 122)

128. As the preceding review of the record reflects, the United States(a) strongly supported (indeed, insisted upon the inclusion of) Board'sEducational Components as the developmental process moved from theConsent Decree principles to the April 1981 Educational Components Planto approval by this Court and (b) raised no subsequent objection as Boardproceeded to add programmatic details to those initial documents. Onlywhen called upon to fulfill its financial responsibility did the UnitedStates begin to renege on its approval. (Stips. 101-22, 133)

Overview of the Student Assignment Plan

129. Under the Consent Decree Board agreed to adopt a system-widedesegregation plan with two basic objectives. Section 2.1 called forcreating the greatest practicable number of stably desegregated schools,considering all the circumstances in Chicago. As already described, thesecond objective was to provide educational and related programs forschools that remained racially isolated. (Stip. 123)

130. In January 1982 Board adopted its Comprehensive Student AssignmentPlan, which divides all schools in the school system into four broadcategories. First of those categories is that of the residentiallyintegrated school (defined as one whose enrollment includes at least 30%white children and 30% minority children, derived principally fromresidential or other natural attendance patterns). Two basic types ofschools come within that category: (a) stably integrated and (b)integrated but with potential for change. There is a third type of schoolidentified in the Plan: currently integrated, but with an enrollment ofwhite children projected to decline below 30%.3 As of October 1981those three types of schools encompassed 67 schools with an enrollment of52,067 students.4 (Stip. 124)

131. Next the Plan considers the category of the desegregated school:one whose enrollment includes at least 30% white children and 30%minority children, and which has been established primarily by studentassignment techniques under the Plan. That category includes both (a)schools that have previously achieved stably desegregated status throughthe implementation of various student assignment measures (as of 1981, 42schools with 20, 329 students) and (b) schools that in 1981 were yet toachieve desegregated status, through previously existing and newlyadopted student assignment techniques (in 1981, 33 schools with 17,541students). Such techniques include voluntary transfer programs and magnetand magnet-type programs within schools. (Stip. 125)

132. In addition the Plan describes various magnet-type schools, whichare established primarily in minority communities and are designed topromote desegregation by special educational offerings and programs. Eachsuch school has a target enrollment composition, generally 15-35% white,65-85% minority. In 1981 such schools included 41 magnet schools,scholastic academies and metropolitan high schools, enrolling 28,824students. (Stip. 126)

133. Finally the Plan also considers schools projected to remainracially identifiable (with an enrollment of greater than 70% minoritychildren, less than 30% white children). In 1981 there were 354 suchschools, enrolling 275,794 students. After describing why those schoolscannot practicably be desegregated, the Plan describes the compensatoryeducational arrangements that will be provided for at thoseschools and the various voluntary transfer arrangements in which studentsenrolled at those schools may participate. (Stip. 127)

134. This table summarizes the school types identified in the Plan, andthe number and enrollment of the schools:

1981Integrated Schools: Number Enr.*fn*

Stably integrated 42 31,791

Integrated schools stable but projected to become mixed 11 7,697

Integrated schools with potential for change 14 12,579

Subtotal 67 52,067

Schools Desegregated and To Be Desegregated:

Schools presently desegregated 42 20,269

Schools to be desegregated 33 17,541

Magnet schools 29 16,765

Scholastic Academies — 1982 6 2,406

Metropolitan High Schools — 1982 6 9,653

Subtotal 116 66,634

Predominantly Minority Schools:

Stable mixed (15-29% white) 14 11,481

Mixed with potential for racial change 20 14,695

Schools more than 85% minority 320 249,618

Subtotal 354 275,794

Special Needs/Special Admissions:

Physically handicapped, apprentice, adult education, bilingual centers, juvenile detention and pregnant students 43 9,173

Total 580 403,668

* All enrollments excluding 39,221 preschool and kindergartenchildren. Twenty-five child-parent centers omitted.

(Stip. 128)

135. Two mandatory requirements were established by the Plan. One wasthat every school achieve by October 1983 a minority enrollment of atleast 30%. Under the other, by October 1983 the school system as a wholehad to achieve a minimum total enrollment in all integrated anddesegregated schools (including magnet schools). This latter requirementis generally referred to as the "desegregation index" requirement.(Stip. 129)

136. Additionally the Plan sets forth other student assignmentprovisions to be applied throughout the school system to provide andmaintain the maximum practicable desegregation and to ensure that thePlan will not initiate or authorize any segregative actions. Among suchprovisions are those concerning school closings, boundary adjustments andwithin-school segregation. (Stip. 130)

137. In a separate volume, the Student Assignment Plan containsschool-by-school analyses for each school in the system. Those analysesdescribe in summary terms the work and consideration that went intodeveloping a desegregation strategy for each school. They also provide adetailed statement as to why it is not practicable to desegregate a largeof schools remaining racially identifiable. (Stip. 131)

138. Detailed evaluation of the student assignment component of thePlan, including analysis of enrollment composition and prescription ofspecific actions for over 200 individual schools, is undertaken everyyear. Each such evaluation is reported on in an Annual DesegregationReview ("ADR"). (Stip. 132)

139. After the adoption of the Comprehensive Student Assignment Plan inJanuary 1982, the United States filed its 33-page Assessment of thePlan. It explained the United States belief that the Plan isconstitutional and consistent with the Consent Decree. In conclusion theUnited States stated:

We believe that, for the reasons stated in these comments, once the plan has been thoroughly implemented and the Educational Components completed, the Board will have: (a) provided a system wide remedy with compensatory programs at remaining segregated schools, (b) established the greatest practicable number of stably desegregated schools, (c) insured that all racial and ethnic groups participate and (d) distributed the benefits and burdens of the plan on a fair basis.

(Stip. 133)

140. In Opinion I (554 F. Supp. 914-15) this Court incorporated theBoard's summary of its extensive and effective activities in the 18months from the entry of the Consent Decree to the adoption of Part IIIof the Desegregation Plan. This Court further noted it had deferredruling on the Plan for several months, so that the promisesof the Plan could be "test[ed] in the crucible of reality." In light ofthe fall 1982 implementation results, this Court found "nothing in theexecution of the Plan this Court has been shown to disprove the premiseson which it was designed" (id. at 915). Finally, having reviewed the Planin detail, approved it as being "clearly within the broad range ofconstitutionally acceptable plans" (id. at 928). (Stip. 134)

141. In April 1983 the Board's Annual Desegregation Review (Part I,Student Assignment) ("ADR I") showed that (a) implementation of the Planduring school year 1982-83 was a considerable success and (b) to a varysignificant degree its projections of student assignment outcomes hadbeen realized. ADR I was also candid in its assessment of shortcomingsand in adopting measures to address them. (Stip. 135)

142. In its May 1983 response to ADR I, the United States favorablyevaluated the Board's substantive implementation process (at 1-2, 4-5):

The Chicago School Board's April 19, 1983, filing on its first Annual Desegregation Review is an extremely well-conceived document and will be a valuable guide for assessing the Board's compliance with the underlying principles established by the Consent Decree and the Court in this case. Like the desegregation plan itself, this document reflects extensive thought, preparation and effort at implementation in a context that is so complex that it often seems incapable of clear description. The review document makes a significant contribution to the clarification, for all involved, of what this plan has meant for the Chicago public schools.

Our first comment is on the review process itself. We know of no other school board, large or small, that has made as comprehensive, detailed and careful examination of what it is doing to implement a desegregation plan.

* * * * * *

We think that the overall plan implementation process has been excellent and that the Board has applied it in good faith at each school. . . . Should the Board fail to take the remedial steps recommended in the review or otherwise fail to take the steps necessary to fulfill the plan's promise, the plan's present constitutional sufficiency would suffer. At this point, we have no reason even to suspect that this is a possibility.

(Stip. 135)

143. As Finding 135 reflects, the mandatory requirements of the StudentAssignment Plan became applicable as of October 1983. While the formalevaluation of the results of the Plan in the 1983-84 school year is notyet due to be filed, Board filed a Report Concerning Preliminary Fall1983 Enrollment Data on November 2, 1983, informing this Court that therequirement of 30% minimum minority enrollment in all schools had beenmet. (Stip. 137)

144. For comparison with Finding 134, the following table shows fall1983 data as to the number and total enrollment of the various schooltypes identified in the Plan. Those data are comparable with Finding134, but it should be noted that there has been some recategorization ofschools to reflect the experience of the past two years. As in Finding134, the figures exclude kindergarten students; therefore the totalenrollment shown is for grades 1-12, 41,260 students less than systemwide enrollment.

1983Integrated Schools: Number Enr.*

Stably integrated 47 36,569

Integrated schools stable but projected to become mixed 4 2,009

Integrated schools with potential for change 4 5,033

Subtotal 55 43,611

Schools Desegregated and To Be Desegregated:

Schools presently desegregated 77 42,382

Schools to be desegregated 0

Magnet schools 33 19,155

Scholastic Academies 5 3,092

Metropolitan High Schools 6 10,302

Subtotal 121 74,931

Predominantly Minority Schools:

Stable mixed (15-29% white) 17 12,683

Mixed with potential for racial change 10 8,065

Schools more than 85% minority 334 248,161

Subtotal 361 268,909

Special Needs/Special Admissions: 1983 Physically handicapped, apprentice, Number Enr.* adult education, bilingual centers, juvenile detention and pregnant students 43 5,331

Total 580 392,782

* All enrollments excluding 39,221 preschool and kindergartenchildren. Twenty-five child-parent centers omitted. (Stip. 138)

Demographics of the City of Chicago and the Chicago Public Schools

145. Extensive demographic information is presented in both theComprehensive Student Assignment Plan (at 8-39) and in 1983 ADR I (at20-23). (Stip. 139)

146. Racial composition of the total population of the city of Chicagofrom 1940 to 1980 is summarized in the following table:

White Non-White TotalYear No. % No. % No.

1940 3,115,000 91.7 282,000 8.3 3,397,0001970 2,208,000 65.6 1,159,000 34.4 3,368,0001980 1,311,000 43.7 1,694,000 56.3 3,005,000

(Stip. 140)

147. Racial/ethnic composition of the Chicago public schools from 1970through 1983 is presented in the following table:

Chicago Public Schools

Racial/Ethnic Composition 1970-1983

White Black Other HispanicYear Membership No. % No. % No. % No. %

1970 577,679 199,669 34.6 316,711 54.8 4,925 .9 56,374 9.71971 574,495 188,312 32.8 320,797 55.8 5,608 1.0 59,778 10.71972 558,825 173,143 31.0 317,975 56.9 5,729 1.0 61,978 11.11973 544,971 160,846 29.5 314,089 57.6 6,306 1.2 63,730 11.71974 536,657 151,290 28.2 310,880 57.9 6,535 1.2 67,952 12.71975 526,716 141,264 26.8 307,549 58.4 7,589 1.5 70,314 13.41976 524,221 130,785 24.9 311,261 59.4 8,343 1.6 73,832 14.11977 512,052 118,713 23.2 306,997 59.9 9,071 1.8 77,271 15.1 1978 494,988 106,581 21.5 299,590 60.5 9,191 1.9 79,526 16.11979 477,229 95,513 20.0 289,920 60.7 9,958 2.1 81,948 17.21980 458,497 85,292 18.6 278,726 60.8 10,253 2.2 84,226 18.41981 442,889 76,112 17.2 269,019 60.7 11,003 2.5 86,755 19.61982 435,843 71,171 16.3 264,530 60.7 11,396 2.6 88,746 20.41983 434,042 67,829 15.6 263,163 60.6 11,283 2.6 91,763 21.2

(Stip. 141)

148. One principal reason the proportion of minorities is higher amongpublic school students than among the overall city population is that alarge number of children (more than half of whom are white) attendnonpublic schools in Chicago, especially the Catholic parochial schools.Their metropolitan-area enrollment of nearly 190,000 students makes theCatholic schools the fifth largest school system of any kind in theUnited States. Within Chicago the Catholic schools as of 1982 had 226schools enrolling 114,299 students, of whom 56% were white, 25% black,16% Hispanic and 3% Asian. (Stip. 142)

149. Total membership in the Chicago public schools has leveled offthis year after 15 years of decline that were often characterized by verysubstantial drops. This year's decline in total membership is only about1800 (0.4%), compared with almost 19,000 (3.9%) in 1980. As a historicmatter, enrollment was 372,278 in 1952. Student membership increasedquite dramatically in the 1950s and the 1960s, reaching a peak of 580,292in 1969. Since then enrollment has declined, generally at the rate of2-4% per year, with the greatestdeclines between 1977-81 (over 15,000 students, or 3-4%, per year). In1982 the decline was 1.6% (7046 students), as contrasted with the slightdrop in 1983. (Stip. 143)

150. Enrollment of white students (now 67,829 or 15.6% system wide) hasdeclined at a significantly slower rate since adoption of the Plan. From1977-81 white enrollment declined at 9-11% per year (or 10,000-12,000students). In 1982 white enrollment declined 6% (4,941 students) and in1983, 5% (3,342 students). (Stip. 144)

151. Black students now number 263,163 (60.6% system wide). As withtotal enrollment and with white students, 1983 decline in blackenrollment of 1,367 students (0.5%) is significantly lower than declinesof 2-4% in the preceding five years. (Stip. 145)

152. In contrast to white and black enrollment, Hispanic enrollment inthe school system has been increasing steadily since 1970, at the rate of3-6% annually. Hispanic students now number 91,763 (21.2% system wide).(Stip. 146)

153. Board's demographers believe the enrollment changes summarized inFindings 149-52 can be attributed to the following factors:

Demographics: continued effects of changes in the number of births, in- and out-migration, and the patterns of student distribution among grades.

Economics: recent high unemployment rates which have curtailed ability to pay tuition for private schools and reduced job opportunities for potential high school dropouts; high mortgage rates which have slowed down the housing market and, in turn, the rate of suburbanization.

Educational Initiatives: smooth implementation of the desegregation plan without busing; development of a variety of program options and specialty schools designed to attract students; an active recruitment program; increases in achievement scores; and greater parental and community involvement through programs such as report card pick-up and Adopt-A-School.

(Stip. 147)

154. During the past two years of relatively stable enrollments, animportant factor contributing to changes is the transfer rate betweenpublic and nonpublic schools. As the following table reflects, the Chicagopublic schools have been gaining more students and losing fewer since1980:

Student Transfers To/From Nonpublic Schools in Chicago 1980 1981 1982Transfers from NonpublicSchools in Chicago 6,084 7,041 7,934

Transfers to NonpublicSchools in Chicago 12,919 11,648 10,177

Net Loss 6,835 4,607 2,243

Total Membership 458,497 42,889 435,843

Percentage Net Loss 1.5% 1.0% 0.5%

(Stip. 148)

155. It appears the recent trend of enrollment decline in the Chicagopublic schools has ended this year. Gradual increases can be expected tobegin next year, if the general demographic trends (particularlymigration and transfer rates) experienced in the recent past continue inthe years to come. Such a development would point to increased demand forteachers and school facilities. As to racial/ethnic composition, theschool system is expected to increase in minority enrollment. This ispartly because of the greater proportion of whites in the upper grades,combined with continued outflow, and the higher birth rates for minoritygroups (particularly Hispanics) coupled with continued immigration ofHispanics. (Stip. 149)

156. Racial/ethnic composition of the elementary and secondary levelsof the school system as of October 1983 is detailed in the first tablefollowing Finding 157. These data are briefly summarized as follows:

Type of TotalSchool Students White Black Hispanic Other # % # % # % # %

Elementary 314771 44592 14.2 191163 60.7 71287 22.7 7729 2.5Secondary 111557 21216 19.0 67770 60.7 19206 17.2 3365 3.1Special 7714 2021 26.2 4230 54.8 1274 16.5 189 2.4

System wide 434042 67829 15.6 263163 60.6 91767 21.2 11283 2.6

(Stip. 150)

157. Racial/ethnic composition of the Chicago public schools by gradesis detailed in the second table following this Finding. In brief summarythe data reflect higher proportions of minority students in the lowergrades. For example, minority enrollment is 75-80% in grades 11 and 12,and 85-86% in first grade and kindergarten. (Stip. 151)

SUMMARY OF OCTOBER 31, 1983, STUDENT RACIAL/ETHNIC SURVEY (By Level and Type of School)

ELEMENTARY LEVEL

AMERICAN IND. ASIAN OR TOTAL WHITE BLACK ALASKAN PACIFIC TOTAL TYPE OF SCHOOL STUDENTS NON-HISPANIC NON-HISPANIC NATIVE ISLANDER MEXICAN PUERTTO RICAN CUBAN OTHER HISPANIC HISPANICNO. # % # % # % # % # % # % # % # % # %

400 Regular Elementary 271,769 39,010 14.4 163,212 60.0 400 0.1 6,136 2.3 38,621 14.2 20,059 7.4 696 0.3 3,635 1.3 63,011 23.219 Academic Magnet Conters 11,715 2,653 22.6 5,910 50.4 19 0.2 305 2.6 1,843 15.7 735 6.3 55 0.5 195 1.7 2,828 24.114 Community Academies 11,155 112 1.0 8,635 77.4 13 0.1 73 0.6 1,343 12.0 903 8.0 4 0.3 72 0.6 2,322 20.86 Scholastic Academies 3,849 1,161 30.2 1,876 48.7 22 0.6 224 5.8 321 8.3 169 4.4 14 0.4 62 1.6 566 14.76 Language Academies 2,445 899 36.8 1,006 41.2 8 0.3 66 2.7 353 14.4 67 2.7 3 0.1 43 1.8 466 19.15 Classical Schools 1,209 368 30.4 660 54.6 6 0.5 75 6.2 50 4.1 36 3.0 - - 14 1.2 100 8.36 Middle Schools 5,348 253 4.7 4,159 77.8 33 0.6 216 4.0 219 4.1 404 7.6 6 0.1 58 1.1 687 12.94 Upper Cycles 2,058 93 4.5 867 42.1 4 0.2 107 5.2 880 42.8 70 3.4 7 0.3 30 1.5 987 48.07 E V G Center 795 6 0.8 718 90.3 - - - - 21 2.6 49 6.2 - - 1 0.1 71 8.925 Child Parent Centers 4,428 37 0.8 4,120 93.0 3 0.1 19 0.4 115 2.6 127 2.9 - - 7 0.2 249 5.6

492 Totals 314.771 44,592 14.2 191,163 60.7 505 0.2 7,221 2.3 43,766 13.9 22,619 7.2 785 0.2 4.117 1.3 71,287 22.7

SECONDARY LEVEL

44 General/Technical* 76,632 17,255 22.5 42,097 54.9 94 0.1 12,046 2.7 7,351 9.6 16,277 8.2 230 0.3 1,282 1.7 15,140 19.89 Vocational* 13,970 665 4.8 12,394 88.7 7 0.1 57 0.4 508 3.6 266 1.9 10 0.1 63 0.4 847 6.17 Metropolitan 10,332 2,414 23.4 4,967 48.0 65 0.6 905 8.8 1,363 13.2 311 3.0 78 0.8 229 2.2 1,981 19.25 Academies/Magnet Schools 10,623 882 8.3 8,312 78.2 6 0.1 185 1.7 1,084 10.2 118 1.1 6 0.1 30 0.3 1,238 11.7

65 Totals 111,557 21,216 19.0 67,770 60.7 172 0.2 3,193 2.9 10,306 9.2 6,972 6.3 324 0.3 1,604 1.4 19,206 17.2

OTHER SCHOOLS/PROGRAMS

37 Special Schools[fn**] 7,714 2,021 26.2 4,230 54.8 18 0.2 171 2.2 948 12.3 237 3.1 14 0.2 75 1.0 1,274 16.5

CITYWIDE SUMMARY

594 Totals 434,042 67,829 15.6 263,163 60.6 698 0.2 10,555 2.4 55,020 12.7 29,828 6.9 1,123 0.3 5,796 1.3 91,767 21.2

* Includes branches

[fn**] Included are schools for the physically and mentally handicapped,students with special needs, bilingual education, adult education andapprentice programs. Students on elementary, secondary, and postsecondarylevels are served.

Racial/Ethnic Composition of Chicago Public Schools

by Grades

GRADE MEMBERSHIP % WHITE % BLACK % OTHER % HISPANICPre-Sch., Sp. Ed. 1,115 22.2 57.6 1.5 18.7Sp. Ed., Elem. 10,235 16.9 68.5 0.9 13.6Pre-Kg., Bilingual 342 1.5 5.0 0.3 93.3Pre-Kindergarten 4,308 3.6 84.5 1.5 10.4Head Start 6,174 5.7 72.9 2.6 18.8Kindergarten 31,121 15.6 57.4 2.1 25.0Grade 1 33,896 14.2 58.6 2.4 24.9Grade Pre-2 4,691 9.7 59.3 1.8 29.3Grade 2 32,838 13.3 59.0 2.3 25.4Grade 3 32,333 13.4 59.4 2.4 24.9Grade 4 31,106 13.5 59.7 2.6 24.1Grade 5 32,430 13.9 60.9 2.7 22.6Grade 6 32,953 14.2 61.9 2.7 21.3Grade 7 32,073 15.7 60.7 2.8 20.8Grade 8 31,952 16.6 61.1 3.1 19.2Grade 9 34,874 15.8 62.3 2.5 19.4Grade 10 30,849 18.7 61.5 2.8 17.1Grade 11 23,998 20.7 58.3 3.8 17.2Grade 12 17,540 25.3 55.4 4.1 15.3Sp. Ed., H.S. 6,623 13.3 77.8 0.7 8.2Non-Graded 315 4.1 90.2 - 5.7Satellite 332 3.6 85.2 - 11.2Apprentices 1,944 62.9 24.7 1.7 10.5

Total 434,042 15.6 60.6 2.6 21.2

158. There are presently 407 schools with enrollments more than 70%black and/or Hispanic (excluding magnet schools):

% Minority No. of Schools Total Enrollment

70-80% 14 7,616 80-90% 37 20,452 90-95% 33 31,189 95-99% 31 28,348 99% + 292 215,554

407 303,159

Those students are 69.8% of the system wide enrollment. There are 275,091students (69.4% of system wide enrollment) attending schools more than90% minority. (Stip. 152)

159. Schools with more than 70% black and/or Hispanic enrollment willincrease in number in coming years, as a result of the demographic andtransfer trends described in Findings 145-57. (Stip. 153)

160. In schools with enrollments more than 90% black and/or Hispanic,1983-84 total kindergarten and pre-school enrollment is as follows:

% Minority K & Pre-school Enrollment

90-95% 3,13095-99% 3,97899% + 22,733

29,841

Such enrollment is projected to be at least as great in school year1984-85, and will probably increase. Kindergarten students representapproximately two thirds of this total, or 20,000 students. (Stip. 154)

161. In schools with more than 90% black and/or Hispanic enrollment,the number of black and Hispanic children in grades 1-3 in school year1983-84 is approximately as follows:

Grade Black Hispanic Total

1 16,913 4,361 21,274 Pre-2 2,369 710 3,079 2 16,497 4,310 20,807 3 15,733 4,002 19,735

Total 51,512 13,383 64,895

Those numbers are projected to be at least as great in school year1984-85, and will probably increase. (Stip. 155)

Propriety and Cost of Programs Proposed for Adequate Implementation of the Plan

201. Dr. Nelvia Brady is a qualified expert as to the effects of racialsegregation on minority children; the nature and types of desegregationprograms that are capable of eliminating or alleviating those effects; thedesign, development and implementation of the Plan; and the ability offederal Chapter 1 and State Title I eligible programs to alleviate theeffects of past segregation. She is presently Associate Superintendent,OEEO, and has primary responsibility for implementation of the Plan.(Brady testimony)

202. Dr. Brady was one of the experts with principal responsibility fordrafting the Educational Components of the Plan. (Brady testimony)

203. In April 1981 Board adopted the Recommendations on EducationalComponents (prepared by its nationally known expert, Dr. Green). ThoseRecommendations accurately explain the justifications for educationalcomponents:

The rationale for this approach lies in the notion that the desegregation of a school system involves much more than the reassignment of students. Too often, desegregation planners have seemed to be concerned only with the movement of students in order to achieve some specified distribution by race and ethnic background. This preoccupation has been matched by a public concern with "busing," as though the question of how a student reached school was more important than what the student received from the school.

Research covering the last thirty years indicates that the physical separation of students by race and ethnic background is almost always accompanied by disparities in the educational services provided 13,383 64,895 to minority and nonminority students, and by significant gaps in the achievement of minority students, particularly those from low-income backgrounds. Stated simply, segregation creates educational deprivation for minority children — black, Hispanic, Asian, and Native American — and also results in attitudinal deprivation for all students.

A desegregation plan must, therefore, address not only the physical desegregation of schools but also the educational desegregation of individual students. The educational disadvantages resulting from past racial/ethnic isolation — or any such isolation that may have to continue — must be remedied. The overriding goal of this plan is to address minority students educational needs arising from the segregation of the public schools. The method being proposed is through improving achievement in all schools, with particular emphasis on those schools with the greatest needs and attended by children who have been the most disadvantaged.

(Brady testimony)

204. Dr. Brady described elements of the Plan that have beenimplemented to date and provided an evaluation of Board's efforts in thisarea. In general that portion of her testimony addressed both the studentassignment aspects of the Plan and the elements of the educationalcomponents of the Plan as to which implementation has already beeninitiated. She also discussed the elements Board intends to implement inschool year 1984-85 if there is sufficient available funding. Morespecific testimony as to the implementation status of the Curriculum,Bilingual and Vocational/Technical Education components was provided byDrs. Gerald Heing, Josue Gonzales, and Philip Viso, respectively(Testimony of Brady, Heing, Gonzales and Viso)

205. Dr. Brady showed Board has experienced significant successes inits implementation efforts to date. Her testimony was supported byevaluations performed during the last two years at the 45 raciallyisolated targeted elementary schools that were first included in theChicago Effective Schools Project. (Brady testimony)

206. Dr. Brady's testimony described the process by which the Plan wasdesigned and developed. She related how past segregation in the Chicagopublic schools has affected the basic learning skills achievement levelsof children, particularly minority children now attending, or who in thefuture will attend, racially identifiable minority schools. She explainedeach component of the Plan is (a) carefully designed to alleviate theeffects of past segregation and (b) will substantially furtherimplementation of a successful desegregation plan. She further explainedthat, given the historic backdrop and the demographics of Chicago, fulland successful implementation of the Educational Components is crucial tothe success of the Plan. (Brady testimony)

207. In substantial part the Educational Components are intended toeliminate or alleviate the effects of past racial segregation on minoritychildren who will remain in racially identifiable schools under theStudent Assignment Plan and who will attend such racially identifiableschools in the future. In pursuit of this goal, the Plan also addressesthe need for systematic and institutional changes in the manner in whichthe school system provides educational services. (Brady testimony)

208. Minority children now attending Chicago public schools suffer, orhave been affected by, one or more of the following effects of racialsegregation:

(a) reading, math and communication skills one grade or more below the students current grade levels;

(b) tests and testing procedures with racial, ethnic, or cultural bias;

(c) unequal treatment of minority children in racially identifiable schools by teachers and administrative staff;

(d) less access for minority children to vocational and technical educational programs;

(e) curricula colored by racial, ethnic or cultural bias;

(f) the psychological pressures of attending racially identifiable schools and the resulting loss of self-esteem;

(g) codes governing student conduct that are affected by racial, ethnic or cultural bias;

(h) speech habits that vary from those used in an environment in which they must ultimately compete;

(i) lack of interpersonal learning experiences derived from open association with other students of varying races, cultures and religions;

(j) lack of access to majority culture, which is reflected in the standards that determine success in society.

(Stip. 155, Brady testimony.)

209. This broad spectrum of inequalities and injuries resulting fromracial isolation cannot be remedied only by student assignment, evenwhere student assignment is available. It requires other remedies,particularly compensatory educational remedies, where student assignmentis unavailable. (Brady testimony)

210. OEEO, in conjunction with other Board departments and units,developed the programs described in Board Ex. 28. OEEO was primarilyresponsible for developing the following program elements:

a. Effective Schools Project

b. Racially Isolated Schools

c. Magnet Schools

d. Trainers Institute

e. Management Information

f. Affirmative Action

g. Equity Compliance

h. Staff Development

i. Within-School Segregation

Board's Department of Pupil Personnel Services andSpecial Education was primarily responsible fordeveloping the Special Education and Discipline programelements.Its Department of Vocational and Technical Education wasprimarily responsible for developing the Vocational andTechnical Education programs elements. Its Department ofCurriculum and Instruction was primarily responsible fordeveloping the curriculum program elements. ItsDepartment of International and Multi cultural Educationwas primarily responsible for developing the bilingualprogram. Its Department of Research and Evaluation wasprimarily responsible for developing the program toevaluate the results of Plan implementation. (Brady,Viso, Heing and Gonzales testimony)

211. Board's original version of proposed Board TrialEx. 28 was provided to the United States on or aboutSeptember 16, 1983. (Response to Board's Second Set ofRequests to Admit, No. 28)

212. Dr. Brady reviewed each program in Board Ex. 28and testified each program was designed to implement theEducational Components of the Plan, would significantlyalleviate the effects of past segregation and wasnecessary for a successful desegregation effort inChicago. She described how each program element wasdeveloped, how each works or is expected to work and howeach relates to one or more of the Plan's EducationalComponents. She testified each of those program elementsmaterially aids successful implementation of the Plan byalleviating the effects of past segregation. Hertestimony also explained how the cost of each elementwas calculated. This Court has considered in detail (a)Board's proof on an item-by-item basis (including allsubmitted Exhibits and this Court's own notes on all thetestimony made during the course of the hearing,supplemented where necessary by review of thetranscript), (b) the United States specific objections(as articulated at the hearing and as filed in apost-hearing memorandum April 20, 1984) and (c) Board'sdetailed post-hearing response filed April 30. In sodoing this Court has applied the standards taught by theLiddell and Arthur cases discussed in the Conclusions.It has paid close attention to drawing the line betweenprograms that will materially aid successfulimplementation of the Plan and those that have a moregeneralized primary focus of improving the quality ofgeneral education in the school system. Except to theextent reflected by these Findings and Conclusions,Board's last response to the United States argument asto "specific failures of proof contained in the Board'spresentation" is wholly persuasive, and the objections ofthe United States are therefore rejected.

213. In school years 1981-82 and 1982-83,implementation of the Plan's Educational Componentsincluded the introduction and implementation ofEffective Schools Project ("ESP") programs at 45specially targeted racially identifiable schools and theimplementation of certain elements of the ESP program atother racially identifiable schools. The 45 speciallytargeted schools are:

District School

3 Schiller 4 Hay Branch 5 Lowell Morton Stowe 6 Anderson Diego LaFayette Moos Von Humboldt Yates 7 Beidler Douglas Middle Goldblatt Melody Tilton 8 Chalmers Komensky 9 Dett Dodge Herbert Medill Primary Smyth Suder 10 Frazier Henson Lawndale 11 Donoghue Douglas Einstein Williams

District School

12 Filton Branch Sherman

13 Beethoven Burke Colman Farren Hartigan McCorkle Parkman 14 Oakenwald South Robinson Branch Wadsworth 15 Raster Raster Branch

(ADR II; Brady testimony; Board Ex. 112)

214. Those target schools were selected from among all raciallyidentifiable schools in the system on the basis of a comparative needevaluation. First, all racially identifiable schools were ranked lowestto highest based on achievement test scores in reading and math, with adouble weighting for reading, over a two-year period. In addition,attendance and student mobility statistics and the extent of racialisolation were taken into consideration in the ranking process. Thatprocess produced a ranked list of the lowest-achieving most raciallyidentifiable schools in the system, and the 45 lowest on the list werechosen as target schools. (Brady testimony)

215. For school year 1983-84 the complete ESP program was continued atthe 45 target schools and implemented for the first time at the 62additional racially identifiable schools (including 7 educationalvocational guidance centers) listed below:

District School

2 Gale Academy Marti Bilingual Education Center 3 Byrd Academy Jenner Elementary Mulligan Elementary 4 Howe Elementary 5 Avondale Elementary Morton E.V.G.C. Noble Elementary Piccolo Middle School Ryerson Elementary L. Ward Elementary Write Elementary 6 Anderson E.V.G.C. Chopin Elementary Koscuiszko Elementary Atis Elementary 7 M. Clark Middle School DePriest Elementary Ericson Elementary Roetgen E.V.G.C. Spencer Elementary 8 Bethune Elementary Hammond Elementary Howland Elementary Lathrop Elementary Pope elementary Spry Elementary 9 Brown Elementary Grant Elementary Irving Elementary McKinley E.V.G.C. Medill Intermediate & Upper Grades 10 Gregory Elementary C. Hughes Elementary McCormick Elementary Webster Elementary 11 Abbott Elementary Drake E.V.G.C. Mayo Elementary 12 Copernicus Elementary Fulton Elementary 13 Dyett Middle Hope Community Academy Ross Elementary Terrell Elementary 14 Dulles Elementary Mollison Elementary Price Elementary Woodson North Elementary 15 O'Toole Elementary 16 Bass Elementary Goethals E.V.G.C. Kershaw Elementary Low Upper Cycle 17 Bryn Mawr Elementary Revere Elementary 19 J.N. Thorp Elementary J.N. Thorp E.V.G.C. 20 Carver Middle School Kohn Elementary(Board Exs. 30 and 112; Brady testimony)

216. Those 62 additional schools chosen to participate in the full ESPprogram in school year 1983-84 were selected through the same meansinitially used to select the 45 target schools. Using the formula statedin Finding 214, all racially identifiable schools in the system wereagain listed in order in the fall of 1983, with the lowest achieving mostracially identifiable school ranked first. After the 45 targeted schoolsalready participated in the ESP programs were deleted from the list (asautomatic continuing participants), the 62 lowest ranking schoolsremaining on the list were selected for implementation of the full ESPprogram in school year 1983-84. (Brady testimony)

217. Implementation of the full ESP program at those 62 schools ispossible only because of the $20 million appropriation to Board pursuantto the Yates Bill (discussed in later Findings), which provided only aone-year appropriation of funds. Board currently lacks the financialresources to continue the ESP programs at those 62 schools in school year1984-85. (Brady and Glasper testimony)

218. Board Exs. 28, 31, 32, 110 and 117 accurately describe the fullESP programs implemented at 107 racially identifiable Chicago publicschools. Those ESP programs were implemented in school year 1983-84 inaccordance with the Plan set forth in Board Ex. 30. (Brady testimony)

219. Implementation of the full ESP program at the 107 schools inschool year 1983-84 has not involved duplication of other desegregationprograms previously placed in those schools, which Board is continuing toimplement. Implementation of the full ESP program at those 107 schoolsand at an additional 100 racially identifiable Chicago public schools inschool year 1984-85 will involve only minor duplication of alreadyexisting desegregation programs in those schools. (Brady testimony)

220. Board's essential purpose for its ESP program is to improveinstructional effectiveness in racially identifiable schools in order toimprove educational outcomes for black and Hispanic children. That meansimproving achievement levels, attendance, discipline and the likelihoodof a student's successfully moving to the next school level or intosociety in general. This is accomplished by programmatic interventionsaddressing six major areas: instructional emphasis, including increasedtime on task; leadership; use of assessment data; parental support andinvolvement; general school climate; and staff development and training.Among the elements of the ESP program designed to increase a student'stime on task are extended-day and extended-year instruction, and full-daykindergarten instruction. (Brady testimony)

221. One of the major goals of the ESP program, as described in BoardExs. 28, 31, 32, 110 and 117, is to reduce the gap in achievement levelsbetween national grade level norms and the achievement levels of minoritychildren now attending, or who will attend, racially identifiable schoolsin the system. (Brady testimony)

222. "Effective schools" as a concept is based on educational researchthat suggests if the proper learning conditions are created, allchildren, regardless of their race and the racial composition of theschool they attend, can learn. "Effective schools" as a model is animportant structure for ensuring implementation of effective educationalremedies at racially identifiable schools. It serves as a primary focusfor implementation of the Plan's Educational Components, particularlythose in curriculum-related areas. Board's "Effective Schools Project" isderived from and supported by the leading research in "effective schools"learning. (Brady testimony)

223. Board's inservice training component at each ESP school is alocal, school specific program that provides staff with the specializedskills necessary effectively to implement the Plan's educationalremedies. Each school's teaching staff is or will be receiving trainingintended to eliminate unequal treatment of minority pupils byraising each staff's awareness of its possible racial biases and bymodifying any biased attitudes, expectations and behaviors toward theteaching of minority pupils. Each school's teaching staff also is or willbe receiving training designed to develop the specialized skills,instructional methods and educational techniques necessary effectively toteach and to increase the academic achievement of minority pupils whomust remain in racially identifiable schools. Each ESP school's inservicecomponent is directed toward instructing staff in meeting the particulareducational needs of minority pupils and in adapting existinginstructional approaches to meet those needs successfully. (Bradytestimony)

224. Board's ESP program described in Board Exs. 28, 30, 31, 110 and117, as implemented in 107 racially identifiable schools in school year1983-84, materially aids the successful implementation of the EducationalComponents of the Plan. That ESP program eliminates or alleviates theeffects of racial segregation on minority children in that it raises theachievement levels of minority children, ends the unequal treatment ofminority children in racially identifiable schools by teachers andadministrative staff, and reduces the psychological pressures ofattending racially identifiable schools and the resulting loss ofself-esteem. (Brady testimony)

225. Implementation of the ESP program in the 45 racially identifiabletarget schools in school years 1981-82 and 1982- 83 has raised the medianlevel achievement scores of minority children as described in Board Exs.36, 37 and 38 (as substituted and modified by Board Ex. 91). (Bradytestimony)

226. To close the existing gap in grade level norms and achievementlevels between students in integrated schools and minority studentsattending racially identifiable schools, it will be necessary toimplement the full ESP program in the 45 original target schools foranother 3 to 5 years and in the 62 additional racially identifiableschools for another 4 to 6 years. (Brady testimony)

227. With adequate funding, Board would continue to implement the fullESP program in those 107 schools in school year 1984-85. In addition, itwould implement the full ESP program in the next 100 lowest rankingschools as determined by the same formula ("Level II schools"). (Bradytestimony)

228. Board Ex. 28, as modified by Board Ex. 117 and Dr. Brady'stestimony, sets forth the projected cost of implementing a full ESPprogram in 207 racially identifiable schools for school year 1984-85.Those cost figures are reasonable under the circumstances shown attrial. (Brady testimony; Glasper testimony)

229. Board Ex. 28, as modified by Board Ex. 117 and Dr. Brady'stestimony, sets forth the estimated cost in school year 1984-85 ofimplementing certain components of the ESP program at raciallyidentifiable schools ("Level III schools") not participating in the fullESP program. Those projected cost figures are a reasonable estimate underthe circumstances shown at trial. If the estimate of $10 million were toprove inaccurate, the figures could be adjusted by reducing the UnitedStates payment to Board in a subsequent year. (Brady testimony; Glaspertestimony)

230. Board Ex. 31 sets forth the amount Board expects to spend inschool year 1983-84 for implementing certain components of the ESPprogram at the 100 Level II racially identifiable schools not currentlyparticipating in the full ESP program. Those projected cost figures arereasonable under the circumstances shown at trial. (Brady testimony;Glasper testimony)

231. To implement the Educational Components of the Plan, Board must ata minimum implement certain components of the ESP program at both the 100Level II schools and the Level III schools. Such components to beimplemented at the nonparticipant racially identifiable schools are thosethat require full-day kindergarten at each of those schools, the use ofextended day and extended-year instruction, and the inservice training ofstaff at those schools.For the reasons stated in Finding 224, implementation of those componentsof the ESP program at racially identifiable schools not participating inthe full ESP program will materially aid the successful implementation ofthe Educational Components of the Plan. (Brady testimony; Glaspertestimony; Board Ex. 117)

232. With adequate funding, Board would implement a full ESP program atthe 100 Level II schools. Such full implementation would materially aidsuccessful implementation of the Educational Components of the Plan forthe reasons stated in Finding 224. Board's cost of such implementation inschool year 1984-85 would be as shown on Board Ex. 117 and would bereasonable under the circumstances. Full implementation at those schoolswould reduce the cost of implementing certain ESP components at raciallyidentifiable schools not participating in the full ESP program toapproximately $10 million. (Brady testimony; Board Ex. 117)

233. Board Ex. 28 represents an initial estimate, prepared in Augustand September of 1983, of the cost and budget breakdown of the programcomponents (and the program elements) designed materially to aid theimplementation of the Plan (Brady testimony). Board Ex. 117 was preparedby the OEEO staff, under the direction and supervision of Dr. Brady, inresponse to requests made by the United States and this Court during thecourse of this hearing. Board Ex. 117 reflects the cost in school year1984-85 of implementation of the full ESP program at 207 schools and thepartial implementation of the ESP program at all other raciallyidentifiable schools (Brady testimony). It also reflects:

(a) corrections of errors and duplications in Board Ex. 28;

(b) consideration of the fact that the detailed line-by-line budget breakdown by cost category for certain of the program elements differs slightly from that initially set forth in Board Ex. 28;

(c) consideration of the fact certain of the program elements set forth in Board Ex. 28 were funded in part in school year 1983-84 by Board incremental desegregation expenditures and the fact Board is expected to provide $67.7 million for incremental desegregation expenditures in school year 1984-85, thereby enabling Board to provide continued funding for certain of the program elements included in Board Ex. 28;

(d) consideration of the fact certain of the items funded in school year 1983-84 are one-time costs and will not recur in subsequent years.

(Brady testimony) With respect to program componentsfunded in school year 1983-84 with moneys appropriatedby the Yates Bill, Board Ex. 117 contains three columnsof numbers: the first representing the line-by-linebudget breakdown of costs as set forth in Board Ex. 28;the second representing those portions of programelements actually funded in 1983-84; and the thirdrepresenting the amount required to implement thoseprograms in school year 1984-85. (Brady testimony) Withrespect to program components funded in school year1983-84 with incremental Board funds, Board Ex. 117contains four columns of numbers: the first representingthe line-by-line breakdown of costs as set forth inBoard Ex. 28; the second representing those portions ofprogram elements actually funded in school year 1983-84;the third representing the amount required to implementthose programs in school year 1984-85 (afterconsideration of non-recurring costs; and the fourthrepresenting the amount Board will not be able to fundfrom its own resources in school year 1984-85, despiteits good faith efforts.) (Brady testimony)

234. Board's Trainers Institute program is intended tobuild within the Chicago public school system theinternal capacity to provide inservice training toteachers and staff for implementation of the StudentAssignment Plan and the Educational Components, andgenerally for the education of minority children inracially identifiable schools. That Institute willmaterially aidsuccessful implementation of the Plan. It will eliminateor alleviate the effects of racial segregation onminority children in that it will assist the raising oftheir achievement levels and help end the unequaltreatment of minority children in racially identifiableschools by teachers and administrative staff. (Bradytestimony)

235. With adequate funding, Board would fullyimplement the Trainers Institute in school year1984-85. Board Ex. 117 sets forth the projected cost ofimplementing the Trainers Institute in 1984-85. Thatcost is reasonable under the circumstances. (Bradytestimony; Glasper testimony)

236. Board's Management Information System is intendedto establish and maintain a comprehensive informationsystem to collect, analyze, review and disseminate datarelated to all desegregation activities under theEducational Components and the Student Assignment Plan.That System materially aids successful implementation ofthe Plan by tracing and measuring progress in achievingthe goals of the Plan. Board Ex. 117 sets forth theprojected cost of the System. That cost is reasonableunder the circumstances. (Brady testimony; Glaspertestimony)

237. Board's Equity Compliance program described inBoard Ex. 28 is intended to manage programexpenditures, gather OEEO statistical data, carry outdesegregation reporting functions, monitor and auditdesegregation activities and establish means to measureand assess compliance with the Plan. Each component ofthat program will materially aid successfulimplementation of the Educational Components of thePlan. Certain aspects of the program were implemented inschool year 1983-84, as detailed in Board Ex. 31 and117. Its cost of implementation in school year 1984-85,as set forth in Board Ex. 117, is reasonable under thecircumstances. (Brady testimony; Glasper testimony)

238. Board's system wide Staff Development program forracially identifiable schools, described in Board Ex.28, is intended to provide staff with the informationand skills necessary to implement effectively the Plan'seducational components. Through twelve majorconferences, staff from all racially identifiableschools will receive a general overview in manydesegregation-related areas, including the requirementsof the Plan, and methods of ensuring equal educationalopportunity in a racially identifiable school. Specifictopics encompassed in those conferences will addressmulti-cultural awareness and teaching approaches,effective discipline techniques, classroom managementand instructional strategies to raise minority pupilsacademic achievement. General staff development providedthrough the program is intended to introduce staff toproblems in implementing the Plan, and to increasestaff's effectiveness in dealing with the problemsaddressed. (Brady testimony)

239. Board's Staff Development program for theracially identifiable schools will materially aidsuccessful implementation of the Plan. It will eliminateor alleviate the effects of racial segregation onminority children in that it will assist teachers inraising the achievement levels of the children and itwill help in ending the unequal treatment of minoritychildren in racially identifiable schools by teachersand staff. Its consultant component is required to hirespecialists to conduct inservice training conferences.Those consultants are necessary to implement the StaffDevelopment program. Board Ex. 117 sets forth theprojected cost of the program for school year 1984-85.That cost is reasonable under the circumstances. (Bradytestimony; Glasper testimony)

240. Board's system wide Staff Development program forDesegregated Schools, described in Board Ex. 28, isintended to provide staff with general information andan overview of skills necessary to effectively implementthe Plan's student assignment and educationalcomponents. Staff from desegregated schools will receivetraining in many areas, including the requirements ofthe Plan, multi-cultural awareness and teachingapproaches, effective discipline techniques and classroommanagement in a desegregated setting.That program will materially aid the successfulimplementation of the Plan. It will eliminate oralleviate the past effect of racial segregation onminority children now attending desegregated schools byassisting teachers in raising their achievement levels.It will also assist in the effective implementation ofthe Plan by raising staff awareness of and eliminatingits unequal treatment of minority pupils in desegregatedschools. As set forth in Board Exs. 28 and 117, the costof that program is reasonable under the circumstances.(Brady testimony; Glasper testimony)

241. Board's Within-School Segregation Program isintended to gather information about the racialcomposition of classrooms and to monitor the assignmentof students to classrooms within particular schools.That program will materially aid successfulimplementation of the Plan. It will eliminate oralleviate the racial segregation of students inclassrooms through, for example, forms of "tracking" or"ability grouping." It will accordingly ensure thatstudents are actually taught, insofar as ispracticable, in a physically desegregated environment.Board Ex. 117 sets forth the cost of the program forschool year 1984-85. That cost is reasonable under thecircumstances. (Brady testimony; Glasper testimony)

242. Board's Magnet Schools programs, described inBoard Ex. 28, are intended to construct new magnetschools, develop and expand special curriculum offeringsat certain racially identifiable schools, and provideinservice training and staff development at 150 magnetschools and magnet programs. Specialized curriculumofferings or magnet programs will be introduced orexpanded at racially identifiable "community academies"as part of the special educational improvements andremedies required by the Plan. Staff training andadvisory services are necessary and will materiallyassist staff in planning and developing the expandedcurriculum offerings and in successfully introducingthem in racially identifiable schools. Except as statedin Finding 243, the Magnet School programs described inBoard Ex. 28 will materially aid successfulimplementation of the Plan. Board Ex. 117 sets forth thecost of those programs for school year 1984-85. Thatcost is reasonable under the circumstances. (Brady,Glasper, Viso testimony)

243. Board did not demonstrate the proposedResidential Magnet High School would have sufficientmarginal utility (on the testimony it would serve onlyabout 200 students), in relation to its more than $9million cost, so as to justify a finding the school willmaterially aid successful implementation of the Plan. Byway of contrast, although the proposed AgriculturalMagnet High School is also challenged by the UnitedStates as insufficiently related to the purposes of thePlan, the testimony establishes that school would meet ademonstrated need and serve minority students in amanner that meets the standard stated in Finding 242.That is also true of all the other Magnet Schoolprograms.

244. Board's Staff Development Program at the 150magnet schools and magnet programs, as referred to inFinding 242, is intended to meet school specific needsrelated to the particular school's curriculum, includingmaintaining the consistency of the magnet program withsystem wide standards, training teachers in instructingstudents in the special magnet program offering, andplanning, developing and refining the magnet program tomaintain its quality. That program also will train staffin multi cultural awareness, teaching approaches andclassroom management in a desegregated school. Itspurpose is to enhance the likelihood that magnet schoolsand magnet programs will develop and maintain thequality curriculum and school climate necessary toattract a desegregated student body. (Brady testimony)

245. Each component of the Staff Development Programreferred to in Findings 242 and 244 is directly relatedto the Plan and will materially aid its successfulimplementation by raising minority pupil achievement,eliminating unequal treatment of minority pupils, andachieving andmaintaining physical desegregation in schoolpopulations. With adequate funding the Board wouldimplement those components of its magnet school programin school year 1984-85. Board Ex. 117 sets forth thecost of implementing those components in school year1984-85. That cost is reasonable under thecircumstances. (Brady testimony; Glasper testimony)

246. Board's Special Education/Testing programdescribed in Board Ex. 28 is intended to implement and,as required by the Plan, to validate procedures designedto ensure non-discriminatory assessment and placement ofstudents in educable mentally handicapped classes.Consultants and inservice programs are necessary toprovide Board staff with the skills to evaluate whetherits current assessment procedures are accurate and raceneutral. In addition the Special Education/Testingprogram is intended to provide transition services andspecial educational support for students who werepreviously placed in mentally handicapped classes, basedupon potentially biased assessment instruments, and whoare now being returned to the regular classroom.Inservice training is required to provide teachers andother staff with awareness of and the skills to dealwith such students special educational needs during theperiod of their transition to the regular classroom.(Brady testimony)

247. All components of the program described inFinding 246 will materially aid Board's implementationof the Plan. It will eliminate or alleviate the effectsof racial segregation on minority pupils by assistingtheir return to regular classrooms and thus raisingtheir achievement levels, and it will help end theunequal assessment and placement of minority pupils inspecial education classes. Its cost for school year1984-85, as set forth in Board Ex. 117, is reasonableunder the circumstances. (Brady testimony; Glaspertestimony)

248. Board's Vocational and Technical EducationProgram, as described in Board Exs. 28 and 116, isintended to provide vocational educational informationto staff and students, to recruit minority students forvocational education classes, to provide vocationaleducational support services for minority students, andto expand and adapt vocational education programofferings to increase the opportunity for minoritystudents to participate in vocational educationprograms. Inservice training and consultant services arerequired to acquaint teachers with vocational educationopportunities open to minority pupils, to improve thestaff's skills and capabilities effectively to providevocational education services to minority students, andto assist staff in planning, developing and effectivelyproviding additional vocational program offerings tostudents. These inservice and consulting components aredirectly related to the Plan and will materially assistin implementing its Vocational and Technical Educationprogram. (Brady testimony; Viso testimony)

249. Except as stated in Finding 250, the componentsof the Vocational and Technical Education program willmaterially assist the Board in implementing the Plan.They will alleviate or eliminate the effects of pastsegregation in vocational and technical educationprograms by various activities intended to end theunequal participation of minority students in theseprograms. Their respective costs for school year1984-85, as set forth in Board Ex. 117, are reasonableunder the circumstances. (Brady testimony; Visotestimony; Glasper testimony)

250. One component of the Vocational and TechnicalEducation program testified to by Dr. Viso (theHandicapped component) cannot fairly be included in thecost of the Plan for current purposes. On the presentrecord it lacks a sufficient nexus to the purposes ofthe Plan — as compared with the general goal ofimproving the overall quality of education. Though inits post-hearing submission Board stated that blacksrepresent a higher percentage of EMH students in thesystem (about 81%) than their percentage of total schoolenrollment (about 61%), no testimony established whatpercentage EMH students were of the total "Handicapped"group that could be assisted by the program. Thus thetestof materiality is not satisfied. This is simply a matterof inadequacy of proof, and to the extent such proof maybe sharpened in subsequent years the item may perhaps beallowable. This Court of course recognizes that most ofthe other Vocational and Technical Education componentsalso involve estimates, but each of those estimates issufficiently reasonable (and not effectively challengedby the United States) to satisfy Board's burden ofproof. In any case Board will be fully accountable forits use of funds, and to the extent there may prove tobe any over-allocation as to any item based on actualexperience, adjustments in the United States payments toBoard can be made in future years.

251. Board's Department of Curriculum activitiesrelated to its Plan needs, as described in Board Exs. 28and 114, are intended to ensure that curriculumofferings are consistent with the goals of theeducational components and modified and refined to meetthose goals. Desegregation-related activities in theDepartment of Curriculum will include planning,developing and implementing the special curriculumimprovements required by the Plan's EducationalComponents, coordinating those improvements andmonitoring their consistency with system wideeducational goals, maintaining the curriculum and coursequality of the special educational programs required bythe Educational Components. All inservice and advisorycomponents of those programs are necessary to provideBoard staff with the information and skills to plan andprovide effectively the various curriculum developmentand implementation activities necessary to achieve theoverall goals of the educational components. (Bradytestimony; Heing Testimony)

252. Except as stated in Finding 253, the componentsof the Curriculum and Instruction program willmaterially assist the Board in implementing the Plan byraising the achievement levels of minority students andmaintaining or enhancing the quality of curriculumdesigned to raise the achievement of minority students.Board Ex. 117 sets forth the cost of implementing thesecurriculum and instruction activities in school year1984-85. That cost is reasonable under thecircumstances. (Brady testimony; Heing testimony;Glasper testimony)

253. "High School Renaissance," as described in Dr.Heing's testimony, was not sufficiently distinguishedfrom Board's ordinary goals of system-upgrading tojustify inclusion of that program in Plan costs. Dr.Heing referred to providing a "strengthened diploma"— of course a commendable goal, but one thatappears clearly on the other side of what is admittedlynot always a bright line distinction between (a) Planimplementation and (b) general benefits to educationalgoals of the school system as a whole.

254. Board's Student Discipline program, described inBoard Ex. 28, is intended to provide discipline managersin schools who will enforce the Uniform DisciplineCode, provide training to staff in the provisions of theCode and behavior modification techniques, develop andoperate in-school suspension and behavior improvementprograms as an alternative to suspension, and monitor andreport on disciplinary infractions. That program willmaterially assist the Board in implementing the Plan byeliminating or alleviating unequal disciplinarytreatment of minority pupils. Its cost for school year1984-85, as set forth in Board Ex. 117, is reasonableunder the circumstances. (Brady testimony; Glaspertestimony)

255. Board's Bilingual Education programs, asdescribed in Board Ex. 28, are intended to assist inachieving the national origin desegregation required bythe Plan. Activities that would be undertaken includeestablishing special "immersion" educational programs toinstruct pupils in their native languages until they canmake the transition to regular classrooms, developing aspecial curriculum responsive to the needs of bilingualstudents, performing research on the educational needsof bilingual and limited English proficient students,and recruiting qualified bilingualteachers. Inservice training and consulting activitiesare necessary to provide staff with the skills toconduct research, plan and develop bilingual and limitedEnglish proficient education programs, and effectivelyto instruct bilingual and limited English proficientstudents. (Brady testimony; Gonzales testimony)

256. Except for Statewide Network (which was withdrawnby Board), each component of the Bilingual Educationprogram will materially assist Board in implementing thePlan. Each will alleviate or eliminate the effects ofsegregation on bilingual or limited English proficientstudents in that it will assist the raising of theiracademic achievement and help end the unequal treatmentof and unequal educational opportunities available tothose children. Each component's cost for school year1984-85, as set forth in Board Ex. 117, is reasonableunder the circumstances. (Brady testimony; Gonzalestestimony; Glasper testimony)

257. Board's Evaluation program described in BoardEx. 28 is intended to permit OEEO to collect, analyzeand evaluate information to determine the overalleffects of the Plan, as implemented, and to indicateareas where programs must be refined or modified toachieve the Plan's goals. Consultant and inserviceprograms are necessary to provide staff with the skillsto conduct this research and evaluate the effects of thePlan. This Program will materially aid the successfulimplementation of the Plan by providing informationnecessary to continue and correct implementation of theplan and to reach the Plan's goals. Board Ex. 117 setsforth the costs of the Evaluation Program for schoolyear 1984-85. That cost is reasonable under thecircumstances. (Brady testimony; Glasper testimony)

258. Inservice training and staff development programsdescribed in various of Findings 223-57 do not duplicateeach other and do not duplicate other inservice trainingprovided by Board. Each program-related training or staffdevelopment activity will address specific needs andtopics related to the program it will assist inimplementing. Those program-specific needs will not beaddressed to the extent required effectively toimplement the programs in the Educational Components inthe general, system wide desegregation related staffdevelopment programs operated by OEEO, nor in any otherof Board's ongoing staff development activities. (Bradytestimony)

259. All costs (with reference both to the totalamount and to the amount Board is unable to fund despiteits every good faith effort) of the program elements setforth in Board Ex. 117 are reasonable estimates of theamounts needed to implement such programs. (Testimony ofBrady, Viso, Heing, Gonzalez and Glasper) Those costsrepresent appropriate modifications, where required, ofcosts originally reflected in Board Ex. 28. In turn, thecost attributable to each program element of Board Ex.28 was included therein after consultation between theBudget Office, OEEO and central office administrativepersonal responsible for the preparation thereof. (Bradyand Glasper testimony) Those projected costs werereviewed and verified by Board's Office of Budget andFinancial Planning. (Glasper testimony)

260. of the $108 million in program componentsidentified by Board Ex. 28, approximately $6 million isbeing funded by Board resources in school year 1983-84.(Glasper testimony)

261. Another $20 million, appropriated by the YatesBill, is being devoted to Board Ex. 28 programcomponents during the second half of the 1983-84 schoolyear. (Brady testimony) Board Ex. 31 sets forth thoseelements of the Educational Components of the Plan thatare being funded by the $20 million appropriated by theYates Bill. (Brady testimony)

262. Board Exs. 31, 35, 41 and 113 accurately describethe desegregation programs and anticipated expendituresof Board during school year 1983-84. Those include theapproximately $57 million in expenditures for programscontinued from school year 1982-83, the plannedapproximately $10million increase in desegregation expenditures forschool year 1983-84 (further described in Board Exs. 35and 113), and the $20 million in anticipatedexpenditures resulting from by the Yates Bill (furtherdescribed in Board Ex. 31). Each of the programsdescribed in those Exhibits is necessary for adequateimplementation of the Plan and materially aids in theimplementation of the Plan. (Glasper testimony; Bradytestimony)

263. Neither Board Ex. 28 nor Board Ex. 117 makes anyprovision for increases in employee compensation over andabove the levels in effect for the 1982-83 school year.They do not, for example, take account of the 5% salaryincrease agreed to by Board and the Chicago TeachersUnion for the 1983-84 school year or of any such futuresalary increases that may be negotiated between Boardand its employees. (Glasper testimony)

264. Set forth after Finding 265 is a chart thatreflects the adjustments to Board Ex. 28 made by BoardEx. 117 (as described in Finding 233) and that reflectsthe 5% salary increase5. implemented in school year1983-84 referred to in Finding 263. Set forth on thefollowing seven pages are individual charts that reflectsuch adjustments made for each of the program componentsfor which there is more than one program element: StaffDevelopment, Magnet Schools, Special Education/Testing,Vocational/Technical Education, Curriculum, BilingualEducational and Evaluation (Brady and Glaspertestimony).

265. As reflected by the attached charts, the level offunding adequate for full implementation of the Plan inschool year 1984-85 (as modified to reflect Findings243, 250 and 253) is approximately $171.631 million. ofthat amount, Board has been able to budget approximately$67.773 million, leaving an increment of approximately$103.858 million that Board, despite its best efforts,will not be able to fund. For planning purposes, it canreasonably be assumed that approximately $171.631million will be necessary for adequate implementation ofthe Plan in subsequent school years. (Brady testimony)

As Revised by Exhibit 117 to Reflect (A) Full Implementation of the Effective Schools As Revised to Project, at Level I and Level Reflect the II School (B) Partial Implementation Term of the As Revised by at Level III Costs Set Forth Exhibit 117 to Schools (C) Consideration of As Shown on in the Program Reflect Correction Non-Recurring Costs and (D) As Revised to Reflect the Page 1 of Sheets Included of Errors Assumed Continuation of Incremental Effect of the 5% Salary Increase Program Exhibit 28 in Exhibit 28* and Duplications Board Funding in 1984-85 Implemented in 1983-84

Effective Schools Level I $20,841,218 $20,841,218 $21,741,218 $24,176,273 $22,408,163 $25,037,712 $23,269,602 Level II ----- ------ ------ 20,288,726 21,093,741Trainers Institute 563,678 563,678 567,678 144,599 167,211Racially Identifiable Schools Level II 17,000,000 17,000,000 17,000,000 ----- ----- Level III ----- ----- ----- 10,000,000 10,000,000Management Information 371,230 371,230 371,230 46,230 48,079Affirmation Action 364,475 364,475 364,475 136,666 136,666Eqity Compliance 564,808 564,808 564,808 406,562 416,107Staff Development 2,760,495 2,760,495 1,847,519 1,474,319 1,288,390 1,535,761 1,359,021Within SchoolSegregation 134,425 134,425 134,425 134,425 139,592Magnet Schools 19,678,850 19,407,350 19,407,350 19,407,350 17,607,895 19,607,895 8,916,895Special Education/Testing 2,017,870 2,017,870 2,017,870 563,608[fn***] 606,613Vocational/Tech 22,648,444Education 25,991,634 24,423,954 24,468,599[fn**] 24,018,639[fn****] 22,197,484[fn****] 24,018,639 21,547,987Curriculum 6,280,433 6,280,433 6,280,433 4,604,339 4,796,478 3,883,289

Student Discipline 6,963,390 6,963,390 6,963,390 6,963,390 7,233,940Bilingual Education 4,514,215 4,483,257 4,478,257 4,296,153 4,136,703 4,486,323 4,321,386Evaluation 738,747 738,747 738,747 701,226 718,513 Total 108,785,468 106,915,330 117,362,505 111,987,861 120,043,270 103,858,642

* With regard to the Magnet Schools, Vocational/Technical Education and Bilingual Education components, the amountshown on p.1 of Exhibit 28 does not equal the sum of the costs shown for each of the program elements include therein.This column reflects the projected total costs for these program elements, as reflected by the program budget sheetsinclude in Exhibit 28.

[fn**] As revised by Exhibit 116 with respect to the Vocational Assessment program element (Viso Testimony) andBoard Post-Trial Brief.

[fn***] Reflects considerstion of $222,655 of incremental Board funds available for other purposes (Special Education— Reassessment Validation) and assumes this amount will be used to fund other elements of the Special Educationcomponent.

[fn****] See accompanying chart for Vocational Educational program elements.

As Revised by Exhibit 117 to Reflect the Consideration of As Revised by Exhibit Non-Recurring Costs and As Revised to Reflect As Reflected in the 117 to Reflect the the Assumed Continuation the Effect of 5% Salary Budget Sheets Set Forth Correction of Errors of Incremental Board Increase Implemented Program in Exhibit 28 Duplications Funding in 1984-85 in 1983-84

Staff DevelopmentRacially Identifiable School $2,181,470 $1,268,494 $895,294 $709,365 $932,012 $755,263Staff Development — 100 Schools 579,025 579,025 579,025 603,749 Total $2,760,495 $1,847,519 $1,474,319 $1,288,390 $1,535,761 $1,359,021

Magnet SchoolsResidential High School $9,251,000 $9,251,000 $9,251,000 $9,251,000 -0-School for AgriculturalSciences 3,000,000 3,000,000 3,000,000 3,006,152Program Expansion 3,001,600 3,001,600 3,001,600 3,079,480Staff Development 2,017,500 2,017,500 2,017,500 577,500 2,028,375 588,375Centralized Enrollment 121,250 121,500 121,500 126,088Bus Aides 2,016,000 2,016,000 2,016,000 2,116,800 Total $19,407,350 $19,407,350 $19,407,350 $17,967,350 $19,607,895 $8,916,895

Special Education/TestingSpecial Ed/Testing/Transition $1,452,870 $1,452,870 $786,263 $818,963Assessment Techniques 565,000 565,000 -222,655 -212,350 Total $2,017,870 $2,017,870 $563,608 $606,613

Vocational/Tech EducationCommunity Resource Data Bank $311,750 $311,750 $306,017 305,543 306,017 305,543Wn.borne Trade School 14,125,000 14,125,000 13,865,251 13,843,753 13,865,251 13,843,753Maximizing Training Levels 30,000 30,000 29,448 29,403 29,448 29,403Vocational Articulation 955,660 955,660 938,086 936,632 938,086 936,632Handicapped Component 662,692 662,692 650,505 649,497 650,505 -0-Limited English Proficient Component 989,020 989,020 970,832 969,327 970,832 969,327Student Service Corporation 771,902 771,902 757,707 756,532 757,707 756,532Vocational Assessment 6,577,930 6,623,575*4,802,420*6,500,793 4,706,798 6,500,793 4,706,798 Total 24,423,954 24,468,599 22,648,444 24,018,639** 22,197,484[fn**]24,018,639[fn***]21,547,987[fn***]

* As revised by Ex. 116. (Viso Testimony) and Post-Trial Brief.

[fn**] All items funded in 1983-84 are considered non-recurringcosts. (Brady Testimony) Unfunded recurring costs for 184-85 areallocatedproportionately among program elements.

[fn***] No revision is made to reflect 5% salary increase as aresult of the pro rata allocation of "unfunded recurring" costsamong program elements.

As Revised by Exhibit 117 to Reflect the Consideration of Non-Recurring Costs As Revised by Exhibit and the Assumed As Revised to Reflect As Reflected in the 117 to Reflect the Continuation of the Effect of 5% Salary Budget Sheets Set Correction of Errors Incremental Board Increase Implemented Program Forth in Exhibiit 28 and Duplications Funding in 1984-85 in 1983-84Curriculum

Staff — Program Planning $144,688 $144,688 $387,856* $387,856[fn**]Computer System 15,230 15,230 * [fn**]Staff — Program Review 198,244 198,244 198,244 201,944High School Renaissance Program 1,213,839 1,213,839 867,849 913,189 -0-Staff — Implementation 527,481 527,481 * [fn**]Summer Curriculum Writing Teams 196,380 196,380 196,380 206,174Bureau of Language Arts 385,831 385,831 385,831 399,162Intensive Writing Improvement Program 1,823,820 1,823,820 1,823,820 1,908,195Staff — Coordination of New Programs 586,361 586,361 * [fn**] CMLMP Handbook 47,822 47,822 47,822 50,135Paideia Programs 998,352 998,352 554,152 583,219Assistance — Bureau of Language Arts 142,385 142,385 142,385 146,604 Total $6,280,433 $6,280,433 $4,604,339 $4,796,478 $3,883,289

* With respect to funding provided in 1983-84, these four programelements have been aggregated. The amount of $387,856 reflect in thiscolumn represents the total "unfunded recurring" costs for all fourprogram elements.

[fn**] No revision is made to reflect 5% salary increase for thesefour program elements.

As Revised by Exhibit 117 to Reflect the Consideration of As Revised by Exhibit Non-Recurring Costs and As Revised to Reflect As Reflected in the 117 to Reflect the the Assumed Continuation the Effect of 5% Salary Budget Sheets Set Correction of Errors of Incremental Board Increase Implemented in Program Forth in Exhibit 28 and Duplications Funding in 1984-85 1983-84

Bilingual EducationImmersion Programs $358,041 $358,041 $358,041 $372,144Evaluation Activities 697,270 697,270 697,270 537,894 721,599 556,662Recruitment 86,972 86,972 47,668 50,668Statewide Network 5,000 ----- ----- -----Advisory Council 3,000 3,000 3,000 3,000Public Involvement 390,781 390,781 390,781 406,412Translation Activities 154,544 154,544 103,781 103,707 109,611Parent Institute 36,500 36,500 36,500 36,500Instructional Materials 350,000 350,000 297,453 297,963Staff Development 204,365 204,365 168,699 192,346Gifted Programs 155,610 155,610 155,610 159,386Haitian Biligual Center 60,306 60,306 56,556 57,756Curriculum Development 1,935,132 1,935,132 1,935,132 2,031,889Training of Teachers 45,736 45,736 45,736 47,049 Total 4,483,257 4,478,257 4,296,153 4,136,703 4,486,323 4,321,386

As Revised by Exhibit 117 to Reflect the Consideration of As Revised by Exhibit Non-Recurring Costs and As Revised to Reflect As Reflected in the 117 to Reflected the the Assumed Continuation the Effect of 5% Salary Budget Sheets Set Correction of Errors of Incremental Board Increase Implemented Program Forth in Exhibit 28 and Duplications Funding in 1984-85 in 1983-84Evaluation

Native Language Assessment $36,684 $36,684 $36,684 $38,112Local School Development Program 678,596 678,596 641,075 656,634ESEA Title VII Bilingual Desegregation Support 23,467 23,467 23,467 23,767 Total 738,747 738,747 701,226 718,513

the desegregation of the Chicago public schools.(Testimony of Brady, Viso, Heing and Gonzales) Thoseprograms work together with ongoing programs firstimplemented in earlier school years to achieve the goalsof the Plan's Educational Components. (Brady testimony)

267. Prior to school year 1983-84, only certainelements of the Educational Components had beenimplemented at the vast majority of raciallyidentifiable schools and, as a result, achievement ofthe Plan's overall objectives has been limited. Evenwith the implementation of additional elements thisschool year because of the increased Board budget fordesegregation and the appropriation in the Yates Bill,many other elements have yet to be implemented. (Bradytestimony)

268. At this point, school year 1984-85 is the firstin which full implementation of the Plan could occur. Inthe months that followed the June 1983 hearing, Boardhad anticipated that the resources necessary toimplement fully the various components of the Plan wouldbe made available by the United States for the 1983-84school year, so as to make it the first year of fullimplementation. As a result, Board Ex. 28 was preparedunder the assumption that each of the various programelements would be initially implemented in 1983-84.However, only $26 million in new financial resourcesbecame available, allowing for only limitedimplementation of these program elements. (Brady andGlasper testimony)

269. Because of the passage of time, fullimplementation became impossible in school year1983-84. Given both the schedule of these proceedings(including the possibility of an appeal by the UnitedStates) and the nature of the school year calendar,additional resources could not be received and properlydevoted to implementation of the programs before thebeginning of school year 1984-85. It is accordinglynecessary to treat school year 1984-85 as the first yearof full implementation. (Brady testimony)

270. Educational Components of the Plan were intendedto supplement Chapter I programs in raciallyidentifiable schools where such programs are in effect.If Chapter I funds were used for desegregationprograms, the aggregate effects of low income status andracial segregation would not be addressed, and lowincome minority students would receive less compensatoryprogramming than contemplated by Chapter I and the Plan.(Brady testimony; Fagan cross-examination testimony)

271. There are a substantial number of raciallyidentifiable schools not eligible for Chapter Iprograms, and even in those schools eligible for ChapterI programs a significant number of minority students arenot qualified to participate because their achievementlevels, while below grade level, are not low enough. Inshort, the latter group of minority children, and thosenow attending or who will attend racially identifiableschools ineligible for Chapter I programs, would beforeclosed from critical remedial programs designed toalleviate the educational impact of past segregationthat affects each of them, even if Chapter I funds wereused for funding for the Plan. (Fagan cross-examinationtestimony)

272. Diverting Chapter 1 funds to Desegregation Plancosts would divest low income, educationally deprivedstudents of the benefits of Chapter 1 ECIA programs inorder to provide minority students the benefit of thePlan's Educational Components. That would offset orneutralize the benefit of the desegregation remedy andwould diminish the aggregate impact of the compensatoryand desegregation programs provided by Chapter 1 and theConsent Decree. (Brady testimony; Fagancross-examination testimony)

Board's Financial Affairs and Condition, and the Financial Aspects of School Desegregation

1982-84 Incremental Desegregation Expenditures

301. As of September 1983 the Chicago public schoolsystem comprised 70 high schools, 442 elementary schoolsand 25branches, 25 child-parent centers and a small number ofschools of other types (such as special educationfacilities, apprentice and trade schools, adult schoolsand bilingual-bicultural schools). Enrollment for the1983-84 academic year is approximately 434,000students. As of June 1983 Board employed nearly 40,000persons, of whom approximately 27,400 were represented bythe Chicago Teachers Union and approximately 9,500 weremembers of other unions and employee groups thatnegotiate with Board. (Stip. 201)

302. Board's budget for school year 1983-84 providesfor appropriations of approximately $1.455 billion foroperating expenditures. (Stip. 202)

303. As part of the $1.455 billion budgeted foroperating expenditures in school year 1983-84, Boardbudgeted approximately $67.7 million for incrementaldesegregation expenditures. After receiving the $20million appropriated by the Yates Bill, Board increasedthat amount to approximately $87.7 million. (Stip. 203)

304. Incremental desegregation expenditures refers tothose desegregation expenditures which are budgeted andaccounted for by Board by specific three-digit codes.Those three-digit project codes identify appropriationsand expenditures by their source or purpose. (Stip.204)

305. In 1980-81, the year in which the Consent Decreewas entered, incremental desegregation expendituresconsisted of certain student assignment programsaccounted for under Project Code 512 (as described inFinding 306). As Board expanded implementation of thePlan in each subsequent school year, additional projectcodes were established to account for the variousprograms that constituted the components of suchexpansion. (Stip. 205)

306. Incremental desegregation expenditures arebudgeted and accounted for by reference to the followingthree-digit project codes:

(a) Project Code 512 appropriations and expenditures refer to components of the Plan consisting of those initial elements of the Options for Knowledge student assignment programs that were initiated before the Consent Decree and are sometimes referred to as the continued "Access to Excellence" programs. Generally those are magnet schools and programs and voluntary transfer programs.

(b) Project Code 163 appropriations and expenditures refer to components of the Plan initially established in school year 1981-82, primarily relating to implementation of the Plan's Educational Components at racially isolated schools (and in part in 1981-82 to certain student assignment programs established in that year).

(c) Project Code 946 appropriations and expenditures refer to components of the Plan that relate to implementation of the Educational Components at racially isolated schools, also initially established in school year 1981-82 and funded by a supplementary allocation of State Title I funds.6.

(d) Project Code 536 appropriations and expenditures refer to components of the Plan funded under Title VII of the Elementary and Secondary Education Act of 1965 ("ESEA") to implement certain elements of the bilingual education aspects of the Plan, beginning in school year 1981-82.

(e) Project Code 576 appropriations and expenditures refer to components of the Plan funded under ECIA Chapter 2 and relate to the salaries of central office and support staff engaged in inservice training, recruitment, evaluation and management of the Plan. Those federal funds were first received in school year 1981-82 as a grant under ESAA.

(f) Project Code 065 appropriations and expenditures refer to components of the Plan initially established in school year 1982-83 to implement new and expanded elements of the Options for Knowledge student assignment programs and related transportation costs.

(g) Project Code 496 appropriations and expenditures refer to components of the Plan funded by the $10 million increase in Board resources for desegregation implementation in school year 1983-84.

(h) Project Code 400 appropriations and expenditures refer to components of the Plan funded by the $20 million appropriated by the Yates Bill and relating to expansion of the implementation of Educational Components at racially isolated schools. (Stip. 206)

307. Set forth on the following pages are incremental desegregationappropriations and expenditures, identified by project codes, for schoolyears 1980-81 through 1982-83 and incremental desegregation expendituresof $87.7 million, also identified by project codes, Board has budgetedfor school year 1983-84. (Stip. 207; Glasper testimony; Board Ex. 41)

1980-81 1981-82 1982-83 1983-84 Budget Expenditure Budget Expenditures Budget Expenditures Budget

512

Salaries/Benefits 2,235,246 2,356,958 3,764,333 3,601,101 3,539,343 3,752,259 4,035,843Supplies 13,461 11,209 19,001 11,470 12,002 8,286 16,002Rentals 170,595 114,300 87,492 87,492 78,039 78,030 72,000Repairs 48,641 33,338 60,411 59,071 71,363 71,078 126,576Trans. of Students 7,341,895 6,963,492 9,177,200 9,225,468 5,265,320 6,551,234 5,395,000Carfare 163,800 304,804 506,304 503,693 1,368,184 803,698 975,000Other 17,387 10,698 200,130 1,313 25,887 2,651,671 1,584

TOTAL: 9,991,025 9,794,799 13,814,871 13,489,608 10,360,138 13,916,256 10,622,005

163

Salaries/Benefits -0- 34,810 9,205,834 6,872,280 9,636,899 10,310,833 10,846,644Supplies -0- -0- 600,000 555,463 10,000 9,086 10,500Prof. Services -0- -0- 200,000 212,945 178,000 82,694 403,000Printing -0- -0- 25,000 26,213 44,200 31,543 54,200Auto Reimb. -0- -0- 18,200 10,681 10,578 10,570 10,146Trans. of Students -0- -0- 25,000 22,399 -0- -0- -0-Miscellaneous -0- -0- 850,328 461,605 -0- -0- 644,117Other -0- -0- 5,097 2,318 10,340 9,903 31,393

TOTAL: -0- 34,810 10,929,459 8,163,904 9,890,017 10,454,629 12,000,000

946-947

Salaries/Benefits -0- -0- 12,774,889 10,614,838 9,256,002 11,674,698 8,984,764Textbooks -0- -0- 1,943,460 1,813,482 2,797,806 1,949,908 1,168,137Supplies -0- -0- 524,647 1,816,377 -0- 523,624 -0-Miscellaneous -0- -0- 2,184,030 257,276 4,373,701 -0- 5,177,156Equipment -0- -0- -0- -0- -0- 579,139 -0-Other -0- -0- -0- -0- -0- 42,054 78

TOTAL: -0- -0- 17,427,026 14,501,973 16,427,509 14,769,423 15,330,135

536/Title VII

Salaries/Benefits -0- -0- 488,143 477,562 280,503 206,941 487,329Prof. Svcs. -0- -0- 35,395 15,472 47,075 32,557 25,169Auto Reimb. -0- -0- 5,589 2,443 7,433 5,139 3,489Textbooks -0- -0- 26,080 11,400 34,687 23,982 7,976Printing -0- -0- 72,653 31,758 96,628 66,807 262Supplies -0- -0- 39,121 17,100 52,030 35,973 3,050Other -0- -0- 7,451 3,259 9,911 6,851 4,718

TOTAL: -0- -0- 674,432 558,994 528,267 378,250 531,993

576/Chap. II Grant

Salaries/Benefits -0- -0- 1,298,172 1,475,802 1,286,714 1,124,569 1,425,791Prof. Svcs. -0- -0- 211,090 146,417 215,788 131,020 52,603Equipment -0- -0- 66,930 46,425 68,420 41,543 6,000Travel -0- -0- 36,040 24,998 36,842 22,370 135,000Printing -0- -0- 5,149 3,571 5,263 3,196 17,000Textbooks -0- -0- 82,376 57,138 84,210 51,130 270Other -0- -0- 113,268 78,565 115,788 70,304 83,148

TOTAL: -0- -0- 1,813,025 1,832,916 1,813,025 1,444,132 1,719,812

065-067

Salaries/Benefits -0- -0- -0- -0- 10,588,555 5,063,462 6,997,005Textbooks -0- -0- -0- -0- 210,400 350,037 1,492,445Trans. of Students -0- -0- -0- -0- 5,805,000 5,104,707 8,880,000Supplies -0- -0- -0- -0- 350,400 372,293 95,000Equipment -0- -0- -0- -0- 869,845 1,358,831 97,180Other -0- -0- -0- -0- 61,800 43,230 7,696

TOTAL: -0- -0- -0- -0- 17,886,000 12,292,560 17,569,326

496/Deseg. Expan.-Board Funds

Salaries -0- -0- -0- -0- -0- -0- 2,000,000Trans. of Students -0- -0- -0- -0- -0- -0- 2,000,000Expan. of Program Elements of Educational Components -0- -0- -0- -0- -0- -0- 6,000,000

TOTAL: -0- -0- -0- -0- -0- -0- 10,000,000

400/Deseg. Expan.-Yates Bill

Salaries -0- -0- -0- -0- -0- -0- 14,060,346Textbooks -0- -0- -0- -0- -0- -0- 1,444,060Supplies -0- -0- -0- -0- -0- -0- 1,220,521Prof. Svcs. -0- -0- -0- -0- -0- -0- 733,928Repairs -0- -0- -0- -0- -0- -0- 1,374,797Trans. of Students -0- -0- -0- -0- -0- -0- 365,220Equipment -0- -0- -0- -0- -0- -0- 725,095Other -0- -0- -0- -0- -0- -0- 76,033

TOTAL: -0- -0- -0- -0- -0- -0- 20,000,000

GRAND TOTALS: 9,991,025 9,829,609 44,658,813 38,547,395 56,904,956 53,255250 87,773,271

$2.3 million was derived from federal resources: approximately $.5million in funds under Title VII of ESEA to implement certain aspects ofthe Plan's bilingual education components, and approximately $1.8 millionin funds received by Board under Chapter 2 of ECIA. This latter $1.8million was equal to the amount of ESAA funds Board had received beforethe repeal of ESAA and the enactment of ECIA and thus constituted thatportion of the ECIA Chapter 2 block grant Board determined to allocate toimplementation of the Plan. All the remaining approximately $54.5 millionwas derived from Board resources. (Glasper testimony)

309. Resources for the $87.7 million in incremental desegregationexpenditures budgeted for school year 1983-84 are being provided asfollows: approximately $65.4 million from local resources andapproximately $22.3 million from federal resources. (Stip. 208)

310. of the $22.3 million in federal resources provided to fund Boarddesegregation expenditures, $20 million derives from the Yates Bill, $1.8million derives from ECIA Chapter 2 funds and approximately $.5 millionderives from ESEA Title VII. (Stip. 209)

311. With respect to incremental desegregation expenditures, Boardresources budgeted for desegregation implementation increased by $10million (or approximately 18%) from the level budgeted for the 1982-83school year. Desegregation implementation was the most significant areaof programmatic expansion undertaken by Board for school year 1983-84.(Stip. 211; Glasper testimony; Bacchus testimony)

312. All the increase in federal resources received by Board in schoolyear 1983-84 for desegregation implementation is attributable solely tothe $20 million appropriated by the Yates Bill. (Stip. 212) 1983-84Ancillary Desegregation Expenditures

313. Incremental desegregation expenditures do not includeexpenditures, referred to as ancillary desegregation expenditures, thatare made by Board to implement the desegregation plan but are notidentified by specific project codes and not included in the $87.7million amount set forth in Finding 307. Included within ancillarydesegregation expenditures are the costs of all "quota" or "formula"teachers at magnet and magnet-type schools. For school year 1983-84 thecost of such teachers is approximately $20 million. Also included inancillary desegregation expenditures are the costs of providing the basicsystem wide (or "formula") level of supplies and instructional equipmentat magnet schools, scholastic academies and metropolitan high schools.(Glasper testimony)

314. Also included in ancillary desegregation expenditures are thecosts related to student transportation for the Disney Magnet School.This cost is approximately $1.6 million for school year 1983-84.

315. Also included in ancillary desegregation expenditures are variouscentral office and field administrative expenditures relating to theimplementation of the Plan. (Brady testimony; Glasper testimony)

316. Ancillary desegregation expenditures are expected to continue atapproximately the 1983-84 level in future school years. (Brady testimony;Glasper testimony)

317. Board does not contend that (a) these ancillary costs should beincluded in the calculation of the amount required for fullimplementation of the Plan or (b) the United States should be responsiblefor funding all or a portion of such costs. However, these costs furtheremphasize that Board has devoted a substantial amount of its totalresources to the implementation of the Plan.

1982-84 School Budget-Board Resources and Expenditures

318. Evidence as to Board's present and projected financial conditionwas presented through the testimony of Board's chief financial andbusiness officers (J. Maxey Bacchus, Board's Business Manager, and RufusGlasper, its Director of Budgeting and Financial Planning) as well asthrough various Board budget documents.

319. Board Ex. 43 is the Board's annual school budget for 1983-84,which contains summary tables of Board revenue and expenditures for the1983-84 school year budget. (Stip. 216)

320. Board's four primary sources of operating revenue are localproperty taxes (34.6%), state school aid (45.6%), federal educationalassistance (13.8%), personal property replacement taxes (3.8%) andmiscellaneous (2.2%). (Stip. 217)

321. Rates at which Board can levy taxes for its four general operatingfunds (education, building, textbook and playground) are prescribed bythe Illinois School Code (Ill.Rev.Stat. ch. 122, ¶¶ 34-1 et seq.) anddetermined by the Illinois General Assembly and not Board. Board ispresently levying taxes for those funds at the maximum rates authorized bythe General Assembly. (Stip. 218)

322. State school aid received by Board is determined by variousformulae prescribed by the School Code, as determined by the IllinoisGeneral Assembly and not Board. (Stip. 219)

323. Federal educational assistance received by Board is determined by(a) the amounts appropriated by Congress for various educational programsand (b) the manner in which the Department of Education and, in certaininstances, the Illinois State Board of Education determine to allocatethese resources. Board does not have control over these determinations;its role is limited to making applications and seeking to meet applicableeligibility and competition requirements. (Stip. 220)

324: Personal property replacement tax revenues are generated throughan income tax on corporations, an income tax on partnerships and a tax onthe invested capital on certain public utilities. Those tax revenues arecollected by the State of Illinois and distributed to local taxingdistricts, including Board. (Stip. 221)

325. Personal property replacement tax revenue collections are afunction of the rates in effect for such taxes, as prescribed by theIllinois General Assembly. Personal property replacement tax revenuesdistributed to Board are determined pursuant to a formula prescribed bythe General Assembly. Board does not have control over those decisions.(Stip. 222)

326. In sum, as this Court said in Opinion I, Board "is not the masterof its own fate". 554 F. Supp. 912, 926. Except for its own tax levy,which has no available increment, Board's revenues are wholly determinedby other governmental bodies and agencies, particularly the State ofIllinois and the United States. To the extent Board has limiteddiscretion over the amount of its revenues, such as the discretion tolevy taxes up to a maximum amount permitted by state statute, Board hasexercised such discretion to maximize its revenues. (Stip. 216-22;Bacchus testimony; Board Ex. 155))

327. While Board has a limited ability to generate new resources, theUnited States, by sharp contrast, has the full capability of generatingnew resources or increasing existing resources. However the United Stateshas not done so (and has in fact taken extensive steps to limit theavailability of funds for desegregation implementation). (Board Ex. 57;Findings 401-67)

328. of $1.455 billion in total Board operating expenditures budgetedfor school year 1983-84, approximately $1.162 billion (or approximately75%) is budgeted for employee compensation, including pension and fringebenefits. All elements of employee compensation are subject tonegotiation between Board and the various employee groups with which itengages in collective bargaining, including the Chicago Teachers Union.Employee compensation levels cannot be determined unilaterally by Board.(Stip. 223)

329. of the same $1.455 billion, approximately $91 million is budgetedfor food and utilities, approximately $33 million for repair andrehabilitation of school buildings and approximately $23 million forpayment of tuition for handicapped children who cannot be served in thepublic schools. That tuition rate is set by the State Board of Education,not Board. In the aggregatethe various expenditure components described in Findings 328-29 representapproximately $1.309 billion, or 90% of Board's budgeted operatingexpenditures for school year 1983-84. (Stip. 224)

1979-80 Financial Crisis

330. Board suffered an acute financial crisis in November 1979. Itscauses were the subject of various studies and commentaries, inparticular a report of the Illinois General Assembly Joint House andSenate Chicago Board of Education Investigation Committee. Its mostimmediate cause, however, was Board's inability to engage in short-termborrowing. As a result it suffered a severe cash shortfall. It was forcedto decide which of its obligations would be paid in timely fashion andwhich would of necessity be delayed in payment. By the latter part ofDecember 1979 Board was virtually without any available cash. GovernorThompson convened a meeting in Springfield in early January 1980 toaddress Board's financial crisis. Participants at that meeting agreed toa multi-faceted plan, including (a) adoption of the School FinanceAuthority Act (the "Act"), leading to the creation of the Chicago SchoolFinance Authority ("Authority"); (b) a three phased financing plan toprovide funds for Board (which plan was fully implemented during 1980);and (c) imposition of certain financial, legal and structural changesupon Board, including (i) the reduction in Board's educational fund taxrate from 2.11% to 1.61% of equalized assessed valuation, (ii) theappointment of a chief financial officer who has responsibility forpreparing and supervising Board's budget and financial plan and whoreports directly to Board and (iii) the expiration on April 30, 1980 ofthe terms of office of all Board members who held office on January 16,1980. (Stip. 225)

Relationship to School Finance Authority

331. Authority is a five-member body whose members are appointed by theMayor and Governor and are not subject to approval by the GeneralAssembly. It was created to serve two basic functions: (a) to exercisefinancial oversight and control over Board; and (b) to issue bonds andnotes to provide financing for Board. It is to remain in existence untilone year after the date that all bonds and notes it has issued are paidin full. It is currently anticipated Authority's obligations will not befully paid until 2009, so that it will remain in existence until 2010.However, as discussed in the last paragraph of this Finding, it is likelymany of its powers will be suspended before that time.

Financial Control and Oversight Powers. The most significant powers andresponsibilities (and the corresponding duties imposed upon Board) are inthe following areas:

(A) Budgets: Authority must approve or reject Board's annual budget foreach fiscal year. Each budget must contain such information and detail asAuthority may prescribe and must be based upon the revenue estimatesAuthority approves or prepares. Board must submit its budget to Authorityat least 45 days before the beginning of the fiscal year to which thebudget relates, and Authority is required to approve or reject Board'sbudget within 30 days of its receipt. Standards are established by theAct for Authority's review of the budget. It states Authority shallapprove any budget it believes to be complete, reasonably capable of beingachieved and consistent with the Financial Plan then in effect. Under theAct Authority does not have line-item veto powers over the budget— it must either accept or reject the budget in its entirety.Following the adoption of a budget for a fiscal year, Board must notifyAuthority of any material change in its revenue or expenditure estimatesfor that year. Based on such changes Board may submit, or Authority mayrequire Board to submit, a supplemental budget, or Authority may requireBoard to take other actions.

(B) Balanced Budget: Board is required to have a balanced budget inaccordance with the accounting system and procedures Authorityprescribes. Authority has promulgated regulations to govern Board'spreparation of its annual budget and provide a framework for thedetermination of what constitutes a "balanced budget."

(C) Financial Plan: Authority has the power to approve or rejectBoard's Financial Plans. Each Financial Plan must cover a period of atleast three fiscal years. It must contain a description of revenues andexpenditures, provision for debt service, cash resources and uses, andcapital improvements for each fiscal year covered. Authority haspromulgated regulations setting forth the type of information and detailthat must be contained in each Financial Plan. In connection withapproving each Financial Plan, Authority must approve, reject or amendBoard's revenue estimates. It may also review Board's operations andobtain budgetary data and financial statements. In general, Authority hasa right of access to all information in Board's possession that it deemsrelevant. Authority also may issue recommendations or directives to Boardto assure compliance with Financial Plans and may require Board to submitmodified Financial Plans based upon revised revenue or expenditureestimates or for any other good reason. In the absence of a budget andFinancial Plan that Authority has approved, the Act prohibits Board frommaking any expenditures other than for payment of its debt serviceobligations. Authority's regulations, as amended, require Board to submiteach Financial Plan to Authority on or before the May 1 before the firstfiscal year to which the plan relates. Thus the Financial Plan for fiscalyears 1984-85 through 1986-87 was due May 1, 1984.

(D) Contracts: Authority has the power to adopt and amend regulationsidentifying categories and types of contracts and other obligations ofBoard that shall be subject to Authority's approval and the proceduresfor submitting contracts for approval. Authority shall approve thosecontracts if, in its judgment, the information required to be submittedis complete and the contract is consistent with Board's budget andFinancial Plan then in effect. Authority has adopted regulations settingforth the types of contracts for which its approval will be required.They include collective bargaining agreements, contracts involving anamount in excess of $10 million, contracts in excess of $1 millioninvolving the disposition of real property and contracts creating anobligation to repay borrowed money.

(E) Chief Financial Officer: Authority has the power to approve theappointment of and to remove Board's Chief Financial Officer.

(F) Accounting and Auditing: Authority may direct Board to reorganizeits financial accounts, management and budgetary systems in whatevermanner Authority deems appropriate to achieve greater financialresponsibility and efficiency. Authority also has the power annually toapprove Board's appointment of certified public accountants to auditBoard's financial statements.

(G) Cash Management: Authority is authorized to require Board toestablish and maintain separate cash accounts and separate bank accountsin accordance with such rules, standards and procedures as Authority mayprescribe. Authority also may assume exclusive administration of Board'scash accounts and bank accounts and withdraw funds from such accounts forBoard's lawful expenditures.

Duration of Powers: Authority will retain the power to approve orreject Board's budget and the power to examine its business records andaudit its accounts for as long as Authority remains in existence.However, other powers of Authority set forth above (including withoutlimitation the power to review and approve Financial Plans and contractsand to require Board to appoint a Chief Financial Officer) becomesuspended upon certification to the Mayor and Governor that Board hascompleted three successive fiscal years with a budget balanced inaccordance with standards prescribed by Authority. But the Act alsoprovides the suspended powers will be restored upon Authority'scertification that Board has failed to adopt a balanced budget or failedto achieve a balancedbudget for two successive fiscal years. It is generally thought Board'sfiscal year ended August 31, 1982 was the first fiscal year to qualifyunder this statutory definition, so that Board has now achieved twosuccessive years of a "balanced budget." (Stip. 226; Board Ex. 115)

332. Authority has approved Board's budget for school year 1983-84 ascomplete, reasonably capable of being achieved and balanced in accordancewith accounting systems and procedures prescribed by Authority. (Stip.227)

Projected Deficits for Future Years

333. Board has adopted, and in December 1983, Authority approvedBoard's Financial Plan for fiscal years 1984-86. That Financial Plan isBoard Ex. 51. (Stip. 228) It projects the following deficits: for fiscalyear 1984-85 — $146.7 million; for fiscal year 1985-86 —$71.9 million. (Stip. 229)

334. Board's projected deficit for fiscal year 1984-85 is based onprojected expenditures of approximately $1.490 billion and projectedrevenues of approximately $1.343 billion. Board's projected deficit forfiscal year 1985-86 is based on projected expenditures of approximately$1.532 billion and projected revenues of approximately $1.460 billion.(Stip. 230) Those projections are based on a series of assumptions setforth at pages 3-1 through 3-8 of the 1984-86 Financial Plan. (Stip.231)

335. Among the assumptions upon which the 1984-86 Financial Plan isbased are (a) no increases in employee salaries over the level in effectfor school year 1983-84 (except for longevity or "step" increasesrelating to increased years of service); (b) certain percentage increasesin federal funding; (c) no expansion of educational programs funded bygeneral Board resources (as opposed to state-mandated or federally-fundedprograms); (d) continued funding for incremental desegregationexpenditures of approximately $67.7 million (that represents acontinuation of desegregation programs budgeted from Board funds forschool year 1983-84, but without the $20 million one-time appropriationfrom the Yates Bill); and (e) increases in expenditures to address theimpact of inflation in certain areas, such as utilities. (Stip. 232;Bacchus testimony; Glasper testimony)

336. As regards federal funds, Board's revenue estimates for 1984-85(as set forth in its Financial Plan) reflect a net decrease ofapproximately $13 million resulting from (a) a decrease of $20 million(reflecting the one-time nature of the funds appropriated by the YatesBill) and (b) a net increase of approximately $7 million in various otherfederal funds received by Board, including ECIA, Chapter I funds.

337. In June 1983 the Illinois General Assembly restored to 2.11% themaximum rate at which Board could levy taxes for its educational fund. Italso adopted legislation that provided educational fund taxes could beextended at the 2.11% rate beginning in calendar year 1983. Absent thisadditional amendment, the extension rate for calendar 1983 would haveremained at 1.61%, and Board would not have received an increase in cashreceipts resulting from the tax rate increase until its 1984-85 fiscalyear. In essence the "extension rate" increase allowed Board to takeimmediate advantage of the educational fund tax rate increase describedabove by collecting taxes that had been levied in the prior calendar yearbut could not otherwise have been collected. (Stip. 233)

338. Board's projected deficits for fiscal years 1984-85 and 1985-86included in the 1984-86 Financial Plan derive in part from an Authoritydirective that Board project educational fund taxes will be collected incalendar year 1984 at a rate lower than 2.11% of equalized assessedvaluation. Board believes Authority's position is incorrect because the2.11% rate should and will be applicable to calendar year 1984educational fund tax collections. In summary the nature and significanceof the disagreement between Board and Authority on this issue is asfollows:

(a) Due to the complex nature of Board's tax levy and collection process, there is a lag between the time Board's taxes are levied and the time they are collected. As a result of this lag, certain of Board's taxes cannot be collected until two years after their levy. Amounts of those "levied but unbilled" taxes vary from fund to fund.7.

(b) In the educational fund, the amount of levied but unbilled taxes was sufficient to permit a "speed-up" of tax collections, authorized by the "extension rate" amendment, of approximately $100 million over and above the amount originally projected for fiscal year 1983-84.8. As a result of the "speed-up," educational fund taxes are essentially on a cash current basis. In other words, substantially all taxes levied for that fund in a calendar year (for the fiscal year that begins that year) will be collected in the following calendar year.

(c) During its consideration of Board's current Financial Plan, Authority took the position the "extension rate" amendment did not authorize the extension of educational fund taxes at the 2.11% in calendar year 1984, but rather mandated a lower maximum extension rate. Under the view expressed by Authority, Board's cash receipts for fiscal year 1984-85 would be approximately $65 million less than what would be generated if the 2.11% extension rate were applicable. Board was required to take Authority's view into account when projecting its receipts for fiscal year 1984-85. As a result, Board's current Financial Plan projects a deficit of approximately $146 million for fiscal year 1984-85 as opposed to the approximately $81 million initially projected by Board.

(d) Board and its counsel are of the view 2.11% is clearly the applicable extension rate for calendar year 1984 and subsequent years. However Board may choose to seek the enactment of confirmatory legislation to address any misunderstanding or confusion that may be thought to exist on this subject. Such legislation would be required before the mailing of the second-half calendar year 1984 tax bill. (Stip. 284)

339. Board and Authority agree that if Board's position as to theapplicable educational fund tax collection rate is correct, Board'sFinancial Plan would still project operating deficits of approximately$81 million for school year 1984-85 and approximately $91 million forschool year 1985-86. (Stip. 235)

340. Board does not have sufficient revenues from present sources tocure the projected deficits for school years 1984-85 and 1985-86 (whichare based on the assumptions set forth in Finding 335). In fact, it maybe virtually impossible for Board to avoid annual financial crises orattain long-term financial stability in the near future. (Bacchustestimony)

341. Because Board's budget and financial affairs are subject toAuthority's review and oversight, and because of the intensive andrigorous scrutiny and financial oversight provided by Authority, Board'sprojections as to operating deficits in future fiscal years are entitledto particular weight and reliability. (Stips. 226-27; Bacchus testimony;Glasper testimony; Board Ex. 115)

Board Efforts to Find Resources

342. In June 1983 Board projected a budget deficit for fiscal year1983-84 of approximately $200 million. That projected deficit waseliminated, in part, as a result of Board's receipt of additionalrevenues. (Stip. 236)

343. Most significant of the revenue increases that contributed to theeliminationof Board's projected deficit for school year 1983-84 were (a) an increaseof approximately $100 million in educational fund taxes and (b) an"increase" of approximately $65 million in State distributive fund aid.In fact, almost all of this so-called "increase" represented no more thana restoration of State aid to the level in effect for the prior schoolyear. Also contributing to the elimination of this projected deficit weresmall increases in miscellaneous revenues and various expenditurereductions effectuated by Board. (Stip. 237; Board Ex. 115)

344. Those increases in educational fund taxes and state distributivefund aid resulted from actions taken by the Illinois General Assembly to(a) increase the maximum tax rate for Board's educational fund and (b)increase the State income tax. (Stip. 238)

345. Board lobbied vigorously in support of both of the legislativemeasures described in Finding 344. Its lobbying activities includedmeetings among the General Superintendent, Board members, and members ofthe General Assembly, and the Governor and his staff. Board alsoorganized rallies and public displays of support for those legislativemeasures and drafted appropriate amendments to the School Code, whichenabled Board to take immediate advantage of the increase in educationalfund tax rates. (Bacchus testimony)

346. Board's commitment to increase expenditures for incrementaldesegregation programs by $10 million is an assumption upon which theprojected deficit of $200 million for fiscal year 1983-84 was based.Therefore, Board's efforts to increase its revenues for fiscal year1983-84 were taken in part to fulfill its commitment to increase itsincremental desegregation expenditures. (Bacchus testimony)

347. Since the entry of the Consent Decree, Board has repeatedly soughtto obtain funding for desegregation from the State of Illinois. As a partof its efforts, Board has drafted and proposed legislation that wouldprovide desegregation funding for Chicago. Such legislation is alsoincluded as a part of Board's legislative program for 1984. To dateBoard's efforts in this regard have been unsuccessful. (Bacchustestimony)

348. Board's budget for school year 1983-84, as approved by Authority,was balanced only after approximately $23.6 million in expenditurereductions from Board's original proposal (including at leastapproximately $12.2 million in reductions from the expenditure level forthe 1982-83 school year). Proposed desegregation expenditures were notreduced. (Bacchus testimony; Glasper testimony)

349. In the summer and fall of 1983, Board encountered a prolongeddispute with the collective bargaining representatives of its employees,including the Chicago Teachers Union. This included a three week strikeof Board employees, whose principal demand was for increasedcompensation. Board employee groups specifically and consistentlydemanded that Board delete its proposed $10 million increase indesegregation expenditures and devote those funds to increased employeecompensation. Board successfully resisted that demand and preserved theproposed increase in desegregation expenditures for its 1983-84 schoolyear budget, thereby complying with Board's previously made commitmentand determination as to its level of desegregation expenditures in1983-84. (Bacchus testimony)

Federal and State Funds Received by Board

350. Board submitted applications for an ESAA grant in fiscal 1981 andfor Title IV grants in fiscal years 1980 and 1981 as part of thoseprograms regular grant review process. Board's 1981 ESAA application wasfor approximately $23.8 million, and the amount of the grant was $1.8million. Board's awards of $422,800 in fiscal 1980 and $298,639 in fiscalyear 1981 were the largest awards to local educational agencies for racedesegregation assistance under Title IV in those years. (Stip. 335)

351. In fiscal year 1983 Board submitted two applications for $9million and$13 million for funds from the Secretary's Discretionary Fund. Thoseapplications were ranked by the Department of Education 13th and 28th,respectively, out of 34 applications received in the priority area forwhich they were filed. Only 10 programs were funded. (Stip. 337)

352. ECIA Chapter 2 consolidates, on a block grant basis, severalprograms for which Board previously received funds on a categoricalbasis. Among the programs consolidated are: Basic Skills (ESEA TitleII); Instructional Materials and School Library Resources (ESEA TitleIV-B); Improvement in Local Educational Practice (ESEA Title IV-C);Emergency School Aid (ESAA Title VI); and Teacher Corps (Higher EducationAct. Title V-A). As a result, Board receives approximately $5.5 to $6million annually in block grant funds (allocated and distributed by theState Board of Education) appropriated to finance a variety ofeducational programs, some of which are continuations of previouslyfunded categorical programs and some of which are newly implemented andestablished programs. Board is allocating approximately $1.8 million-anamount equal to what it received under ESAA prior to its repeal- of itsChapter 2 block grant to desegregation purposes in fiscal year 1983-84.(Stip. 210; Bacchus testimony; Glasper testimony)

353. Board received federal assistance before the Consent Decree, andcontinues to receive such assistance today, under the various federalprograms referred to by the United States. Together those funds, includingECIA Chapter I, encompass the categorical federal educational assistancereceived by all school districts in the United States, including Board,for essential basic educational programs. Those funds have been andcontinue to be received by Board on the basis of criteria that areunrelated to and do not take into account either the Consent Decree orthe costs of implementing the Plan. (Glasper testimony; Bacchustestimony; Fagan testimony)

354. Studies and congressional documents reflect the followingconclusions as to the impact of the ECIA legislation on urbandesegregation:9.

(a) ECIA Chapter 2 has caused a substantial shift of federal education funding away from urban school districts with high percentages of minority students. In particular, urban school districts implementing voluntary or court ordered desegregation plans have experienced severe losses in federal aid due to the consolidation of ESAA in Chapter 2 block grants. Those school districts have frequently been unable to find other sources to compensate for these losses and, as a result, desegregation efforts have been significantly hindered. H.R. Rep. No. 98-581, 98th Cong. 1st Sess. (1983); Rand Corporation, "The New Federalism in Education" at 52-53, 81-82 (1983) (report prepared for the Department of Education). See also, American Association of School Administrators, "The Impact of Chapter 2 of the Education Consolidation and Improvement Act on Local Agencies," at 18-19 (1983); The Council of Great City Schools, "Trends in Federal Funding to Urban Schools" (1983).

(b) Effects of ECIA Chapter 2 on urban school districts with large percentages of minority students are well known to the Secretary of Education. Among the many instances when this matter was called to the Secretary's attention are:

(i) the November 30, 1983 Report by the House Committee on Government Operations, recommending that ESAA be reauthorized as a categorical program. H.R.Rep. No. 98-581, 98th Cong. 1st Sess. (1983);

(ii) the September 29, 1983 hearings before a House subcommittee of the Committee on Government Operations addressing the topic, "Federal Education Assistance: Are Block Grants Meeting the Need?", noted passim in H.R.Rep. No. 98-581;

(iii) the July 1983 "Statement on the fiscal year 1984 Education Budget" by the United States Commission on Civil Rights, concluding that "the cutting of . . . funds and the placement of ESAA in a block grant in fiscal year 1982 has limited the nation's efforts to provide equality of educational opportunity for all students." (Statement at 45, reprinted in H.R.Rep. No. 98-581, at 16);

(iv) the June 28, 1983 letter from Senators Eagleton and Stafford, requesting the Department's position on S.1256, a bill "to authorize special assistance for desegregation activities," and noting several reports discussing the damaging effects of Chapter 2 on school districts undergoing desegregation;

(v) the February 1983 report prepared by the Rand Corporation for the Department of Education entitled "The New Federalism in Education;"

(vi) the August 20, 1982 letter from John Hope, Staff Director of the Civil Rights Commission, to the Secretary, expressing concern that the Department's approval of States allocation formulas without adequate standards would "drain funds from inner-city schools where minority children are concentrated, and drastically reduce support for voluntary desegregation effort." (Reprinted in H.R.Rep. No. 98-581 at 21);

(vii) the July 2, 1982 letter from the Council of Great City Schools and the Lawyers Committee from Civil Rights Under Law to the Secretary, expressing concern that the Department's decisions with regard to state formulas were contrary to Congressional intent and were resulting in inadequate funding to urban school districts, particularly those undergoing desegregation. Reprinted with the statement of Samuel Husk at the House Subcommittee on Civil and Constitutional Rights Hearing on Civil Rights Implication of the Education Block Grant Program, 97th Cong., 1st Sess. (1982).

(c) ECIA requires that the Secretary approve the criteria used by States to develop formulas to distribute funds to LEA's only when these criteria "are reasonably calculated to produce an equitable distribution of funds" with reference to the adjustment factors for high-cost children. 20 U.S.C. § 3815. Despite his knowledge of the effects of Chapter 2 of the ECIA on urban school districts undergoing desegregation, the Secretary has not attempted to assure the equitability of distribution formulas. He has refused to provide SEA's with standards for developing their formulas by defining the term "equitable" by regulation and has intervened to change formulas only to prevent allocation plans weighted for desegregation funding. See H.R.Rep. No. 98-581, at 20.

355. Despite knowledge of the harmful impact of Chapter 2 of the ECIAon urban school districts undergoing desegregation (and in particularChicago), the Secretary has opposed efforts to re-enact ESAA or otherwiseauthorize special assistance for desegregation activities. (SecretaryBell's letter to Sen. Hatch, October 18, 1983, in Board Ex. 118)

356. Amounts received by Board in school years 1978-79 through 1983-84from the Department of Education under Chapter 1 of the ECIA and theantecedent program to Chapter 1 (Title I of the Elementary and SecondaryEducation Act of 1965) are as follows:

School Year Amount (millions)

1978-79 $56.0961979-80 67.3321980-81 63.6501981-82 59.9121982-831983-84 73.247

(Stip. 338)

357. It is not the United States contention that it was the "reasonableexpectation of the parties at the time of signing the Consent Decree"that Chapter 1 (formerly ESEA Title I) funds to which Board was alreadyentitled would constitute all or part of the United States contributionto funding the Plan. There was no considerationor discussion of this subject at that time. (United States Answers toBoard's Sixth Interrogatories, No. 1.) No basis exists for finding suchan expectation.

358. Chapter 1 is intended to serve the lowest-achieving childrenwithin a particular attendance area. Its statutory scheme is raceneutral. It is a scheme that targets funds to schools with the highestconcentration of low income children who are Chapter 1 eligible. Within aschool eligible for Chapter 1 funding, however, the selection of childrento be served by Chapter 1 programs is determined by achievement level,regardless of an individual child's poverty. (Fagan testimony)

359. In educators terms an educationally deprived child is a childwhose achievement is below the average achievement level for children ofthe same age. For children like those attending the Chicago publicschools, whose achievement is measured by the Iowa Testing Battery,educational deprivation refers to achievement scores below the 50thpercentile. Black and Hispanic children are generally lower achieving thantheir white counterparts when they enter the educational system. Thatmeans a greater preponderance of Black and Hispanic children are belowthe 50th percentile when they enter the educational system, and thepreponderance does not change as they progress through the system. (Fagantestimony)

360. It is a goal of the Chapter 1 statutory scheme to move a lowachieving child toward grade level and sustain those gains. Removing achild from a Chapter 1 Program would threaten any existing achievementlevel gains. Removing a child from a Chapter 1 program for the summercould threaten any gains that occurred during the preceding school year.(Fagan testimony)

361. All of the approximately 40% of children in racially identifiableschools who are served by Chapter 1 programs were or are projected tofall further behind grade level achievement norms as they progressthrough the system. They start first grade significantly behind majorityand minority children of the same age who are attending the same or otherschools. Chapter 1 programs are intended to start those below-grade levelminority children closer to other children, and to keep them from fallingfurther behind as they move through the system. (Brady testimony andinference from Fagan testimony)

362. of the original 45 ESP schools 40 are served by Chapter 1programs. (Fagan testimony) of the 62 schools where the full ESP programwas implemented in the 1983-84 school year, 55 are served by Chapter 1programs. of the 100 schools receiving Level II intervention in schoolyear 1983-84, 42 are not served by Chapter 1 programs. (Based on U.S.Ex. 23 and Stip. 151 with accompanying tables)

363. Board's 107 Level I ESP schools have a total enrollment of80,099, of which 23,048 are served by Chapter 1 programs. Board's 100Level II ESP schools have a total enrollment of 67,029, of which 10,866are served by Chapter 1 programs. (Based on U.S. Exs. 23 and 37 andStip. 151 with accompanying tables)

364. Certain of Board's Educational Components are not eligible forChapter 1 funding because they are not designed to meet the specialeducational needs of educationally deprived children, do not servelow-income schools or are central or system-wide in character. (Fagantestimony)

365. Chapter 1 programs and Board's ESP program could work together toprovide an extra benefit to Chapter 1 eligible children in terms ofclosing the achievement gap between Black and Hispanic children and theaverage achievement level for all children of the same age. (Fagantestimony)

366. Test results demonstrate the Chapter 1 and State Title I programshave only marginally narrowed the initial achievement gap for segregatedminority children who begin first grade in racially identifiableschools, and have done no more than marginally reduce the rate by whichthey fall further behind grade level. (Brady testimony)

367. State Title I funds received by Board as part of its general Stateaid, including both the system wide and targeted portions of such funds,are intended to provide resources to Board for the higher costs ofproviding basic and compensatory education to low income, educationallydeprived children. Those funds were already being received by Board atthe time the Consent Decree was signed. Consent Decree § 2.2 wasintended to provide supplemental educational programs, rather than merelyto maintain programs then in existence. Simply to shift money from StateTitle I programs to pay for desegregation programs would eliminate anysupplemental character of the desegregation remedy. (Bacchus testimony)

368. Among other goals, the Educational Components were designed (a) togive minority children an opportunity for an equal start after decades ofsegregation and (b) to assist those already in the system who are behindand falling further behind to catch up. That achievement gap is anobvious pernicious effect of segregation, which any constitutional planmust address with viable programs. Simply to shift money from Chapter 1and State Title I programs to pay for desegregation programs wouldeliminate any supplemental character of the desegregation remedy. (Basedon Bacchus, Brady testimony)

Board's Good Faith Efforts

369. As of June 30, 1983 Board had already expended approximately $120million in its efforts to implement fully the various elements andcomponents of the Plan, and had appropriated approximately $67 millionfor this purpose in school year 1983-84. Those actions were taken at atime when Board was suffering severe financial constraints and projectinga budget deficit for the 1983-84 school year of approximately $200million. Moreover, implementation of the Plan had been the mostsignificant area of program expansion in recent school years. In light ofthese facts, this Court found in Opinion II that from September 24, 1980to June 30, 1983 Board had made every good faith effort to find andprovide every available form of financial resources adequate to pay thecosts of full implementation of the Plan. (Findings 3-7, 567 F. Supp. at274).

370. During the same time period (as of June 30, 1983, when Board hadexpended $120 million) the United States provided only about $2.5 millionin direct desegregation assistance (almost all in fiscal 1981), despitethe fact it had substantial additional funds available that it could haveprovided to Board had it made every good faith effort. (Glasper andBacchus testimony)

371. Board's good faith compliance with the Consent Decree in itsallocation of resources among competing needs has been determined as afactual matter in Opinion II, Finding 3, 567 F. Supp. at 274. Thatdetermination was not appealed, and it is the law of the case. Comparabledecisions made by Board in its allocation of available resources sinceJune 30, 1983 and for the future also constitute every good faitheffort. (Glasper, Brady and Bacchus testimony)

372. In light of the fact the Educational Components of the Plan wereintended to provide a supplemental remedy for minority students attendingracially isolated schools, Board has sought, from both the United Statesand the State of Illinois, new resources for the Plan that aresupplemental to those already being provided. As an example, Board hassucceeded in obtaining a restoration of previously unavailable taxingauthority from the State of Illinois. To the extent Board is unable toobtain new resources, however, Board faces a Hobson's choice between (a)inability to implement the Plan and (b) allocating funds to implement thePlan by shifting existing resources or revenue increments from othereducational obligations and priorities. In exercising its narrow areas ofchoice, Board has made every good faith effort to provide funds, incompliance with the Consent Decree. (Bacchus testimony; GlasperTestimony)

373. Consent Decree § 15.1's good faith obligation does not requireBoard to reallocate unlimited amounts of its general revenuesaway from basic educational programs to the Plan. Board is in fullcompliance with the Consent Decree without doing so. Nor does the goodfaith obligation of the Consent Decree require Board to reallocate moreState Title I funds to pay desegregation expenses. Board is in fullcompliance with the Consent Decree without doing so.

374. Board's decision to allocate approximately $1.8 million of its1983-84 ECIA Chapter 2 block grant to incremental desegregationexpenditures constitutes "good faith efforts" under Section 15.1.(Bacchus testimony)

375. Board's decision to budget approximately $67.7 million of its1983-84 operating revenues (excluding the moneys appropriated by theYates Bill) for incremental desegregation expenditures constitutes "everygood faith effort" under Section 15.1. Under the present circumstances, adecision to budget such amount of operating revenues for incrementaldesegregation expenditures would also constitute "every good faitheffort" for the 1984-85 school year. (Bacchus testimony; Glaspertestimony)

376. In light of Findings 301-75, Board has continued since June 30,1983 to make every good faith effort to find and provide every availableform of financial resources adequate to pay the costs of fullimplementation of the Plan.

Addendum A to Findings 301-76 State Title I Overview

To understand the relationship between desegregation expenditures andState Title I school aid, an overview of State aid to education ingeneral and of State Title I funding in particular is necessary. Boardreceives Common School Fund State Aid (often called "general State aid"or "State distributive fund aid"), distributed by the State Board ofEducation through the Cook County Regional Superintendent of Schools.Amounts so distributed to Board (as well as to other school districts inIllinois) are determined by a mathematical formula set forth in Section18-8 of the School Code, Ill.Rev.Stat. ch. 122, ¶ 18-8. That formulacomputes the level of State aid to school districts on the basis of eachpupil counted in a district's "average daily attendance." Average dailyattendance is defined as (a) the sum of all student attendance daysreported over certain periods during each academic year divided by (b)the number of days of instruction held during such periods. In computingthe amount of such distribution, the State multiplies the average dailyattendance of all pupils in grades 9 through 12 by 1.25.

In addition, the formula provides a portion of the Common School FundState Aid distributed to Illinois school districts is to be based on thenumber of economically disadvantaged children enrolled in each district.That portion is identified as State Title I aid and is based on thenumber of "Title I eligible" students in the district, "Title I eligible"being defined pursuant to Chapter 1 of ECIA (the Education Consolidationand Improvement Act of 1981), formerly Title I of ESEA (the Elementaryand Secondary Education Act of 1965). In essence a "weighting" factor isassigned to each Title I eligible student counted in a school district'saverage daily attendance so that each Title I eligible student "counts"as more than one student for purposes of the average daily attendanceformula described above. Ill.Rev.Stat. ch. 122, ¶ 18-8.1(n)

State Title I aid (and other forms of financial assistance similar innature and purpose to State Title I aid) has been received by Board sinceapproximately 1968. Before the 1979-80 school year, however, Board was notrequired to direct or "target" State Title I funds in relation to theenrollment of State Title I eligible children. Rather those funds wereincluded as part of Board's general resource base and were expended withother resources (primarily local property taxes and Common School FundState Aid) to fund system-wide educational programs and services.

In the late 1970s School Code § 18-8.6(i)(1) (Ill.Rev.Stat. ch.122, ¶ 18-8.6(i)(1)) was amended to provide that a certain portion(the "targeted" portion) of State Title I aid received by Board was to beallocated to schools in proportion to the number of Title I eligiblepupils enrolled, while the remainder (the "non-targeted" portion) was tobe allocated to schools in proportion to their total student enrollment.Though these proportions are subject to some minor fluctuation from yearto year, the targeted portion of State Title I aid is approximately 55%of the total and the non-targeted portion approximately 45%.

That statutory requirement for targeting State Title I aid wasinitially implemented for the 1979-80 school year and was applicable toone-third of the State Title I aid received that year. Targeting wasapplicable to two-thirds of State Title I aid received in school year1980-81 and became fully applicable to all State Title I aid received inschool year 1981-82 (and every subsequent year).

To demonstrate compliance with the statutory targeting requirements,Board annually submitted (and continues to submit) to the State Board ofEducation a plan indicating the distribution of State Title I aid amongall schools in the district and the purposes for which such aid was to beused. In other words, for each school receiving targeted State Title Iaid, Board indicated the amount of such aid and the programs eligible toreceive funding from such aid. All those programs were required to be"State Title I eligible programs," as determined by regulationspromulgated by the State Board of Education.

In substantially all instances (except as described below for certaindesegregation programs initiated in school year 1981-82), the programsenumerated as "Title I eligible" were programs previously established byBoard and previously funded from its general resource base (whichincluded local resources and Common School Fund State Aid, includingState Title I aid). They were not, by and large, new programs establishedafter the implementation of the statutory targeting requirement. Statedanother way, for purposes of complying with the State Title I targetingrequirements, Board "attributed" certain of its ongoing educationalprograms, previously funded from Board's general resource base, as beingfunded from State Title I aid.10.

For school years 1979-80 and 1980-81 Board was able to comply with thestatutory targeting requirement without any reallocation of State Title Iaid among schools within the district. However, in school year 1981-82Board was required to "reallocate" approximately $17 million of StateTitle I aid to ensure that a sufficient amount was distributed to schoolsin proportion to the number of Title I eligible pupils enrolled (i.e., toensure that the statutory targeting requirement was complied with). Thatreallocation resulted in the identification of new programs at thoseschools that received the "supplementary allocation" of State Title Iaid.

Board Desegregation Expenditures

As Finding 306 reflects, incremental desegregation expenditures arebudgeted and accounted by use of three-digit project codes. Those havingrelevance to State Title I expenditures are "946" and "512".

Project Code 946. As described above, a reallocation 11 of certainamounts of State Title I aid received by Board for school year 1981-82caused certain schools to receive a larger amount of State Title I fundsthan they had received in prior years. Schools that received thesupplementary allocation of State Title I aid were certainof the schools classified as racially isolated schools pursuant to thePlan.

Board used those "reallocated" State Title I funds in school year 1981-82to provide one source of funding for programs initially implemented inthat year as part of the Plan's Educational Components at those raciallyisolated schools.12. Board was not required to use the supplementalallocation of State Title I aid to fund desegregation purposes at theseschools. To the contrary, such funds could have been used to implementany one or more of a myriad of "State Title I eligible" programs. HoweverBoard, in seeking to provide the necessary funds to implement at least aportion of the program elements of the Plan's Educational Components,chose to use the supplemental allocation of State Title I aid to fundcertain of its desegregation programs.

Appropriations and expenditures attributable to that supplementalallocation of State Title I funds are designated by project codes 946/947(946 referring to employee salaries and related expenses and 947referring to expenses for instructional materials).

Board has continued, in schools years 1982-83 and 1983-84, to use thatsupplemental allocation of State Title I aid to fund a portion of thePlan's Educational Components. Again the decision to use such funds tosupport desegregation programs is made by Board, not as required by Statelaw or regulation. As a result of (a) fluctuations in the amount of Stateappropriations for education, (b) changes in the Common School Fund StateAid formula and (c) changes in the number and attendance area of "Title Ieligible" children, the total amount of the supplemental allocation hasvaried between $15 and $17 million per year (with the amount allocated toeach school also changing annually to some extent).13.

Project Code 512. Desegregation expenditures attributable to ProjectCode 51214. are those that relate to components of the Plan initiatedduring and carried over from Access to Excellence — Board's priordesegregation program. When Access to Excellence was initiated in schoolyear 1978-79, expenditures made under that program were designated as"512" in order to account for them separately.

At its inception, Access to Excellence was a new program — anincrement to Board's previously existing level of appropriations andexpenditures. Moneys to fund the program were provided from Board'sgeneral resource base. Stated another way, the cost of implementing thedesegregation programs initiated under Access to Excellence was met by anincrease in Board's overall resource base, a reduction in expendituresfor other programs or a combination of the two in school year 1978-79— the year in which implementation was initiated.

When the "targeting requirements" for State Title I aid wereimplemented beginning in school year 1979-80, Board attributed thefunding for various of its previously established and already existingeducational programs to State Title I aid. That was done to demonstrateState Title I aid was in fact being used to support programs designed tomeet the "educational needs of disadvantaged children." However theimposition of the targeting requirement did not require that new programsbe established. Instead Board wasrequired to demonstrate that it was providing a sufficient amount ofeducational services that the State Board of Education considered as"Title I eligible." Among the programs included in those attributable to"State Title I" aid were the desegregation programs previously initiatedunder Access to Excellence.

But such attribution was no more than a record-keeping matter. It didnot result in the implementation or initiation of new programs. Boardmerely treated the Access to Excellence programs as being funded fromState Title I aid, whereas it had previously made no effort to identifythe source of funding for this program. Again the attribution process wasundertaken simply to comply with the statutory targeting requirementestablished for State Title I aid.

In other words, State Title I aid funds attributed to (a) Project Code512 desegregation programs and (b) other components of Board's generalresource base are fungible. Board is simply under a statutory obligationto demonstrate it is providing the requisite amount of "State Title Ifunded" services at all schools in the system. It may comply with thatrequirement by attributing the cost of previously established programs toState Title I aid if those programs are considered by the State to beeligible.

Attribution of the funding for those desegregation programs (identifiedby Project Code 512) to State Title I aid has continued to the currentschool year. What is significant, however, is that even if those programswere hypothetically eliminated by Board, it is most likely that anotherpreviously established and funded program would then be attributed toState Title I aid, so that the funds presently budgeted for thosedesegregation programs would be available to Board for other purposes.

In summary, the only significance of the relationship between "ProjectCode 512" desegregation expenditures and the State Title I program isthat all desegregation appropriations designated as "512" appropriationsare also considered as "State Title I eligible" programs.

Summary

Project Code 512 and 946 expenditures are the only desegregationexpenditures that are in some way "attributable" to State Title I aid, asdescribed above. Such "attribution" of "512" expenditures to State TitleI funds is simply an accounting or bookkeeping concept used in connectionwith the need to demonstrate compliance with the statutory targetingrequirements. All desegregation expenditures (other than those fundedfrom federal sources) are appropriately attributable to general Boardresources. (Board Ans. to U.S. Second Set of Interrogatories; Bacchustestimony)

Availability of Federal Funds To Implement the Chicago Desegregation PlanPresently Available Funds

401. In fiscal year 1984 Congress appropriated $47,447,000 for fivesubaccounts within Secretary's Special Programs and Populations account,including the Title IV subaccount. (P.L. 98-139, Title III, 97 Stat.888; United States Response to Board's Second Request to Admit, No. 17)

402. In each of fiscal years 1983 and 1984 Secretary allocated $24million to provide grants through Title IV of the Civil Rights Act of1964, 42 U.S.C. § 2000c-2 — 2000c-4. (Opinion II Finding ofFact No. 34, 567 F. Supp. at 277; Stip. 305)

403. There is no duty imposed on Secretary to provide fiscal year 1984Title IV funds for awards to continuing grantees under multi-year grantcontracts. (United States' Response to Board's Second Request to AdmitNo. 18; Stip. 305).

404. All multi-year awards of Title IV funds are subject to Secretary'sregulations at 34 C.F.R. § 75.253, which state continuation of thesegrants is contingent upon Secretary's finding that sufficient programfunds are available for these grants and that it is in the best interestof the United States to provide these continuation awards.

405. All fiscal year 1984 funds allocated for the Title IV program arecurrently unobligated. Secretary has notified all applicantsfor (and his selected recipients of) 1984 Title IV funds that all grantawards are contingent upon the outcome of the present litigation. (48Fed.Reg. 56254, 56255, December 20, 1983)

406. For fiscal year 1982 and subsequent years, the Department ofEducation determined the appropriation available under Title IV of theCivil Rights Act of 1964 would be used for desegregation assistancecenters (DACs) and state education agencies (SEAs), rather than directgrants to local education agencies and training institutes. (Stip. 336)

407. In fiscal year 1983 Secretary provided no Title IV funds directlyto local educational agencies through the grant program authorized at42 U.S.C. § 2000c-4. (Harrison Dep. 26, 35-36; United States'Response to Board's First Request to Admit, No. 15; Christensentestimony)

408. Many of the inservice and advisory programs in Board's EducationalComponents were (with regard to federal fiscal year 1983 funds) and are(with regard to federal fiscal year 1984 funds) and are (with regard tofederal fiscal year 1984 funds) eligible for Title IV race and nationalorigin desegregation assistance through the program authorized at42 U.S.C. § 2000c-4. (42 U.S.C. § 2000c; 34 C.F.R. § 270.03;270.04, 270.06; inference from Harrison Dep. 65-66; Brady testimony.)

409. Secretary has approved advisory, staff development and inservicetraining programs for Title IV funds where they contribute, develop ordisseminate information or skills that materially assist in the effectiveimplementation of a desegregation plan. Secretary has approved training,staff development and advisory services for Title IV funds where he findsthey are related to and materially assist in implementing a desegregationplan. (Board Ex. 72, Decision Memoranda Nos. 137, 123, 114, 90, 49, 15;Board Ex. 72, Decision Memoranda Nos. 137, 123, 114, 90, 49, 15; BoardEx. 75, Technical Review of Board's 1981 Application for Title IVAssistance; Board Exs. 104, 105, 106, Technical Review of Board's 1980Application for Title IV Assistance)

410. Secretary has approved inservice training and advisory activitiesfor Title IV funding in connection with programs designed to raiseminority pupils academic achievement where these programs were requirededucational remedies in a court approved desegregation plan and weresupplemental to a school district's pre-existing compensatory educationor basic skills programs. (Harrison Dep. at 66)

411. Secretary has also approved for Title IV funding inservicetraining and advisory activities in connection with programs designed toraise minority pupils' academic achievement, where the inservice andadvisory activities were specifically directed toward educationaltechniques or instructional strategies to teach minority pupilseffectively. (Harrison Dep. 65)

412. Secretary's 1981 Decision Memoranda, which constitute his noticesof the amount and purposes for which Title IV grant awards were made tolocal educational agencies, accurately describe the types of programs oractivities for which Secretary makes Title IV funds available. (BoardEx. 72)

413. In fiscal years 1980 and 1981 Board applied for and received TitleIV grants in the amounts of $422,800 and $298,639, respectively.Secretary approved those grants, based upon the inservice and advisoryprograms described in Board's applications, for activities in connectionwith the planning and initial implementation of Board's EducationalComponents. In both fiscal years 1980 and 1981 Secretary found that allinservice and advisory programs for which Board sought Title IV funds, asdescribed by Board in its applications, were activities authorized forTitle IV assistance. (Board Exs. 73, 74, Board's 1980 and 1981Applications for Title IV Application; Board Ex. 75, Review of Board's1981 Application for Title IV Assistance; Board Exs. 104, 105, 106,Review of Board's 1980 Application for Title IV Assistance; 1980 DecisionMemoranda No. 37)

414. In providing Title IV grants to local educational agencies throughthe program authorized by 42 U.S.C. § 2000c-4, Secretary has notsince 1978 held grant award competitions. (43 Fed.Reg. 111676, 11677 and11686, March 20, 1978; 43 Fed. Reg. 32372, 32379, July 26, 1978). InsteadSecretary has made Title IV assistance available at various timesthroughout each such fiscal year on an application-by-application basis.(Id.; 34 C.F.R. § 270.74 (a)) Funding decisions with respect toindividual applications for Title IV funds were made as applications werereceived. (Id.; Harrison Dep. 61) No numerical criteria were used toevaluate individual applications, and no rank ordering of applicationswas made. Secretary made only a recommendation to accept or reject aparticular application for Title IV funds on the basis of the selectioncriteria specified at 34 C.F.R. § 270.74 (b)(1)-(5). (Id.; HarrisonDep. 61, 63; Board Ex. 75, Technical Review of Board's 1981 Application;Board Exs. 104, 105, 106, Technical Review of Board's 1980 Application)

415. Secretary has in the past promulgated Title IV regulationspursuant to his statutory authority to consider "other relevant factors"in awarding Title IV funds, 42 U.S.C. § 2000c-4. (See e.g., 40Fed.Reg. 12346, 12350, § 180.44, March 17, 1975)

416. Certain provisions of Secretary's Education Department GeneralAdministrative Regulations ("EDGAR"), including the provisions at34 C.F.R. § 75.105 that permit him to establish program priorities,competitive preferences and absolute preferences, apply to the Title IVgrant program. (34 C.F.R. § 75.1; 75.2, 270.02(e))

417. In each of fiscal years 1983 and 1984 Congress appropriated$28,765,000 for Secretary's Discretionary Fund, 20 U.S.C. § 3851.(Stip. 309; United States Response to Board's First Request to AdmitNos. 29, 31; United States Response to Board's Second Request to AdmitNo. 23; P.L. 98-139, Title III, 97 Stat. 888) of this sum, Secretary isrequired to use $10,725,000 to fund the statutorily mandated programsspecified in 20 U.S.C. § 3851 (b). (United States Response to Board'sSecond Request to Admit No. 11) Secretary was authorized in fiscal years1983 and 1984 to spend the remaining $18,040,000 reserved for Secretary'sDiscretionary Fund for the purposes or programs specified in20 U.S.C. § 3851 (a). (Christensen testimony)

418. That sum of $18,040,000 appropriated to Secretary's DiscretionaryFund in fiscal year 1984 is currently unobligated. Secretary has notifiedall applicants for (and his selected recipients of) those funds thattheir availability to finance grant awards is contingent upon the outcomeof the present litigation. (49 Fed.Reg. 7551, February 29, 1984; 49Fed.Reg. 2462, January 19, 1984; 48 Fed.Reg. 50919, November 4, 1983;Board Ex. 76, Letter from William Hopkins to Robert McErath)

419. As indicated in the grant contracts, all multi-year awards ofdiscretionary funds are subject to Secretary's regulations at34 C.F.R. § 75.253, which state that continuation of these grants iscontingent upon Secretary's findings that program funds are available forthese grants and that it is in the best interest of the United States tomake these continuation awards. (Board Ex. 107, exemplary grantcontracts)

420. Secretary usually applies the EDGAR provisions relating to theselection of projects for funding after a rank ordering of allapplications for grants from the Discretionary Fund. However, Secretarymakes the final selection of those applications for funding, and he maychange the order in which applications will be funded based upon anyinformation in the application, any other information he deems relevantto the program criteria and any priorities he has established to setaside or otherwise use his discretionary funds. Moreover, Secretary'sauthority to create preferences and priorities subsumes those"competitive" selection procedures. He may use those preferences andpriorities to create a program for a single applicant, reservediscretionary moneys for that applicant without regard to the EDGARcompetitive selection criteria. (34 C.F.R. § 75.105(e)(3); 34 C.F.R. § 75.217 (d)-(e); Christensen testimony)

421. Secretary has acknowledged he is not required to use hisDiscretionary Funds to finance programs as to which reports of House orSenate Appropriations Committees "recommend" or "encourage" suchfinancing. (Board Ex. 60 at 2).

422. of the sums appropriated in fiscal year 1984 for thenonstatutorily mandated programs within the Discretionary Fund,$4,890,000 was not "recommended" or otherwise "directed" for particularprogram expenditures by language in Appropriations Committees reports.(Inference from H.R.Rep. No. 422, 98th Cong. 1st Sess. 21 (1983); S.Rep.No. 247, 98th Cong. 1st Sess. 129 (1983); H.R.Rep. No. 357, 98th Cong.1st Sess. 109-110 (1983))

423. In fiscal year 1984 Congress appropriated $47,447,000 generally tothe Special Programs and Populations account to finance the followingsubaccounts: Title IV; Follow Through; Territorial Teacher Training; Aidto the Virgin Islands; Women's Education Equity. (Stip. 304) Particularsums were not statutorily earmarked or allocated for any of thosesubaccounts. (P.L. 98-139, Title III, 97 Stat. 888; United StatesResponse to Board's Second Request to Admit No. 17; Christensentestimony)

424. of the $47,447,000 appropriated in fiscal year 1984 for Title IVand the four subaccounts in the Special Programs and Populationsaccount, $23,447,000 was allocated for those other subaccounts and $24million was allocated for the Title IV subaccount. (Christensentestimony; Board Exs. 57 and 64)

425. Secretary could legally reprogram into the Title IV subaccount$13,100,000 of the $23,447,000 allocated to the other Special Programsand Populations subaccounts. After such a reprogramming, Secretary couldallocate the balance of the appropriation to the other Special Programssubaccount as he would deem appropriate. That remaining balance wouldpermit Secretary to fund each other Special Programs subaccount at ameaningful level. (Inference from Christensen testimony)

426. No statutes or administrative regulations address Secretary'sauthority to reprogram funds between subaccounts in an appropriationaccount. Secretary's reprogramming policies or practices derive from hisrelationship with congressional appropriations committees and guidelinesissued by those committees. (Christensen testimony; Harrison Dep.138-39)

427. It is Secretary's policy to receive the approval of bothappropriations committees chairmen before effecting a reprogramming offunds. Absent the consent of both chairmen, Secretary will not reprogramfunds between subaccounts. (Christensen testimony)

428. Secretary acknowledges that, notwithstanding this policy, he hasthe legal authority to reprogram into the Title IV subaccount fiscal year1984 funds from the other Special Programs and Populations subaccountsafter notifying the chairmen of the two congressional appropriationscommittees of his intention to do so. (Christensen testimony; HarrisonDep. at 138-139; Board Exs. 68, 69). Most significantly for currentpurposes, however, whether or not Secretary has such legal authority (orwhether he views the matter as controlled by practical considerationssuch as his relationships with Congress), Secretary has made no effortwhatever to take steps to reprogram funds to honor the United Statesobligations under Consent Decree § 15.1 — either by applicationto Congress or on his own, and either before or since the Court ofAppeals decision "provide[d] the Department an opportunity to fashion itsproposed remedy for past non-compliance, as well as a chance to show thatit intends to comply in the future. . . ." 717 F.2d at 385.

429. From 1979 through the present, Secretary formally requestedapproval from congressional appropriations committees for sixteenreprogrammings of funds. Eleven of these reprogramming requests wereapproved and five were disapproved. One of those reprogrammings wasdesignedspecifically to provide for a single program (PUSH-EXCEL), which wouldhave been eliminated absent the reprogramming. During the same periodSecretary also effected two reprogrammings without seeking congressionalapproval. (Christensen testimony; Board Exs. 68, 69)

480. As indicated in the grant contracts, all multi-year awards offunds from any of the Special Programs and Populations subaccounts aresubject to Secretary's regulations at 34 C.F.R. § 75.253, which statethat continuation of these grants is contingent upon Secretary's findingsthat program funds are available and that it is in the best interest ofthe United States to make such continuation awards. (Board Ex. 107,exemplary grant contracts)

431. All the $23,447,000 allocated to the four Special Programs andPopulations subaccounts (not including Title IV) is currentlyunobligated. Secretary has notified all applicants for (and his selectedrecipients of) those funds that their availability for grant awards iscontingent upon the outcome of the present litigation. (See e.g., 48Fed.Reg. 53149, November 25, 1983; 48 Fed.Reg. 55898, December 16, 1983)

432. Fiscal year 1982 funds not used by fiscal year 1982 Follow Throughand Title IV grantees ("carryover funds") aggregated $1,087,555,consisting of $440,300 in Follow Through funds and 647,255 in Title IVfunds. (United States Answer to Board's Second Set of Interrogatories,No. 11) Secretary had the authority to allow the grantees to expend thosefunds in fiscal year 1983, or to require that grantees return those fundsto the United States. However, pursuant to Opinion II, those "carryover"funds were applied by the original grantees to fiscal year 1983programs. Accordingly an equal amount of fiscal year 1983 funds has beenset aside in the Department of Education's accounts. (Stip. 318) That$1,087,555 in carry-over funds is available for expenditure in fiscalyear 1984.

433. Board Ex. 88 was prepared by the United States. (United StatesAnswer to Board's Second Set of Interrogatories, No. 9) It sets forth theamount of funds from Department of Education appropriations that lapsedin fiscal year 1981 and 1982. It also shows that $21,188,206 ofnon-desegregation funds from various Department of Educationappropriations would have lapsed in fiscal year 1983, except that thosefunds were escrowed by this Court. (Stip. 315)

434. "Lapsed funds" are funds appropriated to various non desegregationprograms of the Department of Education that have not been obligated atthe end of the fiscal year and that therefore revert to the United StatesTreasury. Legislation would be required to reallocate lapsing funds andmake such funds legally available for and provide them to Board.Secretary may not provide such lapsed funds to any grantee withoutcongressional authorization. Such funds could be allocated to Board forits desegregation activities through a congressional re appropriation.(Stip. 314; Christensen testimony)

435. As represented in the Appendix to the President's Budget forfiscal year 1985, it is estimated that at the end of fiscal year 1984 thefollowing amounts of funds appropriated to the Department of Educationwill remain unobligated and otherwise lapse:

Bilingual Education . . . . . . . . . . $30,000,000 Higher Education . . . . . . . . . . . . $1,920,000

(Board Ex. 57)

436. Department of Education's Office for Civil Rights enters intocontracts with various organizations to provide technical assistance tolocal educational agencies. That program is intended to assist localeducational agencies in complying fully with Title VI requirements.(S.Rep. No. 247,98th Cong. 1st Sess. 163-64 (1983)). It was created bythe Office for Civil Rights pursuant to its authority to make anypayments necessary to carry out its compliance and enforcement functions.(20 U.S.C. § 3413 (c)(3); P.L. 98-139, Title III, 97 Stat. 894)

437. With funds appropriated to the Department of Education's Salariesand Expensesubaccount, Secretary has financed program administration activities,including policy analyses, special projects, advisory committeeoperations and program evaluation contracts. (Board Ex. 57, Appendix tothe Budget for Fiscal Year 1985, at 1-122)

438. This Court has not been advised by the United States as to theamount, in funds or other property, currently within Secretary's Salaryand Expense subaccount, Office for Civil rights subaccount or Secretary'sGift and Bequest account.

Actions by the United States Affecting the Availability of Funds

439. As the following specific Findings in this section reflect, sincethe entry of Opinion II nearly a year ago — June 30, 1983 —the United States has taken no action to provide presently availablefunds to Board. Rather it has engaged in conduct designed to renderunavailable both existing funds and any future sources of funds thatcould be used for implementing Board's Desegregation Plan. For over ninemonths (since the Court of Appeals decided on September 9, 1983 theUnited States was in direct violation of its obligation under ConsentDecree § 15.1) that course of conduct has been in directcontravention of the Court of Appeals granting the United States "anopportunity to fashion its proposed remedy for past non-compliance, aswell as a chance to show that it intends to comply in the future. . . ."717 F.2d at 385.

440. Secretary has failed or refused to provide to Board any of thepreviously restrained 1983 funds that became available for distribution tograntees, including Board, pursuant to this Court's November 21, 1983Order. (Motion of the United States to Modify the June 30 Order andSupporting Memorandum, filed February 2, 1984; Plan of the UnitedStates, filed November 10, 1983).

441. No request whatever for funding for Title IV of the Civil RightsAct of 1964 ("Title IV") was included in the Budget for the Department ofEducation submitted and proposed by the Executive Branch for federalfiscal year 1984 (the "President's Budget"). (A2-15) (Stip. 302; BoardEx. 57)

442. From the available fiscal year 1984 funds appropriated for theTitle IV program, Secretary intends to provide no direct grants of TitleIV funds to any local educational agency, including Board. (United StatesResponse to Board's Second Request to Admit, No. 25; Stip. 310;Christensen testimony)

443. As represented in the President's Fiscal Year 1985 Budget,Secretary has requested Congress to appropriate no funds to providedesegregation assistance through Title IV in fiscal year 1985. (BoardExs. 56 (at 107-108) and 57)

444. No request for funding the Women's Educational Equity Program, theFollow Through Program, Aid to the Virgin Islands, and the TerritorialTeacher Training Program (collectively "the other Special Programs") wasincluded in the President's Budget for fiscal year 1984. (United States'Response to Board's Second Request to Admit, No. 16; Stip. 303) Thoseprograms are the subaccounts currently subject to Opinion II. (Christensentestimony)

445. Secretary does not intend to reprogram to the Title IV subaccountany fiscal year 1984 funds appropriated for the Discretionary Fund orallocated to the other Special Programs. Section 309 of the ECIA (enactedin 1981) had the effect of limiting to $13,100,000 the amount of fiscalyear 1984 funds the Secretary theoretically could reprogram to Title W.There is no such limit for fiscal year 1985. (Stip. 313) 446. From theavailable fiscal year 1984 funds appropriated by Congress and allocatedto the Special Programs and Populations subaccounts, Secretary has notreprogrammed and does not intend to reprogram moneys into the Title IVsubaccount. (Stip. 313)

447. Finding 429 reflects Secretary's prior efforts towardreprogrammings of funds. Secretary has never sought or requested approvalfrom congressional appropriations committees for a reprogrammingof funds to subaccounts from which desegregation assistance could be madeavailable to Board. (Christensen testimony)

448. As represented in the President's fiscal year 1985 Budget, theExecutive Branch has requested Congress to appropriate no funds in fiscalyear 1985 to the Special Programs and Populations subaccounts currentlysubject to Opinion II. (Board Ex. 56 at 77)

449. Secretary does not intend to distribute fiscal year 1984 moneysfrom his Discretionary Fund to any local educational agency for directoperating costs of a desegregation plan. (Stip. 312)

450. Secretary does not intend to set aside federal fiscal year 1984Discretionary Fund moneys specifically to fund a portion of Board'sdesegregation program costs. However, Board may submit a competitiveapplication for a project that Secretary considers eligible under theDiscretionary Fund. (United States Response to Board's Second Request toAdmit, No. 27) Should such an application be favorably considered by theDepartment, it is unlikely that Board would receive an award of more than$75,000 to $175,000. (Stip. 311)

451. Secretary intends in fiscal year 1984 to distribute all moneysappropriated to the Discretionary Fund only for the statutorily mandatedprograms specified at 20 U.S.C. § 3851 (b) or to support projects oractivities that Secretary determines will further a national educationalpriority or need. (Board Ex. 57; Justification of Appropriations Estimatesfor Fiscal Year 1984 at 50; United States Answer to Board's Fifth Set ofInterrogatories, No. 2; 49 Fed. Reg. 7546, February 29, 1984) Secretarywill not provide from his Discretionary Fund a direct grant of financialassistance to a local educational agency, including Board, for the costsof implementing a desegregation plan. (United States Answer to Board'sFifth Set of Interrogatories, No. 5; Christensen testimony)

452. On February 29, 1984 Secretary promulgated proposed regulationsestablishing eligibility criteria for local educational agency grantsfrom the Discretionary Fund. (49 Fed.Reg. 7546, February 29, 1984) Asdescribed in those proposed regulations, Secretary's policy is not toprovide discretionary funds to meet "local needs." Secretary defines aprogram that meets a "local need" for purposes of awarding DiscretionaryFund moneys as any program that is also authorized for financing underECIA Chapter 2, 20 U.S.C. § 3821. Those regulations also describeSecretary's policy to distribute Discretionary Fund moneys pursuant to20 U.S.C. § 3851 (a)(4) only to provide technical assistance to alocal educational agency. Applying that regulatory policy, Secretarywould find that the programs and program elements making up Board'seducational components do not qualify for Discretionary Funds in fiscalyear 1984 and in future fiscal years. (United States Answer to Board'sFifth Set of Interrogatories, No. 5; Board Ex. 87)

453. Included in the President's fiscal year 1985 Budget is a requestedappropriation of $43,224,000 for Secretary's Discretionary Fund for fiscalyear 1985. (Board Ex. 56, Justifications of Appropriations Estimates forFiscal Year 1985 at 77, 94; Board Ex. 57) Secretary intends to use$31,599,000 of that amount for the nonstatutorily mandated purposes orprograms specified in 20 U.S.C. § 3851 (a). His intended uses do notinclude financing Board's desegregation activities.

454. No fiscal year 1981, 1982 or 1983 lapsed funds have been providedby the United States to Board for the Plan. Nor has the United Statessought, nor does it currently intend to seek, legislation to provide suchfunds to Board. (Stip. 316)

455. Secretary does not currently intend to take any steps to provideto Board, for the purpose of financing its desegregation activities, anyfiscal year 1984 or later year funds that otherwise will lapse in suchyears. (Stip. 317)

456. In addition the United States has not provided any of the"carryover funds" identified in Finding 432 to Board for implementationof the Plan. Nor has theUnited States taken, nor does it currently intend to take, steps toprovide such funds to Board. (Motion of the United States to Modify theJune 30 Order, and supporting memorandum, filed February 2, 1984; Stips.318, 319)

457. Absent Opinion II, Secretary would have allowed the grantees toexpend the 1982 "carryover funds" in 1983 without setting aside acorresponding amount of 1983 funds. (Id.)

458. In fiscal year 1984 the United States has not sought authorizinglegislation or a specific appropriation to finance all or any part ofBoard's cost of implementing its desegregation plan. (Plan of the UnitedStates filed November 10, 1983: Report of the United States filed July14, 1983)

459. In the President's fiscal year 1985 Budget, the Executive Branchdid not propose authorizing legislation or a specific appropriation tofinance all or any part of Board's cost of implementing its desegregationplan. To the contrary, in that budget the Executive Branch is seekingspecific legislation to make all funds appropriated to the Department ofEducation unavailable for Board. (Board Ex. 57 at 1-124 § 309). Thatproposed legislation is intended to make all funds, other than thosespecifically appropriated for that purpose, unavailable to Board for usein implementing its Desegregation Plan. Inclusion of that proposal withinthe 1985 Budget is consistent with the policy of the Executive Branch ofthe United States to deny funding to Board for desegregationimplementation. (Christensen testimony)

460. Secretary can include, in the President's budget requests toCongress, budgetary line items that request Congress to provide funds forparticular purposes, activities or programs that Secretary has notpreviously undertaken. Such a request for funds is known as a"nonauthorized line item" or a "nonauthorized program." It is Secretary'spractice to transmit authorizing legislation for such a line itemsimultaneously with the appropriation request. If Congress appropriatesfunds for and authorizes the use of such a line item, Secretary isauthorized to spend funds for that purpose. (Christenen testimony; UnitedStates General Accounting Office, Principles of Federal AppropriationsLaw at 2-11, 2-12, 2-26, 2-27 (1983)

461. There is currently a line item (but without any authorized amount)in the President's fiscal year 1985 Budget entitled "ChicagoDesegregation Activities." As reflected in the President's fiscal year1985 Budget, Secretary does not intend to request that Congress provideany funds to this line item in fiscal year 1985. (Board Ex. 57, Appendixto the Budget for fiscal year 1985 at 1-113; Board Ex. 64, 1985President's Budget at 2; Christensen testimony)

462. In the President's budget requests to Congress, Secretary caninclude budgetary line items within grant programs or other types ofaccounts. Secretary may create such line items to indicate the basis forthe appropriation amount requested and the manner in which he intends toallocate funds appropriated to the grant program or account. (Christensentestimony; Board Ex. 56 at 95-96; Board Ex. 58 at 48; Board Ex. 61 at 2,3; Board Ex. 62 at 2; United States General Accounting Office, Principlesof Federal Appropriations Law at 2-11, 2-12, 2-26, 2-27, (1983)

463. In the President's fiscal 1985 budget, Secretary has not includedany such line item in his Title IV, Secretary's Discretionary Fund orDepartmental Management subaccounts that would allow him to reserveappropriated funds for Board's desegregation activities. (Christensentestimony; Board Exs. 56, 57)

464. Federal fiscal year 1984 funds generally will not be expendeduntil the summer of 1984 and, with some exceptions, are primarily for usein school year 1984-85. (Stip. 344)

465. In fiscal year 1984 there are minimal sources and amounts of fundsavailable to the United States to provide desegregation assistance forBoard. Those limitations upon the United States availableresources result from its failure — perhaps more accurately, itsrefusal — to seek or make available sufficient funds to meet itsConsent Decree obligations. As detailed in Findings 440-63, the UnitedStates through Secretary has failed, and most recently has refused, torequest from Congress in fiscal years 1982 through 1985 sufficient fundsto apply toward Board's desegregation needs. It has not sought toestablish funding sources that specifically recognize its Consent Decreeobligations and are in addition to those previously created by Congressfor desegregation assistance. It did not request sufficient fiscal 1984appropriations, and has not requested sufficient fiscal year 1985appropriations, to enable it to meet its Consent Decree obligations, whilesimultaneously it has provided a significant amount of these funds tootherwise eligible applicants. On behalf of the United States, Secretaryhas deliberately reduced available funds and created competition betweenBoard and other applicants for the funds from these pre-existingsources.

467. Such limited availability of fiscal year 1984 funds for provisionto Board pursuant to the Consent Decree is a direct result of thefailures and refusals of the Executive Branch to seek funds for financingthe Plan and, even worse, its affirmative efforts to render existingfunds unavailable to Board. Those actions, particularly since the Courtof Appeals affirmance of Opinion II's determination that the UnitedStates was in violation of Consent Decree § 15.1, constitute furtherwillful violations of the Consent Decree by the United States.

Actions with Respect to the Yates Bill and Weicker Amendment

501. As the following findings in this section reflect, from the firstdraft of the Yates Bill through the passage of the Weicker Amendment, theExecutive Branch intentionally sought to secure passage of legislationthat would have earmarked the funds restrained by Opinion II (a restraintupheld by the Court of Appeals, 717 F.2d at 385) to render themunavailable to Board.

502. On August 13, 1983 the President vetoed H.J.Res. 338, a billsponsored by Representative Yates, the only substantive provision of whichwas a $20 million appropriation to enable Secretary to comply with theConsent Decree. (Stip. 320) 503. Both the message of the Presidentaccompanying that veto (Board Ex. 78) and the subsequent statement ofSecretary of Education Terrel Bell (Board Ex. 79) express the officialpolicy of the Executive Branch, including the Department of Education, totake actions designed specifically to render funds for desegregationassistance unavailable for Board. (Chambers Dep. 57-58, 69; Christensentestimony)

504. On or about September 21, 1983, during the mark-up in the HouseAppropriations Committee of H.J. Res. 367 (a continuing resolutiondesigned to provide temporary funding in federal fiscal year 1984 forseveral federal departments), Representative Yates added Section 111 tothe proposed legislation. During the same mark-up Representative Conteadded Section 112 to the proposed legislation, a provision intended to"earmark" funds that had been previously restrained by order of thisCourt and to provide such funds could be received only by grantees otherthan Board. Representative Conte's amendment was adopted by theAppropriations Committee. (Stip. 321)

505. Representative Conte's "earmarking" proposal was supported by theExecutive Branch. It was intended to render the funds previouslyrestrained by this Court unavailable to Board. Representative Conte'samendment was not adopted by the full House. (Christensen testimony;Chambers Dep. testimony; Board Exs. 78-87 and 89.)

506. On or about September 22, 1983 the House leadership announced thatH.J. Res. 367 was overburdened with amendments and would be redrafted.That redraft was H.J.Res. 368 (another continuing resolution), whichcontained RepresentativeYates Section 111 but did not contain Representative Conte's Section112. (Stip. 322)

507. During Congressional consideration of H.J.Res. 368, ExecutiveBranch officials prepared an alternative to Section 111 in an attempt tosecure legislation that would release the restrained funds to granteesother than Board only under certain conditions. Their proposed substitutelanguage (Board Ex. 80) was given by Executive Branch officials to staffmembers of the House and Senate Appropriations Committees for inclusionin H.J.Res. 368 as a substitute for Rep. Yates Section 111. That proposedlanguage would have established a contingency fund to satisfy any finalcourt order against the United States resulting from this litigation andwould have made all other fiscal year 1983 funds unavailable for thispurpose. (Stip. 323; Chambers Dep. 49-50, 60-61) It was prepared by theDepartment on its own initiative and was given to the respectiveappropriations committees (after Rep. Conte's earmarking proposal wasdefeated) as the Department's "preferred" substitute for RepresentativeYates Section 111. (Chambers Dep. 61-62)

508. On September 29, 1983 Secretary Bell testified before theSubcommittee on Education, Arts and the Humanities of the Senate Laborand Human Resources Committee. His testimony included a statement thatthe Office of Management and Budget had the day before cleared thesubstitute language referred to in Finding 507, thus indicating officialExecutive Branch approval of the substitute. (Stip. 324; Chambers Dep.65-66, 69, 79-81, 131)

509. Before the Congress Executive Branch officials supported theExecutive Branch alternative to the Yates Bill (Stip. 330) and officiallyopposed the enactment of the Yates Bill. (Chambers Dep. 62 et seq.)

510. On October 1, 1983 the President signed into law H.J.Res. 368(which included Section 111, the "Yates Bill", appropriating $20 millionto enable Secretary to comply with the Consent Decree). (P.L. 98-107)Unlike H.J.Res. 338, sponsored by Representative Yates, which had been afree-standing bill dealing only with funding Board's Plan to the extentof $20 million (so that the President could and did veto the measurewithout affecting other legislation), H.J.Res. 368 covered a host oftemporary funding items of an emergency nature, so that a veto would haveimpacted the operations of many other federal departments. Consequentlythe President's signing of H.J.Res. 368 did not at all indicate theExecutive Branch had altered its opposition to providing any funds toBoard to honor the United States obligations under the Consent Decree.

511. On the contrary, as the following Findings reflect, after theYates Bill thus became law the Executive Branch continued its efforts tosecure passage of a statute specifically designed to render unavailableto Board any funds other than those appropriated for it by the YatesBill. Those efforts clearly represented a violation of the United Statesduties under Section 15.1 as declared by the Court of Appeals.

512. H.R.3913, the Labor, Health and Human Services and EducationAppropriations Bill for fiscal year 1984, was considered in the SenateOctober 4, 1983. During Senate consideration Senator Weicker proposedfirst his original and then his modified amendment (Sec. 308) toH.R.3913. On October 4, 1983, but sometime before the introduction ofSenator Weicker's proposals, a staff member of the Senate AppropriationsCommittee requested technical assistance from the Department of Educationin preparing legislative language to ensure that funds, other than thoseappropriated in Section 111 of P.L. 98-107, would not be available to fundthe Consent Decree. In response to that request the Department ofEducation prepared and transmitted two alternatives to the staff member(Board Ex. 82), the second of which alternatives was proposed by SenatorWeicker as amendment number 2277:

No funds appropriated in any act to the Department of Education for fiscal years 1983 and 1984 other than those appropriated by Section 111 of the Public Law 98-107 shall be available to fund the Consent Decree of 1980 between the United States and Board of Education of the City of Chicago.

Cong.Rec., S.13506. Although the Senate adopted that amendment, it waslater withdrawn and the language of the first alternative (which becameSection 309 of P.L. 98-139) was adopted by the Senate later the sameday. As enacted, the Weicker Amendment reads:

No funds appropriated in any act to the Department of Education for fiscal years 1983 and 1984 shall be withheld from distribution to grantees because of the provision of the order entered by U.S. District Court for Northern District of Illinois on June 30, 1983: Provided, that the Court's decree entered on September 24, 1980 shall remain in full force and effect.

(Stip. 326; Chambers Dep. 66-69; Christensen testimony)

513. Also on October 4, 1983 Representative Conte presented anamendment to H.R.3959 that would have earmarked fiscal year 1983 funds inthe "Special Programs" account. Cong.Rec. H7973. On October 5, 1983Representative Conte described that amendment as being the one he hadproposed in conjunction with H.J.Res. 367 but stated that he was not goingto propose it "[B]ecause the Senate added an amendment dealing with thissubject during their floor consideration of [H.R.3913] . . ." (H8017).(Stip. 327)

514. As already found, the Department of Education (through StevenWinnick, Esq. of its Office of General Counsel, and its Director ofBudget Services) prepared and conveyed the language originally proposedby Senator Weicker. (Chambers Dep. 66-69; Christensen testimony) Itspecifically designed that language to render all restrained fiscal year1983 and 1984 funds unavailable to Board to finance its desegregationactivities. (Chambers Dep. 69; Christensen testimony)

515. On or about October 13, 1983, in response to requests fortechnical assistance from staff members of the House AppropriationsCommittee who were preparing for the conference committee on H.R.3913,the Department of Education prepared substitute bill language for SenatorWeicker's Amendment number 2277, possible report language for inclusionin the Conference Committee Report and a paper entitled "Talking Points,"and it transmitted all three items to members of the ConferenceCommittee. (Board Exs. 83-85; Stip. 328; Chambers Dep. 72-73, 76, 84,91-92)

516. All three items referred to in Finding 515 were specificallydrafted and intended by the Department to render funds unavailable forimplementing Board's Desegregation Plan. (Chambers Dep. 72-73, 76-79,85-87) During the current hearings before this Court, representatives ofthe Department of Education sought to portray themselves as whollypassive respondents to requests from Congress for technical assistance,implicating no substantive or policy judgments by the Department. Thatmay well be the usual function of the Department in connection withpossible legislation, but in light of the foregoing Findings it is totallydisingenuous in the present instance. This Court does not credit suchtestimony and finds it additional confirmation of the findings madeelsewhere as to the bad faith of the United States.

517. In the October 20, 1983 Congressional Record there is an extensionof remarks by Representative Conte concerning the modified WeickerAmendment (H8470). That statement was adapted by Representative Conte'sstaff from the materials supplied by the Department of Education referredto in Findings 514-16 and that constitute Board Exs. 83-85. (Stip. 329)

518. In taking the actions described in Findings 502 through 517, theExecutive Branch and the Department of Education did not give heed to theUnited States Consent Decree obligations, nor did they informcongressional staff of those obligations. (Chambers Dep. 59, 69, 72-79,91, 107-08, 111-14, 147-48; Christensen testimony)In taking those actions, the Executive Branch and the Department ofEducation actively supported and sought passage of legislationspecifically designed to render funds unavailable to Board. It is a policyand priority of the Executive Branch and the Department of Education tomake all funds appropriated to the Department unavailable to Board forimplementing its Plan and to oppose specific congressional appropriationsof funds to be used to comply with the Consent Decree. Moreover, it hasbeen and continues to be the policy of the Executive Branch to deny fundsto Chicago for desegregation implementation.

The United States Non-Compliance With Section 15.1

601. Since this Court issued Opinion II on June 30, 1983 and the Courtof Appeals decided the appeal from Opinion II on September 9, 1983, ithas been a policy of the Executive Branch of the United States, includingthe Department of Education, to disable itself from complying (a) withOpinion II and subsequent orders and (b) with the Court of Appeals'opinion, and to deny funding to Board for desegregation implementation.Those actions constitute more than a failure to "make every good faitheffort" to meet the United States Consent Decree obligation. Rather theUnited States has actively and willfully ignored the orders of this Courtand the Court of Appeals and has continued its bad faith efforts to evadeand undermine its obligations under Section 15.1, by engaging in conductintended specifically to render existing and future sources of fundsunavailable for desegregation assistance to Board. These findings arecompelled by the earlier Findings and by the later Findings in thissection.

602. As early as the filing of its July 15, 1983 Report, the UnitedStates clearly indicated that despite its previously adjudicatedliability it had no intention of altering its prior course of bad faithconduct. That Report was supposed to discuss the specific steps to beincluded in the United States program of compliance with Opinion II.Instead the United States simply reiterated its prior position it wouldnot treat any funds over which Secretary had control as "available," norwould it seek legislative or other action to render other funds availableto Board. That Report alone reflected continuing bad faith on the part ofthe United States, as well as a willful violation of the Consent Decreeand Orders of this Court.

603. Following the Court of Appeals September 9, 1983 vacation of thisCourt's previously-ordered remedies, explicitly stated by the Court ofAppeals as intended to give the United States an opportunity to "fashionits own proposed remedy," the United States submitted the "Plan of theUnited States for Supporting the Desegregation Plan of Board of Educationof the City of Chicago." That Plan, filed November 10, 1983, sets forthall the actions the United States intends to take in school year 1983-84and for the duration of the Consent Decree to comply with its obligationsunder Section 15.1. (Stip. 331-32) Although purporting to satisfy theSeventh Circuit's mandate, the Plan asserted the United States had nofurther obligations for fiscal year 1983, or for future fiscal years,beyond the $20 million that had been appropriated by Congress as part ofa continuing joint resolution covering a number of needed fundingappropriations (after the President had vetoed an earlier free-standingprovision sponsored by Representative Yates that would have budgeted fundsonly for Board and its Plan). Indeed the United States "Plan" containedno suggestions for remedying the United States past violations or formeeting its present and future obligations under the Consent Decree, butinstead it presented both old and new excuses for the failure to takesuch actions. It reiterated arguments that had previously been rejectedby this Court and the Court of Appeals. Rather than the United Statesavailing itself of the opportunity presented by the Court of Appeals oracting in good faith pursuant to the Consent Decree, its "Plan" and itsactions taken (and not taken) pursuant to its provisions constitute badfaith conduct of the United States. Both the Plan and such action andinactionalso constitute willful violations of the Consent Decree and orders ofthis Court and the Court of Appeals.

604. Although the United States received the original version of BoardEx. 28 on or about September 16, 1983, that extensive document was notreviewed by any officials of the Department of Education, other thancounsel, until approximately March 1, 1984 — when these hearingsforced such a review. (Stip. 301; Fagan testimony; Christensentestimony; Chambers Dep.)

605. All the conduct of the United States detailed under the caption"Actions by the United States Affecting the Availability of Funds"(Findings 439-67), including its promulgation of regulations andproposals of legislation intended to render funds unavailable to Board foruse in implementing the Plan, together with its prior failure and presentintention not to (a) provide Board with any of the presently orpreviously restrained funds, (b) seek re appropriation of any excess or"lapsing" funds, (c) seek to identify and provide any other availablefunds or (d) seek to render sufficient funds available throughappropriation requests and other legislative activities, constitutes bothbad faith conduct and willful violations of the Consent Decree and ordersof this Court and the Court of Appeals.

606. All the conduct of the United States detailed under the caption"Actions with Respect to the Yates and Weicker Bills" (Findings501-518), specifically designed to render presently available fundsunavailable, also constitutes both bad faith and willful violations ofthe Consent Decree and orders of this Court and the Court of Appeals.

607. All the conduct of the United States referred to in Findings401-606 was intentionally undertaken by, at the direction of, or with theknowledge of, Secretary of Education Terrel R. Bell, other policy levelofficials in the Department of Education (including Sally Christiansen,Gary Bauer, Hunter Harrison and Steven Winnick) and other Departments ofthe Executive Branch. Each of those officials was aware of the ConsentDecree and orders of this Court and the Court of Appeals when engaging inthat conduct.

608. In sum, despite prior findings and opinions of this Court and ofthe Seventh Circuit, the United States has shown no intention ofcomplying with Section 15.1 of the Consent Decree. It has refused to makeany serious effort to address its obligations and has persisted in itsefforts to ensure that funds adequate for financing the Plan areunavailable to Board.

609. All the actions of the United States since Opinion II (andparticularly since the Court of Appeals' September 9 opinion) wholly failto meet its obligation to "make every good faith effort" and constituteaffirmative bad faith conduct and willful violations of the ConsentDecree and orders of this Court and the Court of Appeals.

610. Careful review of the entire record demonstrates that Board hasproved the factual matters reflected in Findings 401 to 609 not only bythe required preponderance of the evidence, but also by clear andconvincing evidence.

CONCLUSIONS OF LAW ("Conclusions")

Law of the Case

[1, 2] 1. "Law of the Case" has two aspects:

(a) Courts will not normally reexamine their own decisions made at prior stages of the same proceedings, absent special circumstances such as a change in the relevant law since the last decision, the development of new and compelling evidence or "manifest injustice." This aspect of the doctrine is a self-imposed (hence non-binding) prudential limitation. See 1B Moore's Federal Practice ¶ 0.404[4.-1].

(b) Lower courts must comply with the mandates, and apply the decisions, of reviewing courts on remand. Gertz v. Robert Welch, Inc., 680 F.2d 527, 532 (7th Cir. 1982). "Decisions" of a reviewing court include any issues decided by that court explicitly or by necessary inference, Doe v. New York City Department of Social Services, 709 F.2d 782, 788 (2d Cir. 1983); E.E.O.C v. International Longshoremen's Association, 623 F.2d 1054, 1058 (5th Cir. 1980).

[3] 2. Where there are alternative factual or legal grounds for aDistrict Court decision, and the Court of Appeals considers only one, theother grounds are not deemed "decided" (accepted or rejected byimplication) for purposes of the second branch of law of the case. Thosealternative grounds do remain the law of the case in the District Courtunder the first branch of the doctrine. See, e.g., Munoz v. County ofImperial, 667 F.2d 811, 817 (9th Cir. 1982); Johnson v. Board ofEducation of the City of Chicago, 664 F.2d 1069 (7th Cir. 1981),vacated, 457 U.S. 52, 102 S.Ct. 2223, 72 L.Ed.2d 668 (1982); 1B Moore's¶ 0.404 [4.-3].

[4] 3. Because the following propositions were finally and explicitlydecided by our Court of Appeals, under the mandate aspect of the law ofthe case, they are not subject to reexamination by this Court:

(a) Section 15.1 imposes a substantial obligation on the United States to provide available funds to Board (717 F.2d at 383).

(b) The United States demonstrated a lack of good faith, violating its obligation to Board under Section 15.1, by failing to provide Board with funds it had available for use by Board (id.).15.

(c) Temporarily freezing the obligation or expenditure of available funds pending the outcome of these proceedings was necessary to protect Board's interest by preserving the status quo, and was not an abuse of discretion (id. at 385).

[5] 4. This Court's finding that Board has made every good faith effortto find and provide every available form of financial resources was notchallenged on appeal (id. at 380 n. 1) and also must be consideredconclusively decided. Raxton Corp. v. Anania Associates, Inc.,668 F.2d 622, 624 (1st Cir. 1982). Even were that not so, these Findingsand Conclusions have reconfirmed Board's compliance.

5. Several other issues must be deemed conclusively decided byimplication as a result of our Court of Appeals' decision:

(a) The Government argued extensively on appeal that the approximately $90 million it had provided to Board under Chapters I and II of the ECIA satisfied its obligation. By accepting that Board had made every good faith effort to find and provide funds for the Plan and nevertheless concluding that the United States had violated its obligation, the Court of Appeals implicitly rejected that argument.

(b) This Court's basic understanding and analysis of the obligations contained in Section 15.1 was at least implicitly approved when employed by the Court of Appeals. Both this Court and that Court undertook an examination of whether funds were available to the Executive Branch that could have been provided to Board had the United States used good faith efforts. Implicit in this examination was an understanding that the United States had an obligation that was not dependent on Board's having exhausted all of its available resources, and that was not dependent on Board's being unable to finance the Plan. By finding a Consent Decree violation while vacating conclusions concerning the cost of the Plan, Board's resources and its need for additional financing, the Court of Appeals necessarily concluded that the failure to provide available funds was a violation independently of whether additional financing was needed or whether Board could theoretically provide it.

[6] 6. Opinion III contains no explicit or implicitdetermination or rejection of the propriety of thisCourt's detailed exposition (in Opinion II App.A Par.1, 567 F. Supp. at 286-88) of the United Statesobligations under Section 15.1, including, wherenecessary, legislative initiatives. Also none of theparticular remedial obligations of the United Statesdefined by this Court (id. Par. 2, 567 F. Supp. at 288)were rejected or considered by Opinion III other than aspremature. Rather our Court of Appeals vacated theremedial portions of this Court's Order on thealternative and independent grounds that the UnitedStates should be given an opportunity voluntarily "tofashion its proposed remedy for past noncompliance, aswell as a chance to show that it intends to comply inthe future. . . ." Through the United States has nowbeen given ample opportunity, it has failed —really refused — to propose even a remotelyacceptable "remedy" (Finding 603). To the extent theUnited States is now in a position identical to itsearlier position, except for having been given anappropriate opportunity to comply voluntarily with itsobligation and having failed and refused to do so, thisCourt's earlier conclusions as to the scope of theobligations contained in Section 15.1 and the nature ofthe United States remedial obligations remain valid. Tothat extent, those conclusions are the law of the case.

7. In particular this Court has reviewed each of itsOpinion II Findings of Fact and "Conclusions of Law. Thatportion of Conclusion 4 that found Section 15.1unambiguous was a "harmless error" (717 F.2d at 382),and this Court's Findings and Conclusions as to theamount adequate for implementation of the Plan and theremedial obligations of the United States were vacatedas premature. With those exceptions, each of the OpinionII Findings and Conclusions remains the law of thecase. Moreover, now that the remedial issues are nolonger premature, the Conclusions concerning remediesare also law of the case.

8. Many of the Opinion II Findings and Conclusions arefirst-branch (prudential) law of the case. Thus thisCourt is not barred from re-examining such earlierdeterminations, particularly those with regard to thescope of the obligations contained in Section 15.1 andthe nature of the United States remedial obligations.Considering the importance of the issues presented inthis case, the presentation of further extensiveevidence and certain legislative developments discussedbelow, this Court has re-examined each of its Opinion IIFindings and Conclusions, as well as its contemporaneousOrder. Upon examination of the additional evidence andlegislative developments, this Court concludes there areno compelling circumstances requiring suchreconsideration. Nonetheless, in the interest ofgenerating a self-contained document, new Findings andConclusions concerning many of the same issues have beenpresented in this opinion. That does not mean any failureto restate all the prior Findings and Conclusions shouldbe taken as a disavowal. To the contrary, each priorFinding and Conclusion, except to the extentinconsistent with these Findings and Conclusions,remains the opinion of this Court.

9. Two primary issues were not previously decided andwere the focus of the hearings beginning March 19,1984:

(a) "the level of funding adequate for full implementation of the Plan" (Order ¶ 6, 567 F. Supp. at 290); and

(b) the present remedial obligations of the United States (see 717 F.2d at 385 n. 12).

Standards for Determining the Amount of Funding "Adequate for Implementation of the Plan"

10. Much of the ground traveled by courts attempting to determine andallocate the total cost of desegregation plans "in more typicaldesegregation cases has already been covered by the parties and thisCourt in this case. In particular, the following critical conclusionshave previously been established:

(a) Board's obligation is explicitly defined by the Consent Decree: to develop and and implement a system-wide plan to remedy the effects of past segregation (Consent Decree § 1).

(b) Thereafter the Consent Decree explicitly describes the nature of the Plan, and particularly the Educational Components, necessary to meet that obligation.

(c) Board's Plan has already been approved by this Court (Opinion I, 554 F. Supp. 912)) and enthusiastically endorsed by the United States.

(d) As discussed throughout these Conclusions, the Consent Decree itself explicitly allocates the funding responsibilities of the parties.

[7] 11. In any determination and allocation of the appropriate level offunding for a desegregation plan, the costs of programs that "materiallyaid the success of the overall desegregation effort" are properlyincluded. Arthur v. Nyquist, 712 F.2d 809, 813 (2d Cir. 1983), cert.denied sub nom. Griffin v. Board of Education, — U.S. —, 104S.Ct. 1907, 80 L.Ed.2d 456 (1984); Liddell v. Missouri, 731 F.2d 1294,1316 (8th Cir. 1984) ("Liddell III"). That involves drawing a line thatexcludes the mere discharge of a school board's "general educationalresponsibilities," a line that "inevitably blurs," Arthur, 712 F.2d at813. In striking a balance, a district court should give "considerabledeference to the good faith representations of the school authorities."Id.; Liddell III, 731 F.2d at 1316. Such discretion normally afforded alocal board is particularly appropriate in the circumstances presented inthis case because:

(a) Section 3.1 provides Board shall have substantial discretion in the development of the Plan, particularly the Educational Components.

(b) Board has consistently demonstrated its good faith throughout the past four years of litigation, Plan development and implementation (Opinion II Findings 2, 3, 567 F. Supp. at 274).

[8,9] 12. It is of course proper for the United States to seek toassure that Board does not abuse its discretion by including in the Planany educational programs that are not properly linked to desegregation(as Arthur 712 F.2d at 813 put it, they are "a means of upgrading aneducational system in ways only remotely related to desegregation"). Inthe circumstances of this case, Arthur and Liddell teach the properstandard for determining whether the cost of any given program isappropriately included in the amount "adequate for implementation of thePlan" is whether the program is a reasonable exercise of Board'sdiscretion to adopt programs that materially aid the implementation ofthe Plan developed pursuant to the Consent Decree and approved by theUnited States and this Court. Absolute dollar precision is not requiredwhen determining the costs of a desegregation plan, particularly when (ashere) the local board has been acting in good faith. Arthur 712 F.2d at814-15.

13. By its agreement in Section 15.1 to attempt to provide financialresources "adequate for implementation of the desegregation plan," theUnited States clearly agreed to help pay for the Plan that was requiredby, and has since been developed and implemented pursuant to, the ConsentDecree. That agreement includes helping to pay for a plan (like thecurrent one) that includes educational components in magnet schools(Section 4.12), in desegregated schools (Section 10.1 and 10.4) andparticularly in racially isolated schools (Section 2), including thefollowing items outlined in Section 7:

7.1 Remedial and compensatory educational programs.

7.2 Improved curricula and instructional and evaluative techniques (including the utilization of tests that validly measure student achievement) for academic, vocational and alternative educational studies,

7.3 Preservice and inservice instruction for administrators, principals, teachers and other school personnel.

7.4 Selection, and evaluation of the performance of, principals and supporting leadership staff.

7.5 Testing, counseling, guidance and student welfare.

7.6 Physical facilities, safety and security.

7.7 Supportive relationships between such schools and groups and institutions in the community and in government.

14. Section 15.3 states:

The parties recognize that financial cost of implementation does not excuse the failure to develop a desegregation plan consistent with the principles set forth in §§ 2-14, and is not a basis for postponement, cancellation or curtailment of implementation of the plan after it has been finally adopted, but is one legitimate consideration of practicability in meeting the objective stated in § 2.1.

That provision makes plain the financial responsibilities of the partiesunder Section 15.1 were to apply fully to the Educational Componentsdescribed in various sections of the Consent Decree. As for the lastclause, that specifically allows affordability to be considered inmeeting the Student Assignment objective of the Consent Decree (Section2.1). Indeed, its use of the singular form "objective" in referring toSection 2.1 reinforces the normal reading that the same clause does notapply to the other objectives stated in Section 2, including particularlySection 2.2 relating to the Educational Components. If any furtherconfirmation were required, Section 7 of the Consent Decree contains aspecific reference to "the objective [again used in the singular] statedin Sec. 2.2" — demonstrating once again the Consent Decree'sdraftsmen were meticulous in their distinctions and cross-references.Thus the Consent Decree's clear and unambiguous language requires noresort to extrinsic evidence on this score.

15. Section 15.3 therefore does not allow consideration ofaffordability as to development of a plan containing educationalcomponents consistent with the principles set forth in Section 2.2.Affordability is a legitimate consideration of practicability only withrespect to Section 2.1, which requires that the Plan seek to establishthe greatest "practicable" number of stably desegregated schools. Butthat is really not critical. Even were it otherwise, to the extentaffordability may realistically limit the type of plan that can bedeveloped and implemented, it does not qualify the obligation of theUnited States any more than it qualifies Board's obligation. Both areobligated by Section 15.1 to attempt to share the costs of programs thatit is determined will materially aid in implementing the Plan.

16. In response to the Arthur-Liddell analysis, the United Statesoffers far more crabbed approaches:

(a) One is a "but for" test, which would exclude programs from a desegregation remedy unless such programs are so unique to desegregation that they would never otherwise have been adopted. Such a test not only conflicts with the "materially aid" standard but would place an unfair and unrealistic burden on the Board. Liddell III, 731 F.2d at 1315; Arthur, 712 F.2d at 813. Such a "but for" principle would fail to recognize the wide-ranging list of both student assignment and educational programs and methods agreed to in Sections 4 and 7. It would ignore the reality of Board's careful desegregation planning, through which the programs constituting the Plan were formulated, and the United States wholehearted approval of the Plan.

(b) As a second line of defense the United States urges an "incremental cost" test, which would exclude programs from a desegregation remedy merely because they are desegregation programs initially adopted by Board before the Consent Decree. That would be an insupportable and artificial limitation. Such programs (Finding 304 (a)) are generally voluntary transfer programs and magnet schools and programs — basic elements of the Student Assignment Plan. It would be illogical for Board to be required to discontinue these programs or not to count them as part of Board's desegregation expenditures. Had the parties wished to exclude pre-existing desegregation programs from the desegregation plan referred to in the Consent Decree, they could have easily done so. They did not.

This Court finds the United States proposals unacceptable and adheres tothe Arthur-Liddell standards.

Standards for Determining the Share the United States is Obligated ToAttempt To Provide of the Amount "Adequate for Implementation of thePlan"

17. Section 15.1 by its terms is addressed equally to both parties andcreates a mutual obligation to attempt to find and provide the totalamount of financing adequate for the Plan. It says "each party" is toaddress the search and provision of funds "adequate for implementation ofthe desegregation plan," a phrase that applies to the total amount offinancing necessary — not some severable proportion of that totalamount.

18. Circumstances surrounding entry of the Consent Decree furtherdemonstrate a mutual obligation, not a divisible one, was contemplated.Its history reveals the parties had a common and overriding goal ofassuring that an effective desegregation plan was developed andimplemented in Chicago (see Findings 104, 108-10 and extrinsic evidencediscussed in Opinion II Conclusion 4, 567 F. Supp. at 282). That jointpurpose was reflected in Section 15.1, where each party agreed to doeverything possible to find the necessary financing. As stated in Finding108, the Decree "represents the only instance in which a major urbanschool system has agreed, without any litigation or determination ofliability issues, to develop and implement a system wide desegregationplan under court supervision". That Decree contemplated, and the Plan hasmanifested, the extensive use of expensive compensatory educationalremedies to alleviate the effects of past discrimination. In 1980, asnow, Board was faced with massive financial deficits, and the jointfunding provision of the Consent Decree also reflected recognition thatBoard's finances were such that it could not voluntarily agree todevelop, or successfully implement, an effective desegregation plan ofthis type unless the federal government agreed to share the financialburdens.

[10] 19. Because they are in fact contracts (with the added imprimaturof court approval), consent decrees are construed according to preceptsof contract construction. Opinion III, 717 F.2d at 382 and cases cited.Board engages in extensive legal analysis to urge on this Court theapplicability of contract principles, based on the law of joint andseveral obligations or the law of joint ventures. Those concepts are ofcourse born of somewhat different relationships than are involved here,though the United States does not really counter Board's arguments withcogent analysis. But it is not necessary to decide the questions here asthough they involved strict joint and several liability or a jointventure in the classic sense. As Finding 110 makes plain, whether Section15.1 is looked at in its literal terms — which do not specificallylimit the amount of the United States financial commitment — orwhether some notion of reasonable expectations is applied to thatcommitment, there can be no question the United States undertaking isbroad enough to embrace the amount represented by Board's current request(as modified by this opinion).

[11] 20. Some light is also cast by the equitable principles that guidethe fashioning and effectuating of desegregation decrees. Milliken v.Bradley, 433 U.S. 267, 97 S.Ct. 2749, 53 L.Ed.2d 745 (1977). In thatrespect, allocating the costs of a desegregation plan is part of theremedial power of a district court, United States v. Board of SchoolCommissioners of Indianapolis, 677 F.2d 1185, 1186 (7th Cir.), cert.denied, 459 U.S. 1086, 103 S.Ct. 568, 74 L.Ed.2d 931 (1982)("Indianapolis School Board"). Courts have frequentlyallocated such costs equally between two responsible parties. Bradley v.Milliken, 402 F. Supp. 1096 (E.D.Mich. 1975), aff'd, 540 F.2d 229 (6thCir. 1976), aff'd, 433 U.S. 267, 97 S.Ct. 2749, 53 L.Ed.2d 745 (1977)("Milliken II"); Indianapolis School Board, 677 F.2d at 1188. And courtshave frequently considered the ability of the parties to providefinancing for the plans. Milliken II, 540 F.2d at 246; Liddell v. Boardof Education of the City of St. Louis, 491 F. Supp. 351, 357 (E.D.Mo.1980), aff'd and remanded 667 F.2d 643 (8th Cir.), cert. denied,454 U.S. 1081, 1091, 102 S.Ct. 634, 656, 70 L.Ed.2d 614, 629 (1981).

21. Though the parallel is of course not complete, those equitableapproaches tend to fortify the determination reached in Conclusion 19:

(a) In those cases as in this one, the parties share responsibility for financing the Plan, although the present case rests on a contractual obligation rather than (as in those cases) one arising in tort law.

(b) Similar equitable factors, such as ability to pay, are present in this case as in those.

(c) This Court's equitable remedial powers are invoked by the need to remedy the United States persistent violations of its financial obligations.

Consideration of Funding Contentions of the United States

22. Extrinsic evidence as to the events that led to the inclusion ofSection 15.1 in the Consent Decree (Findings 103-10) demonstrates theUnited States obligation was not limited or qualified by the priorexistence or funding levels of ESAA. Instead Section 15.1 established ageneral obligation on the part of both parties, to be "interpreted andapplied as appropriate in whatever future, circumstances might arise"(Finding 110).

23. This is the first occasion on which the parties and this Court haveaddressed the amount "adequate for implementation of the DesegregationPlan" (Section 15.1). As already stated, that determination is whetherthe programs under consideration materially aid the success of the Plan.There is no estoppel against Board arising from any earlier statementspredicated on the limited funds then currently available to it.

[12] 24. Board is not required to exhaust all its available resourcesfor implementation of the Plan before the United States becomes obligatedto find and provide resources for the Plan (Opinion II Conclusion 7, 567F. Supp. at 283). Although Board has substantial general revenues (fromlocal taxes and from general state aid, including State Title I aid), andthose funds are not precluded by State law from being used fordesegregation expenses, Board is not obligated to destroy the basiceducational function of the school system by diverting funds needed andused for such purposes. Nor is Board required, as the United Statessuggests, always to divert any further increment of such general revenuesfrom other educational programs to pay Plan costs. Such a standard— forcing the robbing of Peter to pay Paul — would render theUnited States financial obligations meaningless.

25. United States argues if a program is "necessary" for the Plan, thenBoard has an obligation to shift funds from its general resources to payfor the program, and if Board does not do so, then by definition theprogram has been shown not to be "necessary." In either event, theasserted result is that the United States does not have to pay for theitem. Like others of the United States contentions, that one is legallybankrupt. Of course, a program may materially aid success of the Plan, orbe necessary for the Plan, even though Board has not had funds availableto be diverted from its basic educational system to pay for the program.

26. Board is not "master of its own fate" and depends on substantialgeneral state and federal revenues to meet all its obligations. RequiringBoard to consider all general state and federal revenues received by itas "available" for funding thePlan must be rejected, for it would require Board to superimpose afinanced Plan on a devastated school system. See, Milliken II, 540 F.2dat 245-51. Any successful desegregation program, especially onecontaining educational components, presupposes a functioning basiceducational system. Courts that have apportioned costs between local andstate defendants have taken care to ensure there is no diminution in thequality of education or in the allocation of existing state revenues— even state revenues that are for compensatory education. Berryv. School District of the City of Benton Harbor, 515 F. Supp. 344, 386-88(W.D.Mich. 1981), aff'd and remanded, 698 F.2d 813 (6th Cir.), cert.denied, — U.S. —, —, 104 S.Ct. 235, 236, 78 L.Ed.2d 227(1983).

27. General funds received from either the State of Illinois or thefederal government must be considered part of Board's general revenues.Any expenditure of such funds for implementation of the Plan must beconsidered part of Board's contribution to financing the Plan. SeeLiddell v. Board of Education of the City of St. Louis, 677 F.2d 626, 631(8th Cir.), cert. denied, 459 U.S. 877, 103 S.Ct. 172, 74 L.Ed.2d 142(1982).

28. Board received federal assistance before the Consent Decree, andcontinues to receive such assistance today, under various federal fundingprograms unrelated to desegregation. Together those encompass thecategorical federal educational assistance that is available to allschool districts in the United States, including Board, for essentialeducational programs, not for funding the incremental costs ofdesegregation plans. Those funds have been and continue to be received byBoard on the basis of criteria that are unrelated to and do not take intoaccount either the Consent Decree or the costs of implementing the Plan.

29. Increases in general federal funding since September 1980, receivedby Board for purposes other than desegregation, neither eliminate norderogate from the United States obligation under Section 15.1. Neitherparty contemplated at the time of the Decree that federal ECIA Chapter Ifunds would be used to fulfill the Section 15.1 obligations of the UnitedStates (Finding 357). Moreover, Board certainly did not agree to developand implement a costly plan in exchange for the same level of federalfunding it would have received even had it not entered into the ConsentDecree or implemented a desegregation plan. Finally, the Court of Appealshas already implicitly rejected such a contention (Conclusion 5(a)).

30. Other United States contentions that its obligations under Section15.1 are somehow satisfied or eliminated by other federal funding areequally untenable. It is unnecessary (as Board has done in its proposedConclusions of Law) to dwell on the subject at length, for Findings350-68, Addendum A to Findings 301-76 and the application of ordinarycommon sense demonstrate conclusively the poverty of the United Statesposition.

31. Section 15.1 imposes the same "good faith" standard on both Boardand the United States. Board has been complying with that standard whilethe United States has not. That total disparity of performance reflectsthe height of irony in light of the fact Board and the United States havesuch differing abilities to find and provide funds and such differingcompeting obligations.

32. In Section 15.1 the United States made a firm commitment — itsigned a contract — to make "every good faith effort to find andprovide every available form of financial resources adequate forimplementation of the Plan." No "intended grantee" has a comparable claimto action on the part of the United States. No number or form ofExecutive Branch "policy" decisions, "representations" or subsequent"commitments" can undo, override or diminish this contractual promise toBoard — a promise that has the extra force of embodiment in aconsent decree.

33. In a sense the United States various agreements as to funding,dealt with in the foregoing conclusions, are variants onits most fundamental one: Its Section 15.1 promise is meaningless andunenforceable, because it can define "every available form of financialresources" as wholly empty by deliberately making all financial resourcesunavailable. No court is required to accept that distortion of contractlaw from any contracting party, whether sovereign or private litigant.

34. Had the United States not so ignored and subverted its obligationunder the Consent Decree, it would have retained substantially greaterdiscretion within the bounds of its commitment than it now portraysitself as possessing. Section 15.1 contemplated both (a) that the UnitedStates would have discretion as to "how" it would meet its obligation and(b) that it was not required to go beyond "every good faith effort," evenif the full result desired was not obtained through such efforts. See,Western Geophysical Co. v. Bolt Associates, Inc., 584 F.2d 1164, 1171 (2dCir. 1978).

35. Though the United States complains it is not being treatedequally, it is in fact only now beginning to be treated equally. To theextent the United States present obligations may appear to be differentthan Board's, it is not because the standard being applied to the UnitedStates is any different from that applicable to Board. Rather it isbecause (a) the United States has so egregiously violated that standardand (b) the very nature and identity of the parties makes theirrespective abilities "to find and provide every available form offinancial resources" so very different.

Propriety of the Programs Proposed by Board for Implementation of the Plan, and Summary as to the Amount of United States Obligation

[13] 36. Most of the programs for which Board now seeks funding aredesigned to implement the Educational Components portion of the Plan. Incircumstances like those present in Chicago (see Findings 145-61),educational components are a critical part of a constitutionaldesegregation plan. Milliken II; Liddell III. Detrimental effects ofyears of segregation are not cured merely by busing students to createintegrated schools, Milliken II, 433 U.S. at 283, 97 S.Ct. at 2758.Instead a desegregation plan must include the additional programsnecessary to provide equal educational opportunity to all students. See,Kelley v. Metropolitan County Board, 492 F. Supp. 167, 188 (M.D.Tenn.1980); Tasby v. Estes, 412 F. Supp. 1192, 1195, 1210-11 (N.D.Tex. 1976),rev'd and remanded on other grounds, 572 F.2d 1010 (5th Cir. 1978).

37. Courts have repeatedly considered and approved the same types ofeducational components contemplated by the Consent Decree, and the sametypes of implementation programs for which Board now seeks funding:

(a) Effective Schools Project. See, Liddell III, 731 F.2d at 1314; Berry, 515 F. Supp. at 369; Kelley v. Metropolitan County Board, 511 F. Supp. 1363, 1368-70 (M.D.Tenn. 1981), aff'd in part, rev'd in part on other grounds, 687 F.2d 814 (6th Cir. 1982), cert. denied, 459 U.S. 1183, 103 S.Ct. 834, 74 L.Ed.2d 1027 (1983); Indianapolis School Board, 506 F. Supp. [657] at 673; Tasby, 412 F. Supp. at 1217; Milliken II, 402 F. Supp. at 1143-44; United States v. Texas, 342 F. Supp. 24, 30, 33-34 (E.D.Tex. 1971), aff'd, 466 F.2d 518 (5th Cir. 1972).

(b) Trainers Institute/Staff Development, See, Evans v. Buchanan, 582 F.2d 750, 770-71 (3d Cir. 1978) (en banc), cert. denied, 446 U.S. 923, 100 S.Ct. 1862, 64 L.Ed.2d 278 (1980); Kelley, 511 F. Supp. at 1371; Indianapolis School Board, 506 F. Supp. at 672; Tasby, 412 F. Supp. at 1207, 1220; Milliken II, 402 F. Supp. at 1139; United States v. Texas, 342 F. Supp. at 34-35.

(c) Management Information System/Equity Compliance. See, Liddell III, 731 F.2d at 1317; Milliken II, 402 F. Supp. at 1119, 1145; Berry, 515 F. Supp. at 382-84; Indianapolis School Board, 506 F. Supp. at 673; Tasby, 412 F. Supp. at 1206, 1220-21; Morgan v. Kerrigan, 401 F. Supp. 216, 248-49, 268-69 (D.Mass. 1975), aff'd, 530 F.2d 401 (1st Cir.), cert. denied, 426 U.S. 935, 96 S.Ct. 2648, 49 L.Ed.2d 386 (1976).

(d) Affirmative Action. See, Berry, 515 F. Supp. at 376; Tasby, 412 F. Supp. at 1219-20; United States v. Texas, 342 F. Supp. at 30; Redman v. Terrebonne Parish School Board; 293 F. Supp. 376, 380 (E.D.La. 1967); Hill v. Lafourche Parish School Board, 291 F. Supp. 819, 823 (E.D.La. 1967).

(e) Within — School Segregation. See, United States v. Texas, 342 F. Supp. at 34. (See also Consent Decree, Part III)

(f) Magnet Schools. See, Liddell III 731 F.2d at 1310; Berry, 515 F. Supp. at 365-66; Kelley, 511 F. Supp. at 1370; Reed v. Rhodes, 455 F. Supp. 569, 599-600 (N.D.Ohio 1978); Milliken II, 402 F. Supp. at 1146-47; Morgan, 401 F. Supp. at 235, 246-47.

(g) Special Education/Testing. See, Tasby, 412 F. Supp. at 1217; Morgan, 401 F. Supp. at 252; United States v. Texas, 342 F. Supp. at 36.

(h) Vocational/Technical Education. See, Milliken II, 402 F. Supp. at 1118, 1140-41; Reed, 455 F. Supp. at 599.

(i) Curriculum and Instruction. See, Evans, 582 F.2d at 771; Berry, 515 F. Supp. at 373-74; Indianapolis School Board, 506 F. Supp. at 672; Morgan, 401 F. Supp. at 234; Milliken II, 402 F. Supp. at 1118, 1143-44; United States v. Texas, 342 F. Supp. at 30-34.

(j) Student Discipline. See, Evans, 582 F.2d at 771-72; Milliken II, 540 F.2d at 250; Berry, 515 F. Supp. at 379-81; Indianapolis School Board; 506 F. Supp. at 672; Reed, 455 F. Supp. at 601-02; Tasby, 412 F. Supp. at 1219.

(k) Bilingual Education. See, Milliken II, 402 F. Supp. at 1144; Tasby, 412 F. Supp. at 1217; Morgan, 401 F. Supp. at 252; United States v. Texas, 342 F. Supp. at 30-34.

(l) Evaluation. See, Liddell III, 731 F.2d at 1317; United States v. Texas, 342 F. Supp. at 38.

[14] 38. In light of Findings 201-72 and the authorities cited inConclusions 36 and 37, each of the programs Board proposes forimplementing the Plan (except as stated in Findings 243, 250 and 253)properly provides the desegregation remedy required by the ConsentDecree, "materially aids the success of the overall desegregationeffort," and indeed is necessary for full implementation of the Plan.Accordingly the cost of each such program is properly included in thetotal amount "adequate for implementation of the desegregation plan"within the meaning of Section 15.1. As reflected by Finding 265, thetotal amount adequate for implementation of the Plan for school year1984-85 is thus $171.631 million, and the share of that amount the UnitedStates is obligated to make every good faith effort to find and providepursuant to Section 15.1 is $103.858 million.

Verification of the Current Availability of Funds

Opinion III, 717 F.2d at 383 n. 8 directed this Court to verify theavailability of certain funds, appropriated to the Department ofEducation, to be provided to Board for implementation of the Plan. ThisCourt has now had the opportunity (see Opinion II, Conclusion 11, 567 F.Supp. at 284) to examine extensively the availability of both 1983 and1984 appropriations (for which the relevant statutes and regulations arenearly identical) and to reconsider the contentions of the United Stateswith respect to the availability of those funds. This Court herebyverifies the availability of funds in the following conclusions.16.

[15] 39. Funds are "available" to the United States within the meaningof the Consent Decree where Congress has appropriated them to theExecutive Branch for purposes consistent with financing Board'sdesegregation activities. To the extent Congress has given the Departmentof Education discretion to provide particular funds to Board, the ConsentDecree requires that the Executive Branch consider these funds"available." Furthermore, to the extent consistent with its statutoryauthority, the Executive Branch is required to interpret and conform itsexisting program regulations to meet its financial obligation to theBoard under Section 15.1. Citizens for a Better Government v. Gorsuch,718 F.2d 1117 (D.C.Cir. 1983); Gautreaux v. Pierce, 690 F.2d 616 (7thCir. 1982); Ferrell v. Pierce, 560 F. Supp. 1344 (N.D.Ill. 1983).

40. As the following Conclusions reflect, fiscal year 1983 funds andfiscal year 1984 funds were and currently are available to the UnitedStates, within the meaning of Section 15.1, to assist Board in financingthe Plan. This is wholly apart from, and in spite of, the efforts of theUnited States to render funds unavailable — a matter dealt with inlater Conclusions.

41. In fiscal years 1983 and 1984 Secretary was authorized todistribute direct grants through Title IV of the Civil Rights Act of1964, 42 U.S.C. § 2000c, 2000c-4; Pub.L. 97-35, Title V, § 509,95 Stat. 443 (1981). As stated in Finding 402, Secretary administrativelyallocated $24 million to the Title IV program in each of those years.

42. In fiscal years 1983 and 1984 Secretary was authorized to grant allor any part of those Title IV monies directly to local educationalagencies to finance the desegregation activities specified in42 U.S.C. § 2000c-4. In those years Board was implementing a courtapproved desegregation plan and qualified as a local educational agencyeligible to receive direct Title IV race and national origindesegregation assistance. 42 U.S.C. § 2000c-4; 34 C.F.R. § 270.04,270.06.

43. Secretary is authorized by the Title IV enabling statute, andpermitted under his Title IV regulations (34 C.F.R. § 270.-72), toprovide Title IV assistance for:

(a) training and advisory programs designed to provide, develop or disseminate the information and skills necessary effectively to implement a desegregation plan (including particularly the educational components of Board's Plan);

(b) any training, staff development or advisory programs that are related to and materially assist in implementing a desegregation plan; and

(c) inservice training and advisory programs in connection with special educational programs designed to raise minority pupils academic achievement, where the educational programs are required remedial components in a court approved desegregation plan and are supplemental to preexisting compensatory educational or basic skills development services provided by a school district.

44. Inservice training and staff development components of thefollowing programs designed to implement the Plan's EducationalComponents meet all applicable Title IV statutory and regulatory criteriaand are activities eligible for direct Title IV race or national origindesegregation assistance:

(a) Effective Schools Program

(b) Racially Identifiable Schools Program

(c) Trainers Institute

(d) OEEO system wide Staff Development Program for Racially Identifiable Schools

(e) OEEO system wide Staff Development Program for Desegregated Schools

(f) Magnet Schools Expansion Program

(g) Magnet Schools Staff Development Program

(h) Special Education/Testing Program

(i) Vocational and Technical Education Program

(j) Curriculum and Instruction Program

(k) Student Discipline Program

(l) Bilingual Education program

(m) Evaluation program

45. Consultant and advisory components of the following programsdesigned to implement the Plan's Educational Components also meet allapplicable statutory and regulatory criteria and are activities eligiblefor direct Title IV race or national origin desegregation assistance:

(a) Effective Schools Program

(b) Racially Identifiable Schools Program

(c) Affirmative Action Program

(d) Equity Compliance Program

(e) Within-School Desegregation Program

(f) Magnet School Expansion Program

(g) Special Education/Testing Program

(h) Vocational and Technical Education Programs

(i) Curriculum and Instruction Program

(j) Student Discipline Program

(k) Bilingual Education Program

(l) Evaluation Program

46. Secretary's statutory authority to consider "such other factors ashe finds relevant" in making Title IV grant awards permits him toformulate additional selection criteria and, pursuant to such criteria,to establish classifications or priorities for allocating available TitleIV funds among otherwise eligible applicants, and to reserve or set asideTitle IV funds for particular eligible applicants. Title IV's statutoryprovision that Secretary "consider" other applications for funds does notsubsume his authority referred to in the preceding sentence to establishpriorities and to reserve or set aside funds for particular applicants.

47. Secretary has deliberately flouted the United States contractualobligations (one owed to no other eligible applicant for Title IV funds)"to find and provide every available form of financial resources" forimplementation of the Plan. To honor that obligation as he should have,Secretary was and is required to interpret, apply and, if necessary,modify his existing Title IV and Educational Department GeneralAdministrative Regulations ("EDGAR") to enable him to comply fully withthe United States financial commitment to Board under Section 15.1.

48. Secretary's EDGAR provisions apply to the Title IV program to theextent not expressly prohibited by Title IV's implementing regulations.Those implementing regulations, which permit Secretary to make Title IVgrants at any time and on an application-by-application basis, do notrequire that he award funds only after a "competition" among all eligibleapplicants for those funds. 34 C.F.R. § 270.74 (a).

49. EDGAR provisions requiring a competition among all applications fora program's available funds, including awards based in part upon a rankordering of all submitted applications, do not apply to grant awardsthrough Title IV, which may be made by Secretary at any time.34 C.F.R. § 270.02 (c) and (e), 270.74(a). Secretary's authority tocreate preferences and priorities permits him to reserve Title IV fundsfor one applicant and to award them without regard to any competitiveselection procedures otherwise specified in his Title IV or otherregulations.

50. Secretary's existing Title IV implementing regulations, whichpermit him to consider as award criteria (a) the availability of financialresources to a school district and (b) the nature and gravity of a schooldistrict's desegregation problems, allow him to consider the ConsentDecree in allocating Title IV funds among otherwise eligible applicants.

[16] 51. United States legal obligation under Section 15.1, and thepolicy determinations the Consent Decree embodies, constitute "relevantfactors" within the meaning of 42 U.S.C. § 2000c-4 (b), the EDGARprovisions and the Title IV implementing regulations. Thus Secretary isauthorized to reserve Title IV funds for Board, or otherwise to provideTitle IV funds to Board, in preference to other eligible applicants forthese funds.

[17] 52. All fiscal year 1984 funds allocated to the Title IV programare currently unobligated. No potential applicant, other than Board, hasany legal entitlement to those Title IV funds. To the extent (if any)such potential applicants could have asserted due process rights to"compete" under Secretary's regulations for available Title IV funds,Secretary could have obviated any such problem in fiscal years 1983 and1984 by publishing a notice in the Federal Register of Secretary'sprospective intention to reserve certain Title IV funds for Board pursuantto the United States Consent Decree obligation. 20 U.S.C. § 1232(b)(2)(A) and (B), 5 U.S.C. § 553 (d)(1) and (3). In any event,potential applicants for fiscal year 1984 Title IV funds have no dueprocess right to "compete" for these funds in light of Secretary'sannouncement to all applicants in the Federal Register that anyavailability of those funds for a 1984 grant competition is contingentupon the outcome of the present litigation. 48 Fed.Reg. 56254, 86255(Dec. 20, 1983).

53. In fiscal year 1983 Secretary was not legally obligated to providecontinuation awards to particular grantees, other than Board, from theTitle IV program. It was within Secretary's authority to decline tofinance continuation projects on the ground that, as a result of hisfinancial commitment to Board, there were no program funds "available"for continuation awards or that it was in the United States "bestinterest" to provide those funds to Board rather than to continuationprojects. 34 C.F.R. § 75.253 (a). Secretary is not legally required toprovide continuation awards of Title IV funds in fiscal year 1984.

54. Congress did not in fiscal year 1984 direct that Title IV fundscould not be made available to provide grants to local educationalagencies. Certain committee report language describes Secretary'sadministrative practice of providing Title IV grants to state educationalagencies and desegregation assistance centers. That language does notexpressly prohibit Secretary from providing Title IV grants directly tolocal educational agencies under the program authorized at42 U.S.C. § 2000c-4. It is insufficient to repeal Secretary'sstatutory authority to provide such grants to local educational agenciesor to operate as congressional ratification of Secretary's prior fundingpractices. TVA v. Hill, 437 U.S. 153, 189-93, 98 S.Ct. 2279, 2299-2301, 57L.Ed.2d 117 (1978); SEC v. Sloan, 436 U.S. 103, 117-19, 98 S.Ct. 1702,1711-12, 56 L.Ed.2d 148 (1978); Demby v. Schweicker, 671 F.2d 507, 512-13(D.C.Cir. 1981). See also Conclusion 63.

55. In sum as to Title IV funds, there were in fiscal year 1983 and arein fiscal year 1984 no statutory, regulatory or other legal constraintsthat would preclude Secretary from providing all or part of the $24million allocated to the Title IV subaccount to Board for implementingthe programs identified as eligible for direct Title IV assistance inConclusions 44 and 45. All remaining fiscal year 1983 Title IV funds andall fiscal year 1984 Title IV funds have been and currently are"available" to the United States within the meaning of Section 15.1.

56. In each of fiscal years 1983 and 1984 Congress appropriated$28,765,000 for the Secretary's Discretionary Fund, 20 U.S.C. § 3851.Secretary is required to use $10,725,000 of that amount annually to fundthe statutorily mandated programs specified in 20 U.S.C. § 3851 (b).Secretary was authorized in each year to spend the remaining $18,040,000reserved for the Secretary's Discretionary Fund for any of the purposesor programs specified in 20 U.S.C. § 3851 (a), including research anddemonstration projects related to the purposes of ECIA. Those purposesinclude assisting local educational agencies in implementingdesegregation plans, in meeting the needs of children in schoolsundergoing desegregation and in addressing educational problems caused byracial isolation in schools. 20 U.S.C. § 3851 (a)(2);20 U.S.C. § 3832 (3) and (7).

57. All programs and program elements making up Board's educationalcomponents are related to the purposes of ECIA, 20U.S.C. § 3832(3) and (7). Many of those programs could have beenfound by Secretary to qualify for discretionary funds under the plainmeaning of 20 U.S.C. § 3851 (a)(2) as demonstrating desegregationtechniques or educational remedies of national or general significance.

58. Secretary is also authorized through the Discretionary Fund toprovide grants to local educational agencies to assist them inimplementing programs under ECIA Chapter 2, including programs to assistlocal educational agencies in implementing desegregation plans, inmeeting the needs of children in schools undergoing desegregation and inaddressing educational problems caused by racial isolation.20 U.S.C. § 3851 (a)(4); 20 U.S.C. § 3832 (3) and (7). By itsplain and unambiguous language, 20 U.S.C. § 3851 (a)(4) authorizesSecretary to provide direct grants of discretionary funds to localeducational agencies to supplement activities or programs also eligiblefor financial assistance through the ECIA Chapter 2 state block grants,including 20 U.S.C. § 3832 (3) and (7). Nothing submitted by theUnited States has shown a clearly expressed legislative intent contraryto the plain statutory language. American Tobacco Co. v. Patterson,456 U.S. 63, 75, 102 S.Ct. 1534, 1540, 71 L.Ed.2d 748 (1982); ConsumerProduct Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1982); Pullman Standard v. ICC,705 F.2d 875, 879 (7th Cir. 1983).

59. All programs and program elements making up Board's educationalcomponents are authorized for funding under ECIA Chapter 2,20 U.S.C. § 3832 (3) and (7), and are eligible for financing througha direct grant of discretionary funds to Board under 20 U.S.C. § 3851(a)(4).

60. Secretary's proposed Discretionary Fund regulations, 49 Fed.Reg.7546 (February 29, 1984), state (a) discretionary funds may not be usedto meet "local needs" and (b) under 20 U.S.C. § 3851 (a)(4) Secretarymay only provide technical assistance to local educational agencies.Those are solely administrative constraints and do not implementstatutorily imposed limitations on Secretary's use of discretionaryfunds. Given his statutory authority to provide discretionary funds toBoard under 20 U.S.C. § 3851 (a)(2) and (4), Secretary is required tomodify his regulations to enable him to comply fully with the UnitedStates financial commitment to Board under Section 15.1. Gautreaux;Gorsuch; Ferrell.

61. Secretary is authorized by statute to allocate discretionary fundsamong potential applicants for those funds. It is within Secretary'sregulatory authority to establish program priorities for the uses ofthose funds, to establish absolute preferences that reserve all or partof the funds for a particular priority, and to establish competitivepreferences for applications that meet a particular priority.34 C.F.R. § 75.105 (b)(1), (c)(2), (c)(3). Secretary may under thoseregulations establish priorities and competitive and absolute preferencesfor a broad range of purposes, including recognition of the United Statesfinancial commitment to Board under the Consent Decree. Secretary isauthorized to establish a priority and a competitive or absolutepreference in Board's favor, and thus specifically reserve all or part ofnon-statutorily mandated Discretionary Fund monies for the Plan. See,e.g., 48 Fed.Reg. 50919 (November 4, 1983).

62. Secretary's EDGAR provisions relating to the selection of projectsfor funding after a rank ordering of all submitted applications areusually used by Secretary to make grants from the Discretionary fund.However, Secretary makes the final selection of applications forfunding, and he is permitted by his regulations to change the rank orderin which applications would otherwise be selected for funding based uponany information in the application, any other information he deemsrelevant to the program criteria, and any priorities he has establishedthat set aside or reserve discretionary funds. 34 C.F.R. § 75.217(d)-(e). Secretary's authority to create preferences and prioritiessubsumes the EDGAR "competitive" selection procedures. It permits him toreserve discretionarymonies for one applicant and to award them to that applicant withoutregard to the EDGAR competitive selection criteria. 34 C.F.R. § 75.105(c)(3).

[18] 63. In its fiscal year 1983 and 1984 appropriation acts Congressdid not earmark or allocate particular sums for the nonmandated programswithin Secretary's Discretionary Fund. Secretary is not legally bound byprogram allocations or budgetary estimates not incorporated into thelanguage of an appropriation act itself. Matter of LTV Aerospace Corp.,55 Comp.Gen. 308, 319 (1975); Matter of Financial Assistance toIntervenors, 59 Comp.Gen. 228, 231 (1980); see also, Blackhawk Heating &Plumbing Co. v. United States, 622 F.2d 539, 547 n. 6, 224 Ct.Cl. 111(1980); United States General Accounting Office, Principles of FederalAppropriations Law 5-94 to 5-103 (1982). not withstanding language incongressional committee reports recommending or directing certain usesfor Secretary's Discretionary Funds, Secretary did in fiscal year 1983,and does in fiscal year 1984, have the authority to make suchdiscretionary funds available to Board to finance its desegregationactivities.

64. All fiscal year 1984 funds reserved for the programs or purposesspecified in 20 U.S.C. § 3851 (a) are currently obligated. Nopotential applicant, other than Board, has any legal entitlement to thoseDiscretionary Fund monies. To the extent (if any) such potentialapplicants could have asserted due process rights to "compete" underSecretary's established priorities for the use of his discretionaryfunds, Secretary could have obviated any such problem in fiscal years1983 and 1984 by publishing a notice in the Federal Register of hisprospective intention to establish a priority or preference reservingcertain discretionary funds for Board pursuant to the United StatesConsent Decree obligation. 20 U.S.C. § 1232 (b)(2)(A) and (B);S.U.S.C. § 553(d)(1) and (3). In any event, potential applicants forfiscal year 1984 discretionary fund monies have no due process right to"compete" for those funds in light of Secretary's announcements in theFederal Register that any availability of those funds for 1984 grantcompetitions is contingent upon the outcome of the present litigation. 49Fed.Reg. 7551 (February 29, 1984); 49 Fed.Reg. 2462 (January 19, 1984);48 Fed.Reg. 50919 (November 4, 1983).

65. In fiscal years 1983 and 1984 Secretary was not legally obligatedto provide monies from his discretionary fund for continuation awards toparticular applicants other than Board. It was within Secretary'sauthority to decline to finance continuation projects on the groundthat, as a result of his financial commitment to Board, there were noprogram funds "available" for continuation awards or that it was in theUnited States "best interest" to provide those funds to Board rather thanto continuation projects. 34 C.F.R. § 75.253 (a).

66. In sum as to Discretionary Funds, there were in fiscal year 1983and are in fiscal year 1984 no statutory, regulatory, or other legalconstraints that would prevent Secretary from providing all or part ofthe nonstatutorily directed $18,040,000 appropriated to the DiscretionaryFund to Board for financing the programs included in Board's educationalcomponents. All fiscal year 1984 funds have been and currently are"available" to the United States within the meaning of Section 15.1.

67. Secretary is authorized by the Joint Funding Simplification Act tomodify his regulations where they impede financing a particular projectfor which assistance is available from more than one grant program.31 U.S.C. § 7103 (b)(3)-(4), 7103(c). Board has demonstrated it iseligible to receive desegregation assistance monies through the Title IVprogram and Secretary's Discretionary Fund. To the extent Secretary'sregulations require "competition" for available Title IV or DiscretionaryFund monies, if at all, Secretary is authorized to suspend thoseregulations to permit his providing assistance for Board's desegregationactivities. Secretary's regulations promulgated pursuant to the JointFunding Simplification Act also permit him to place in abeyance anyapplicable competitiveselection criteria where the project for which joint financing is soughtis of the minimum quality to qualify for funds. (34 C.F.R. § 75.219(b)); 34 C.F.R. § 75.221 (c)(3) and (5). Conclusions 44, 45 and 59establish that Board's programs meet that minimum standard. Consistentwith those joint funding regulations and notwithstanding any Title IV orDiscretionary Fund regulations for selecting among applications forfunds, Secretary is authorized to provide funds from both sourcesdirectly to Board to meet the United States financial commitment underSection 15.1.

68. In fiscal years 1983 and 1984 Congress appropriated a lump sumamount to finance Title IV and five other programs within the SpecialPrograms and Populations account, and did not designate or earmarkparticular sums for each program. H.J.Res. 631, Title III; P-L 98-139,Title III, 98 Stat. 888. In both fiscal years Secretary administrativelyallocated $24 million to the Title IV program, leaving $28,058,000 infiscal year 1983 funds and $23,447,000 in fiscal year 1984 fundsavailable within the other Special Programs subaccounts. Id.

[19] 69. Where several programs are financed through a lump sumpappropriation, an executive agency is authorized to "reprogram" orallocate the appropriations among the various programs as it deemsappropriate, notwithstanding program allocations or budgetary estimatesthat appear in congressional reports accompanying the appropriationsact. LTV Aerospace Corp., 55 Comp.Gen. at 319; Matter of Newport NewsShipbuilding and Dry Dock Co., 55 Comp.Gen. 812, 819-20 (1976); BlackhawkHeating & Plumbing Co., 622 F.2d at 547 n. 6; United States GeneralAccounting Office, Principles of Federal Appropriations Law 5-94 to 5-103(1982).

70. Secretary was authorized in fiscal year 1983 and is authorized infiscal year 1984 to reprogram available funds from the other SpecialPrograms subaccounts into the Title IV subaccount, to the extent thetotal amount distributed through the Title IV subaccount did not or doesnot exceed $37,100,000. P.L. 97-35, Title V § 509, 95 Stat. 443.Those reprogrammed Special Programs funds could thus be made available toBoard to finance any of the Title IV authorized programs or programelements described in Conclusions 44 and 45.

71. Secretary is also authorized in fiscal year 1984 to reprogram thefiscal year 1983 Special Programs carryover funds into the Title IVsubaccount. Those carryover funds are currently unobligated. They may beused by Secretary for any purposes for which they were originallyappropriated, and may be reprogrammed. 20 U.S.C. § 1225. Thosecarryover funds were originally appropriated in fiscal year 1883 and arenot subject to the $37,100,000 limitation on Title IV expenditures infiscal year 1984.

[20] 72. Funds capable of being reprogrammed are available to meet theUnited States' Consent Decree obligations notwithstanding congressionaldisapproval of a reprogramming request. Blackhawk Heating; seeImmigration and Naturalization Service v. Chadha, 462 U.S. 919, 103S.Ct. 2764, 77 L.Ed.2d 317 (1983).

73. All fiscal year 1984 funds allocated to those other SpecialPrograms subaccounts are currently unobligated. No potential applicant,other than Board, has any independent legal entitlement to those otherSpecial Programs funds. To the extent (if any) such potential applicantscould have asserted due process rights to "compete" under Secretary'sregulations for available Special Programs funds, Secretary could haveobviated any such problem in fiscal years 1983 and 1984 by publishing anotice in the Federal Register of Secretary's prospective intention toreprogram certain special Programs funds for Board pursuant to the UnitedStates Consent Decree obligation. 20 U.S.C. § 1232 (b)(2)(A) and(B); 5 U.S.C. § 553 (d)(1) and (3). In any event, potentialapplicants for fiscal year 1984 Special Programs funds have no due processright to "compete" for those funds in light of Secretary's announcementsin the Federal Register that any availability of those funds for 1984grant competitions is contingent upon the outcome of the presentlitigation. See, 48 Fed.Reg. 55900 (Dec. 16, 1983); 48 Fed.Reg. 53150(Nov. 25, 1983).

74. In fiscal years 1983 and 1984 Secretary was not legally obligatedto provide continuation awards to particular grantees, other than Board,from the Special Programs subaccounts. It was within Secretary'sauthority to decline to finance all continuation projects on the groundthat; as a result of his financial commitment to Board, there were noprogram funds "available" for continuation awards or that it was in theUnited States "best interest" to provide those funds to Board rather thanto continuation projects. 34 C.F.R. § 75.253 (a).

75. In sum as to Special Programs funds and carryover funds, there werein fiscal year 1983 and are in fiscal year 1984 no statutory,regulatory, or other legal constraints preventing Secretary fromreprogramming such funds into the Title IV subaccount. Those funds havebeen and currently are "available" to the United States within themeaning of Section 15.1.

76. To the extent fiscal year 1984 funds exist in the followingaccounts and subaccounts, have not been committed for other purposes andare not reasonably necessary for other Department of Education functions17. they too are "available" to Secretary within the meaning ofSection 15.1:

(a) Secretary is authorized to use funds appropriated to his Salaries and Expense subaccount for contracts, grants, or payments as he deems appropriate or necessary to carry out the functions of Secretary or of the Department of Education. 20 U.S.C. § 3475. Secretary has the authority to find that payments or grants to Board, deriving from a Title VI action instituted by Secretary, are appropriate to carry out an agency function. There are no statutory or regulatory constraints preventing Secretary from making those funds available to Board.

(b) Secretary is authorized to use funds appropriated to his Office for Civil Rights subaccount for payments necessary to carry out the compliance and enforcement actions of the office.18. P-L 98-139, Title III, 97 Stat. 894; 20 U.S.C. § 3413 (c)(3). Secretary has the authority to find the United States financial commitment constitutes an expense necessary completely to achieve the purpose of the Title VI compliance action brought against Board by the Office for Civil Rights, which culminated in the Consent Decree. There are no statutory or regulatory constraints preventing Secretary from making those funds in his Office for Civil Rights available to Board.

(c) Secretary is authorized to use the property or funds in his Gift and Bequest account for aiding and facilitating the work of the Department. 20 U.S.C. § 3481. Secretary has the authority to find that meeting the United States Consent Decree obligations furthers the work of the Department. There are no statutory or regulatory constraints preventing Secretary from making funds or property in his Gift and Bequest account available to Board.

77. of the fiscal year 1983 funds appropriated to or available in allnon-desegregation Department of Education accounts, $21,188,206 wasunobligated and, absent this Court's September 27, 1983 order, would havelapsed into the Treasury. Through a congressional re appropriation thosefunds could be made available to Board in fiscal year 1984 to meet theUnited States Consent Decree obligation. 31 U.S.C. § 1301.

78. There are no statutory, regulatory or other legal constraintspreventing the Executive Branch from including, in the President's budgetrequests to Congress, budgetary line items requesting that Congressprovide funds for particular purposes, activities or programs thatSecretary has not previously undertaken. If Congress appropriated fundsfor such a line item, Secretary would be authorized to spend funds forthat purpose. 31 U.S.C. § 1301; United States General AccountingOffice, Principles of Federal Appropriations Law at 2-11, 2-12, 2-26,2-27 (1983). Secretary could include in his fiscal year 1985 budgetproposal, and could have included in prior budget proposals, such a lineitem requesting that Congress appropriate funds for Board's desegregationactivities.

79. There are no statutory, regulatory or other legal constraintspreventing the Executive Branch from including in the President's budgetrequest to Congress budgetary line items within grant programs or othertypes of accounts. Secretary is authorized to create such line items toindicate the basis for the appropriation amount requested and the mannerin which he intends to allocate funds appropriated to the grant programor account. If Congress appropriated funds for such a line item,Secretary would be authorized to reserve program funds solely for thepurpose of that line item. 31 U.S.C. § 1301; United States GeneralAccounting Office, Principles of Federal Appropriations Law at 2-11,2-12, 2-26, 2-27 (1983). Secretary could include in his fiscal year 1985budget proposal, and could have included in prior budget proposals, sucha line item in the Title IV, Discretionary Fund or perhaps othersubaccounts that would further allow Secretary to reserve funds forprovision to Board.

Meaning and Effect of the Yates Bill

[21] 80. Section 111 of Public Law 98-107, 97 Stat. 742 (1983) (the"Yates Bill") provides:

There is hereby appropriated $20,000,000 to be derived by transfer from funds available for obligation in fiscal year 1983 in the appropriation for "Guaranteed Student Loans," to remain available for obligation until September 30, 1984, to enable the Secretary of Education to comply with the Consent Decree entered in United States District Court in the case of the United States of America against Board of Education for the City of Chicago (80 C 5124) on September 24, 1980.

[22] 81. All statutory interpretation begins with the plain language ofthe statute. American Tobacco Co. v. Patterson, 456 U.S. 63, 102 S.Ct.1534, 71 L.Ed.2d 748 (1982); Consumer Product Safety Commission v. GTESylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766(1980):

Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.

82. In plain language, the Yates Bill reveals only a Congressionaldetermination to appropriate $20 million to be provided to Board pursuantto the Consent Decree, prompting the Executive Branch to take the firststep toward fulfilling its obligations under Section 15.1. It reflects nocongressional determination as to the total extent of the Consent Decreeobligations, the extent of past violations, the adequacyof the $20 million to remedy past violations or the availability of otherfunds.

83. Legislative history of the Yates Bill supports that plain languageinterpretation and further refutes any notion Congress intended to renderall other funds unavailable to Board. It was passed in its ultimate formonly after alternatives that would have had such an effect had beenrejected. Evidence of rejected amendments is an appropriate aid to acourt considering questions of legislative intent. Johnson v. Departmentof Treasury, 700 F.2d 971, 974 (5th Cir. 1983).

84. In connection with the first draft of the Yates Bill, CongressmanConte submitted an "earmarking" proposal that was intended to render thefunds previously restrained by this Court unavailable to Board. Under theConte Amendment each of the categories of restrained funds was to "beavailable only to carry out the programs and projects" authorized underthe respective legislation creating the programs. H.J.Res. 367, §112, Report No. 98-374, Part I (September 22, 1983). Although thatamendment passed the Appropriations Committee, it was rejected by thefull House. Executive Branch officials later prepared an alternative toSection 111 (the Yates Bill) of H.J.Res. 368 that would have released therestrained funds to grantees other than Board and would have providedfunds to Board only under certain conditions. That alternative, which wassubmitted to staff members of the House and Senate AppropriationsCommittees, was also ultimately rejected.

85. In light of his opposition to the Yates Bill and his attempt toalter its effect, any remarks by Representative Conte are entitled tovery little weight in construing the statute. Ernst & Ernst v.Hochfelder, 425 U.S. 185, 203-04 n. 24, 96 S.Ct. 1375, 1386 n. 24, 47L.Ed.2d 668 (1976). It is well established that statements of opponentsto a measure are poor evidence of legislative intent. United States v.International Union of Operating Engineers, 638 F.2d 1161, 1168 (9thCir. 1979), cert. denied, 444 U.S. 1077, 100 S.Ct. 1026, 62 L.Ed.2d 760(1980).

[23] 86. Subsequent as well as contemporaneous congressional actionalso supports the plain meaning interpretation of the Yates Bill. In itsoriginal version the Weicker Amendment, if constitutional, would haveexpressly achieved the precise result the United States now contends theYates Bill had already achieved. It must be presumed Congress was awareof its own prior laws, United States v. Robinson, 359 F. Supp. 52, 58(D.C.Fla. 1973), and Congress would not attempt to enact redundant andunnecessary legislation. See, Jackson v. Kelly, 557 F.2d 735, 740 (10thCir. 1977). Because the original version of the Weicker Amendment wasintroduced October 4, 1983, a day before this Court found the UnitedStates' motion based on the Yates Bill to be premature, and because theWeicker Amendment was passed before this Court ultimately considered theGovernment's interpretation, it can hardly be said the Weicker Amendmentwas a congressional "response" to this Court's interpretation of theYates Bill. Thus the congressional intent underlying the Yates Bill isfurther confirmed by this subsequent legislative activity.

87. In addition to being contrary to the plain language and legislativehistory of the Yates Bill, the United States proffered construction ofthat statute would also implicitly reverse the prior determinations ofthis Court and our Court of Appeals. Given the settled principle that astatute should be construed to avoid questions regarding itsconstitutionality, Crowell v. Benson, 285 U.S. 22, 62, 52 S.Ct. 285,296, 76 L.Ed. 598 (1932), and because the United States interpretationwould force the confrontation and resolution of substantialconstitutional questions, additional reasons for rejecting the UnitedStates suggested reading of the Yates Bill are present.

88. There is no indication Congress intended the Yates Bill to limitthe United States obligation to Board to the arbitrarily-arrived-at sumof $20 million (there having been no congressional consideration ofany of the matters dealt with at such length and painstakingly in theseFindings and Conclusions). This Court responded to the enactment of theYates Bill by freeing up previously frozen funds pro tanto. By so doingit retained other funds as still "available" and thus lessened the degreeof confrontation that would have been posed by a decision holding theUnited States liable for making all funds unavailable. Plain legislativelanguage cannot be overridden by the Executive Branch's interpretation ofthe Yates Bill and its assertion of general principles of constructionreflected in certain Comptroller General Opinions (which can only be aidsto reasoning, not a substitute for it).

Meaning and Effect of the Weicker Amendment

[24] 89. Section 309 of P.L. 98-139, 97 Stat. 895 (1983) (the "WeickerAmendment") provides:

No funds appropriated in any act to the Department of Education for fiscal years 1983 and 1984 shall be withheld from distribution to grantees because of the provision of the order entered by U.S. District Court for Northern District of Illinois on June 30, 1983: Provided, that the Court's decree entered on September 24, 1980 shall remain in full force and effect.

90. As Conclusion 81 reflects, this Court must first examine thelanguage of the legislation and ordinarily must regard that language asconclusive. On its face the language of the Weicker Amendment is notconfusing or ambiguous. It is a simple declaration that no fiscal 1983 or1984 funds appropriated to the Department of Education are to berestrained from distribution to grantees because of this Court's June 30Order — in street language, it seeks to unfreeze previously frozenfunds.19. It does not at all address the availability of funds to beprovided pursuant to Section 15.1. It does not purport to limit "grantees"to some subset of persons or organizations eligible to receive Departmentfunding. Importantly (and obviously because of concerns as toconstitutionality) it does provide the Consent Decree is to remain in"full force and effect."

[25] 91. When a party argues a statute has a meaning that transcendsits explicit language, that party bears the burden of showing clearlegislative intent that such a contrary meaning was intended. Ford MotorCredit Co. v. Cenance, 452 U.S. 155, 158 n. 3, 101 S.Ct. 2239, 2241 n.3, 68 L.Ed.2d 744 (1981) (per curiam). Because the United States contendsthe Weicker Amendment has some meaning beyond the plain language of thestatute, it bears that burden. And because the doctrine disfavoringrepeals by implication has been held to apply "with full vigor" when asubsequent law is an appropriations measure, Committee for NuclearResponsibility, Inc. v. Seaborg, 463 F.2d 783, 785 (D.C. 1971), theUnited States also faces that additional burden when arguing the WeickerAmendment was intended substantively to alter the statutory availabilityof funds to Board.

92. As the following Conclusions confirm, the legislative history ofthe Weicker Amendment does not conflict with the plain languageinterpretation reflected in Conclusion 90. Instead the legislativehistory reinforces that plain language, with its negation of any effortto alter the substantive rights as between the United States and Board.

93. On October 4, 1983 (after the Yates Bill had become law on October1) Senator Weicker offered the following provision as an Amendment to theFiscal Year ("FY") 1984 Labor, Health and Human Services and EducationAppropriations Bill:

No funds appropriated in any act to the Department of Education for fiscal year 1983 and 1984 other than those appropriated by Section 111 of the Public Law 98-107 shall be available to fund the Consent Decree of 1980 between the United States and Board of Education of the City of Chicago.

Cong.Rec., S.13506.

94. That language, which would (if valid) have had an important impacton the rights that are at the core of this opinion, was never enactedinto law. Instead Senator Weicker withdrew that language, and on October4 the Senate passed the Weicker Amendment as quoted in Conclusion 89. Itssponsor, Senator Weicker, explicitly stated his proposal "would notrelease the Government from any further liability" and "if additionalfunds are required to satisfy this case . . ., we will certainly dowhatever we can to provide these funds . . ." Cong. Rec., S.13507,13535, October 4, 1983. Both the plain language of the Weicker Amendmentand its legislative history (Senator Weicker's own statement and thematters reflected in the following Conclusions) reflect (a) congressionalratification of the United States Consent Decree obligation and (b)congressional recognition of this court's power to determine the natureand scope of that obligation.

95. On October 4 Representative Conte presented an amendment toH.R.3959 that contained the extremely specific language required forearmarking. Cong.Rec., H.7973. Representative Conte's proposedamendment, like the original version of the Weicker Amendment, clearlypurported to render the restrained funds unavailable to Board. Then onOctober 8, after the Senate had rejected the original version of theWeicker Amendment (thus rejecting the equivalent of Congressman Conte'sproposal) and had adopted the Weicker Amendment in its ultimate form,Representative Conte decided not to propose his earmarking amendment tothe House.

96. On October 13 the FY 1983 Labor, Health and Human Services andEducation Appropriations bill was considered in joint conferencecommittee. Substitute bill language for the Weicker Amendment andpossible report language for inclusion in the Conference Committee Reportwere circulated by Representative Conte to members of the Committee. Inconjunction with those documents, a report called "Talking Points" wasalso transmitted to Committee members.

97. Those "Talking Points" urged that substitute language be insertedin the Weicker Amendment "because Section 308 literally only directs thatthe funds no longer be enjoined; it does not address whether the fundsmust be awarded to the recipients selected by the Department of Educationor to Chicago." Indeed the same document said, "It is possible that theCourt — consistent with the terms of Section 308 as currentlywritten — could lift its injunction but then order all or part ofthe funds to be awarded to Chicago." To respond to those perceived"shortcomings" Representative Conte's proposed substitute statute read:

No funds appropriated in any act to the Department of Education for fiscal years 1983 and 1984 other than those appropriated by Section 111 of Public Law 98-107 shall be available to fund the 1980 Consent Decree between the United States and the Board of Education of the City of Chicago; provided; that such Consent Decree shall remain in full force and effect, and nothing in this provision shall be construed to preclude the appropriation of additional funds for the express purpose of funding such Consent Decree.

To precisely the same effect, Representative Conte's proposed languagefor insertion in the Committee report read:

Section 308 is designed to ensure that FY 1983 and 1984 funds enjoined by the Court in the litigation between the United States and the Chicago Board of Education are released for awards to the intended grantees and contractors selected by the Department of Education. These funds were appropriated for worthy projects throughout the country, not for the purpose of funding the Chicago degree [sic].

In the end, however, neither the substitute bill language nor theproposed report language was approved. Instead the Weicker Amendmentpassed the House in exactlythe same form that had been approved by the Senate.

[26] 98. Remarks of a single legislator are never given controllingweight in analyzing legislative history. Chrysler Corp. v. Brown,441 U.S. 281, 311, 99 S.Ct. 1705, 1722, 60 L.Ed.2d 208 (1979). When alegislator is opposed to a measure, his remarks are entitled to verylittle weight. See, Ernst & Ernst, 425 U.S. at 203-04 n. 24, 96 S.Ct.1386 n. 24; International Union of Operating Engineers, 638 F.2d at1168. In view of Representative Conte's unsuccessful attempts to alter oroppose the Yates and Weicker Bills so as to render funds unavailable toBoard, his remarks are especially poor evidence of legislative intent. Bycontrast, the fact of those unsuccessful attempts is persuasiveconfirmatory evidence of legislative intent contrary to the abortiveefforts.

99. In particular, no significance should be attached to RepresentativeConte's October 20 statement of his "understanding" of the WeickerAmendment. See, Cong. Rec., H.8740. That statement apparently wasinserted into the Congressional Record by Representative Conte after theHouse had agreed to adopt the Senate's version of the Weicker Amendment.In view of that effort at revisionist history, coupled with the totalfailure of Representative Conte to obtain the modifications in Committeethat would have implemented Representative Conte's "understanding," itwould be especially inappropriate now to impute Representative Conte's"understanding" to other members of Congress.

100. Evidence of the evolution of an enactment, of "the effect ofamendments — whether accepted or rejected," is an important toolfor discerning legislative intent. Rogers v. Frito Lay, Inc.,611 F.2d 1074, 1080 (5th Cir.), cert. denied, 449 U.S. 889, 101 S.Ct.246, 66 L.Ed.2d 115 (1980). Thus the Senate's modification of theoriginal October 4 version of the Weicker Amendment (which, ifconstitutional, would have rendered the restrained funds unavailable toBoard), as well as the failure of the similar efforts, particularly byRepresentative Conte, to modify the Weicker Amendment as passed by theSenate, strongly confirm the statute as passed was not intended to renderthe restrained funds wholly unavailable to Board.

101. Nothing daunted, the United States essays its own attempt atrevisionist history. It urges this Court to construe the WeickerAmendment as if it had passed with its original proposed language— or with language Representative Conte tried but failed to haveenacted on several occasions. Because Congress did not accede to theUnited States proposals to render the restrained funds unavailable toBoard, however, this Court will not circumvent the congressionalrejection of these provisions, or permit the United States to do so, byinterpreting the Weicker Amendment as if those proposals had succeededrather than failed.

102. In summary, the plain language of the Weicker Amendment thussimply requires the Court to return control of the restrained funds toSecretary — to restore the pre-freeze status quo — but doesnot dictate how any distribution of the funds should occur thereafter.And the foregoing examination of the legislative history of the WeickerAmendment further supports this plain meaning interpretation of thestatute. Essentially the Weicker Amendment reflects a legislativecompromise in which Congress specifically rejected any attempt todetermine the substantive entitlement of Board or any other potentialgrantee to the restrained funds, leaving the Consent Decree in "fullforce and effect" and recognizing the determination was one this Courtwould be making. In effect the statute thus represented a congressional"separation of powers" determination that the Executive Branch shouldregain control of the funds, after which the rights to ultimatedistribution of the funds would simply be in accordance with law —not dictated by the statute itself.

103. In light of the preceding Conclusions as to the continued"availability" (in Section 15.1 terms) of the funds now covered by thisCourt's restraining order, thisCourt has concluded the restraining order can be terminated. That rendersmoot any possible conflict between the Weicker Amendment (read properlyin accordance with the foregoing Conclusions) and the Constitution. Italso responds to the salutary principle that constitutional questionsshould not be decided in advance of the necessity to decide them. RescueArmy v. Municipal Court, 331 U.S. 549, 67 S.Ct. 1409, 91 L.Ed. 1666(1947). But because of the sharply different interpretation of theWeicker Amendment urged by the United States (and the far more serious,substantial and complex questions of constitutionality thatinterpretation would raise), it remains important, for the reasons madeplain in the following Conclusions, to identify and discuss the relevantconstitutional questions and their significance for this opinion.

[27, 28] 104. In general Congress has the authority to define bystatute the substantive law courts are required to apply. Accordinglywhen there has been a change in the applicable statutory law afterjudgment in the lower court but before an appellate or other finaldecision, the court must dispose of the case according to law existing atthe time of its decision. United States v. Schooner Peggy, 5 U.S. (1Cranch) 103, 110, 2 L.Ed. 49 (1801). That rule however is subject to theexception that courts will refuse to apply the law in effect at the timea decision is rendered when to do so would result in "manifestinjustice." Bradley v. School Board of City of Richmond, 416 U.S. 696,711, 94 S.Ct. 2006, 2016, 40 L.Ed.2d 476 (1974). Among the considerationsrelevant to the potential for manifest injustice are "the nature andidentity of the parties, . . . the nature of their rights and . . . thenature of the impact of the change in law upon those rights." Id. at717, 94 S.Ct. at 2019.

[29] 105. Article III of the Constitution vests "the judicial power ofthe United States" in federal courts. While Congress is vested with broadlegislative powers under Article I, it can neither "exceed the limit ofits own authority" nor "assume a power which could only be properlyexercised by [courts] because it [is] in its nature clearly judicial."Kilbourn v. Thompson, 103 U.S. 168, 192, 26 L.Ed. 377 (1880). Thus "theConstitution has invested Congress with no judicial powers; it cannot bedoubted that a legislative direction to a court to find a judgment in acertain way would be little less than a judgment rendered directly byCongress." Nock v. United States, 2 Ct.Cl. 451, 457-58, (1867), quoted inUnited States v. Sioux Nation of Indians, 448 U.S. 371, 398, 100 S.Ct.2716, 2732, 65 L.Ed.2d 844 (1980). When Congress regulates functions ofthe judiciary in a pending case, it walks a line between judicial andlegislative authority and exceeds that line if it sets aside a judgmentor orders retrial of a previously adjudicated issue. Id. at 427-30, 100S.Ct. at 2746-48 (Rehnquist, J., dissenting). Consequently, legislationthat "prescribed a rule of decision in a case pending before the courts,and did so in a manner that required the courts to decide the controversyin the Government's favor" would be unconstitutional. Id. at 404, 100S.Ct. at 2735.

106. Separation of powers limits the exercise of judicial power byCongress and reflects the Framers concern for maintaining theindependence of the coordinate departments as a bulwark against tyranny.United States v. Brown, 381 U.S. 437, 442-43, 85 S.Ct. 1707, 1711-12, 14L.Ed.2d 484 (1964); The Federalist Nos. 47 and 48 (J. Madison).

[30] 107. If Congress does not purport to alter the governingprocedural and substantive law, Congress cannot force its interpretationof that law upon the federal courts in particular cases. L. Tribe,American Constitutional Law § 3-5, at 39 (1978). In terms of theseparation of powers analysis recently applied by the Supreme Court, suchconduct would be an act by one branch of government that "prevents[another branch] from accomplishing its constitutionally assignedfunctions." Nixon v. Administrator of General Services, 433 U.S. 425,443, 97 S.Ct. 2777, 2790, 53 L.Ed.2d 867 (1977).

(31) 108. No congressional change in the law can retroactively effect ajudicial determination brought to final judgment before that change.Daylo v. Administrator of Veterans Affairs, 501 F.2d 811, 816 (D.C.Cir.1974). To permit otherwise would destroy the finality and independence ofthe judicial action. Even when a judgment is not final, "the separationof powers bar a federal court from giving operational weight to apronouncement by Congress . . . that what had theretofore been judiciallydeclared as law shall be deemed never to have had effect." Cerro MetalProducts v. Marshall, 467 F. Supp. 869, 878 (E.D.Pa. 1978), aff'd,620 F.2d 964 (3d Cir. 1980). That principle also protects the integrityof judical action and prevents the manifest injustice that retroactiveapplication can cause. Id. at 877-79; See also, Coe v. Secretary ofHealth, Education and Welfare, 502 F.2d 1337, 1340 (4th Cir. 1974).

[32] 109. In cases involving property rights against the UnitedStates, the doctrine of separation of powers (as well as principles ofequity) forbids application of a substantive law passed by Congress,pending appeal, that would effectively require a federal court to reversea judgment entered against the United States. United States v. Klein, 80U.S. (13 Wall.) 128, 20 L.Ed. 519 (1872); see, also Sioux Nation ofIndians.

[33, 34] 110. Under the Fifth Amendment property may not be takenwithout the payment of just compensation. Rights that have become vestedby judgment constitute property protected from legislative interference.McCullough v. Virginia, 172 U.S. 102, 123-24, 19 S.Ct. 134, 142, 43L.Ed. 382 (1898); Daylo, 501 F.2d at 816. Moreover, contract rightsagainst the United States constitute property protected by the DueProcess Clause. Lynch v. United States, 292 U.S. 571, 579, 54 S.Ct. 840,843, 78 L.Ed. 1434 (1934). Courts have carefully distinguished situationswhere congressional action impacts only on unvested statutory rights fromthose where vested contract rights are effected. See, deRodulfa v. UnitedStates, 461 F.2d 1240, 1257 (D.C. Cir.), cert. denied, 409 U.S. 949, 93S.Ct. 270, 34 L.Ed.2d 220 (1972); Memorial Hospital v. Heckles706 F.2d 1130, 1136-37 (11th Cir. 1983).

[35] 111. Any vested cause of action, whether emanating from contractor common law principles, constitutes property beyond the power of thelegislature to take away. deRodulfa, 441 F.2d at 1257. Similarly anattachment, mortgage or other lien entitling a creditor to resort tospecific property for the satisfaction of a claim is a property rightprotected by the Fifth Amendment. Armstrong v. United States, 364 U.S. 40,44-46, 80 S.Ct. 1563, 1566-67, 4 L.Ed.2d 1554 (1960); Louisville Bank v.Radford; 295 U.S. 555, 55 S.Ct. 854, 79 L.Ed. 1593 (1935).

112. Under either the United States or Board's interpretations of theWeicker Amendment, that statute purports to require this Court todissolve its injunction, thus "reversing" a particular judicial order ina particular case. If required to decide this question, this Court mightwell be forced to conclude that aspect of the Weicker Amendment violatesfundamental principles of separation of powers. Sioux Nation of Indians;Nixon v. Administrator of General Services. This Court's determination asreflected in Conclusion 103 avoids that problem.

[36] 113. However, the United States strained interpretation of theWeicker Amendment presents serious due process issues that do not afflictBoard's (and this Court's) reading. One aspect of those due processproblems specifically regards the effect of the Weicker Amendment asinterpreted by the United States on fiscal 1983 funds. When those fundswere appropriated they became potentially "available" to Board within themeaning of Section 15.1. At the moment the funds so became available, theExecutive Branch had an obligation "to make every good faith effort toseek to find and provide" those funds to Board. As such, the UnitedStates Consent Decree duties — and Board's correlativeConsent Decree rights — with respect to those funds became fixed inlegal terms. Even were it assumed Congress might later alter statutoryrights as to the availability of those funds, Congress could not,consistent with due process, abrogate Board's Consent Decree rights thathad already vested both by contract and by judgment. See, Daylo; CerroMetal Products; see also, Blackhawk Heating.

114. Put in a slightly different way, at the time the Weicker Amendmentwas enacted it was no longer within Congress power to affect the UnitedStates duties under the Consent Decree as to the restrained fiscal year1983 funds. Pursuant to this Court's September 27, 1983 order, the UnitedStates had recorded those funds as obligated, with Board as analternative contingent obligee of the Executive Branch.31 U.S.C. § 1501 (a)(6). Availability of funds for a particularpurpose is determined at the time of obligation. Once obligated, they wereexempt from any later statutory alterations of availability.

115. From still another perspective, the United States' false readingof the Weicker Amendment also appears to run afoul of due process becauseit would destroy Board's right to satisfy its claim from the fundsrestrained by this Court. In that sense, the frozen funds are similar toan attachment or lien allowing one to resort to specific property forsatisfaction of a claim. Such interests are property rights protected bythe Fifth Amendment. Armstrong.

116. In addition to the substantial due process questions raised by theUnited States interpretation, its view of the Weicker Amendment alsoposes additional separation of powers concerns not presented by thisCourt's reading. Under the United States version, this Court wouldimpermissibly have to give effect to a pronouncement by Congress that"what had theretofore been judicially declared as law shall be deemednever to have had effect." Cerro Metal Products. That would placeCongress in the position of having crossed the delicate line betweenlegislative and judicial functions by dictating the result in aparticular case. According to the United States the Weicker Amendmentbecomes a "substantive" determination applicable to only the ChicagoBoard of Education and this lawsuit. While Congress has broad power tolegislate with regard to classes of cases, its power is far more limitedwith regard to individual cases. See, Sioux Nation of Indians, 448 U.S.at 430, 100 S.Ct. at 2748 (Rehnquist, J., dissenting). Relatedly, theUnited States proposed reading also violates the principle that Congresscannot change the applicable law in a pending appeal to relieve theUnited States of an unfavorable judgment in a dispute involving propertyrights. Klein, see also, Sioux Nation of lndians, 448 U.S. at 404, 100S.Ct. at 2735.

117. Finally, a retroactive application of the United States positionon the Weicker Amendment — creating the fiction that the funds hadnever been available, so that there had never been a violation —would also result in "manifest injustice" (see Conclusion 104). It wouldbelatedly disrupt an agreed process for vindicating the constitutionalrights of Chicago students and reward the contumacious actions of theExecutive Branch. It would also redefine Board's mature rights under theConsent Decree and saddle Board with a substantially broaderresponsibility for financing the Plan. Under the circumstances, it wouldbe wholly improper for this Court to adopt and apply retroactively theUnited States skewed interpretation of the Weicker Amendment. Bradley;Coe.

118. In summary as to the Weicker Amendment, the United Statesinterpretation, under which the statute would be a congressionaldetermination that the restrained funds are not now and never wereavailable, is incorrect because (a) it conflicts with the plain languageof the Amendment, (b) it conflicts with the legislative history of theAmendment and (c) it would render the Amendment plainly unconstitutionalin a number of ways. By contrast the Board's interpretation — thatthe Weicker Amendment, if constitutional, requires this Court to vacateits restrainingorder, but does not dictate who should receive the funds — iscorrect, reflecting the plain language and legislative history of theAmendment. While the Amendment might nonetheless pose constitutionalproblems, this Court need not reach that question because it is nowprepared to lift its restraining order upon issuance of an appropriateorder in conformity with this opinion, thereby avoiding any potentialconflict with the Amendment.

119. Accordingly neither the Yates Bill nor the Weicker Amendmentrenders the restrained funds unavailable to be provided to Board.Furthermore, the $20 million provided to Board pursuant to the Yates Billdoes not satisfy the United States obligations under Section 15.1 norfully remedy its past violations. That contention, initially made by theUnited States in its Motion To Dismiss filed immediately after passage ofthe Yates Bill, and repeatedly reasserted up to the present, is whollyuntenable. One primary effect of the language and legislative historiesof both the Yates Bill and Weicker Amendment is to reconfirm that theUnited States has a substantial obligation under Section 15.1, anobligation that has not yet been complied with and that is to be furtherconsidered and enforced by this Court.

Additional United States Violations of Section 151 and Subsequent Court Orders, and Consequent Remedial Obligations

[37] 120. All the following actions, taken by the Executive Branch inconnection with Congressional consideration of the Yates Bill,constituted violations of Section 15.1 (see Findings 504-05, 507-09):

(a) In connection with the first draft of the Yates Bill, H.J.Res. 367, the Executive Branch supported Congressman Conte's "earmarking" proposal. That amendment was intended to render the funds previously restrained by this Court unavailable to Board. See, H.J.Res. 367, § 112, Report No. 98-374, Part I (September 22, 1983).

(b) During Congressional consideration of H.J.Res. 368, Executive Branch officials prepared an alternative to Section 111 in an attempt to secure legislation that would have released the restrained funds to grantees other than Board. That proposed substitute language would have established a $14,600,000 contingency fund to satisfy any final court order against the United States but would have made other fiscal year 1983 funds unavailable for that purpose.

121. All the following actions, taken by the Executive Branch inconnection with Congressional consideration of the Weicker Amendment,also constituted violations of Section 15.1 (see Findings 512-18):

(a) On October 4, 1983 the Department of Education prepared the following amendment to the Fiscal Year 1984 Labor, Health and Human Services and Education Appropriations Bill:

No funds appropriated in any act to the Department of Education for fiscal year 1983 and 1984 other than those appropriated by Section 111 of the Public Law 98-107 shall be available to fund the Consent Decree of 1980 between the United States and the Board of Education of the City of Chicago. Cong.Rec., S. 13506.

That language was proposed by Senator Weicker as amendment number 2277. If it had been enacted and found constitutional, that provision would have rendered the restrained 1983 and 1984 funds unavailable to Board.

(b) After a modified version of the Weicker Amendment that did not render the restrained funds unavailable to Board had passed the Senate, the Department of Education prepared and transmitted substitute bill language to conference committee members:

No funds appropriated in any act to the Department of Education for fiscal year 1983 and 1984 other than those appropriated by Section 111 of Public Law 98-107 shall be available to fund the 1980 Consent Decree between the United States and the Board of Education of the City of Chicago: Provided, that such Consent Decree shall remain in full force and effect, and nothing in this provision shall be construed to preclude the appropriation of additional funds for the express purpose of funding such Consent Decree. If adopted and found constitutional, that substitute language would also have rendered the restrained funds unavailable to Board.

(c) In addition the Department of Education submitted proposed language for insertion in the Committee Report that would have attempted to render the restrained funds unavailable to Board: Section 108 is designed to ensure that FY 1983 and 1984 funds enjoined by the Court in the litigation between the United States and the Chicago Board of Education are released for awards to the intended grantees and contractors selected by the Department of Education. These funds were appropriated for worthy projects throughout the country, not for the purpose of funding the Chicago degree [sic].

(d) In conjunction with the substitute bill language and proposed Committee Report language, the Department of Education also prepared and submitted a paper entitled "Talking Points" to members of the Conference Committee. That paper urged adoption of those measures in order to render the restrained funds unavailable to Board.

122. On July 15, 1983 the United States filed with this Court a Reportin purported compliance with its reporting obligations under Order ¶2, 567 F. Supp. at 288. That Report failed to present a discussion ofspecific steps to be included in the United States' program of compliancewith the Order and was hence a willful and bad faith violation of theUnited States reporting obligations.

123. In the same way, the alleged Plan of the United States forSupporting the Desegregation Plan of Board of Education of the City ofChicago, filed with this Court November 10, 1983, contained no adequatesuggestions at all for remedying the United States past Consent Decreeviolations or for providing further funding for the Plan. By submittingthat so-called "Plan," the United States willfully and in bad faithviolated this Court's October 28, 1983 order.

124. As part of the same ongoing pattern, the United States activitieswith regard to the funds restrained by this Court constitute furtherwillful, bad faith violations of Section 15.1 and subsequent Courtorders. Among those violations are:

(a) Despite having preserved the "excess funds" from lapsing, pursuant to this Court's September 27, 1983 order, the United States failed to seek re appropriation of those funds (which do not have any other "intended uses") for provision to Board for implementation of the Plan.

(b) In a like show of obstructionism, the United States has continued to refuse to provide any of the "carry over" funds to Board, despite their clear availability and the absence of even remotely compelling competing needs for these funds.

(c) Similarly, the United States has failed to provide Board any of the previously restrained 1983 funds that became available for distribution to grantees, including Board, pursuant to this Court's November 21, 1983 order.

125. Perhaps even worse than such stonewalling, the United Statescontinues deliberately to flout Section 15.1, the Consent Decree andsubsequent court orders by engaging in a broad course of conduct designedto render unavailable funds that could be used, and would go part of theway toward being adequate, for implementation of the Plan. Thoseactions, which are a continuation of the conduct previously found by thisCourt to violate Section 15.1, constitute additional willful and badfaith violations and include:

(a) failure of the Executive Branch to request fiscal year 1984 or 1985 funding for Title IV of the Civil Rights Act of 1964;

(b) failure of the Executive Branch to seek fiscal year 1984 or 1985 appropriations for the Discretionary Fund sufficient to provide adequate local desegregation assistance;

(c) failure of the Executive Branch in fiscal years 1984 and 1985 to request any appropriations for the Special Programs and Populations subaccounts currently subject to the Order;

(d) Secretary's prior decision and current intention not to reprogram available funds, or formally to request congressional committee approval to reprogram such funds, into subaccounts from which desegregation assistance could be provided to Board;

(e) the decision of the Department of Education not to provide direct grants to local educational agencies with fiscal year 1984 or 1985 funds under Title IV of the Civil Rights Act of 1964;

(f) Secretary's prior decision and current intention not to set aside any fiscal year 1984 or 1985 funds, including available Discretionary Fund moneys, specifically for Board to support its desegregation program costs;

(g) the prior decision and current intention of the Executive Branch not to seek legislation in fiscal year 1984 or 1985 providing specific appropriations to fund all or any portion of Board's costs of implementing the Plan;

(h) the decision of the Department of Education and the Executive Branch to submit a fiscal year 1985 budget proposal to Congress for the Department that includes earmarking language to render all funds appropriated to the Department in fiscal year 1985 and future fiscal years unavailable to Board for use in implementing the Plan.

126. Most recently, the efforts of the Department of Education topromulgate new Regulations — apparently in direct response to thislitigation — designed to render funds unavailable for provision toBoard for implementation of the Plan constitute an additional anddeliberate violation of Section 15.1 and subsequent court orders. Thoseproposed regulations, 49 Fed.Reg. 7546-51 (February 29, 1984), aredesigned to "interpret" statutory eligibility criteria for grants fromSecretary's Discretionary Fund in a manner inconsistent with the intentof Congress. In any case they are an attempt to render already availablefunds unavailable for Board's use.

[38, 39] 127. Such persistent violations of the Consent Decree andsubsequent court orders by the United States may give rise to remedialobligations that go beyond the particular obligations initiallycontemplated by Section 15.1. It is a basic equitable principle that acourt may devise a remedy that exceeds the terms of a prior agreementbetween the parties if necessary to make the injured party whole. Waltersv. Marathon Oil Co., 642 F.2d 1098, 1100 (7th Cir. 1981). Thus a courtmay impose "additional consistent burdens" designed "to ensureimplementation of the decree" when a party to a consent decree has failedto comply with his obligation. Brewster v. Dukakis, 675 F.2d 1, 4 (1stCir. 1982).

[40] 128. In like fashion a court, enforcing its order throughcontempt, may require a contemnor to perform affirmative acts notmandated by an underlying decree. In re Arthur Treacher's FranchiseLitigation, 689 F.2d 1150, 1159 (3d Cir. 1980); NLRB v. JP. Stevens &Company, Inc., 563 F.2d 8 (2d Cir. 1977), cert. denied, 434 U.S. 1064, 98S.Ct. 1240, 55 L.Ed.2d 765 (1978); Franklin Mint Corp. v. Franklin Mint,Ltd., 360 F. Supp. 478 (E.D.Pa. 1973). Equitable power of a court todirect such action, however, is not dependent on a finding of contempt orbad faith. See, Alexander v. Hill, 707 F.2d 780, 783 (D.C.Cir. 1983),cert. denied, — U.S. —, 104 S.Ct. 206, 78 L.Ed.2d 183(1983).

[41, 42] 129. As indicated at the outset of this opinion, a consentdecree has a double aspect — both as contract and as court order.From the former perspective, a party to an agreement may not flout itsobligations or take actions that have the effect of destroying orinjuring the right ofthe other party to receive the benefits of the agreement. Williston onContracts §§ 670, 1959 (3d ed. 1978). Though it is always important toensure accountability, that importance is heightened in the presentcase, where it is the United States that has so persistently attempted toflout its obligations. United States v. An Undetermined Quantity, etc.,583 F.2d 942, 949 (7th Cir. 1978); United States v. United Mine Workers,330 U.S. 258, 312, 67 S.Ct. 677, 705, 91 L.Ed. 884 (1947). Board, likeany citizen, has the "right to expect fair dealing from [the]Government." S & E Contractors v. United States, 406 U.S. 1, 10, 92S.Ct. 1411, 1417, 31 L.Ed.2d 658 (1972); see also, United States v.119.67 Acres of Land, 663 F.2d 1328, 1333 (5th Cir. 1981).

130. All the foregoing discussion creates still another double aspectof the United States obligations. First, all the particular obligationsof the United States detailed in these Conclusions are required as amatter of interpretation of the Consent Decree, viewed both alone and inlight of the present circumstances. Second, even were that not the casethe United States violations and efforts to undermine its obligationsought to render performance of the same obligations mandatory as a purelyremedial matter.

Present Obligations of the United States

131. This Court's Order ¶ 1(b) decided Section 15.1 of the ConsentDecree then required the Executive Branch "to take every affirmative stepwithin its legal authority to seek to find and provide desegregationfunding to Board, until funding adequate for full implementation of thePlan has been provided." Order ¶ 2 then prescribed detailed remedialsteps to ensure fulfillment of this obligation. That remedial portion ofthe Order was vacated by the Court of Appeals to give the ExecutiveBranch an opportunity "to fashion its proposed remedy." Except for the$20 million provided pursuant to the Yates Bill (over the opposition ofthe Executive Branch), the United States has not taken advantage of theopportunity provided, nor has it given the slightest indication it plansto fulfill its obligations under the Consent Decree.

132. Consistent with Section 15.1 and the parties Joint Stipulation asto their intentions when they entered into that agreement, it isnecessary and proper for this Court again to "interpret" and "apply" the"general obligation on the part of" the United States "as appropriate in[today's] circumstances" (see Finding 104). Under the presentcircumstances it is clear that, as a matter of construction of Section15.1, the United States is bound to take every affirmative step withinits legal authority to find and provide adequate financing for the Plan,including steps to provide available funds and steps to render fundsavailable, as detailed in these Conclusions.

133. In another mischaracterization of the issues, the United Statesargues Section 15.1 could not reasonably be construed to dictate asubstantial funding result. That contention wholly misapprehends thenature of the obligation contained in Section 15.1. Section 15.1essentially directs that a process take place, rather than assuring anyparticular result of that process. It does not guarantee Board the UnitedStates will provide any sum certain. Instead it requires the UnitedStates to undertake the process of making every good faith effort to findand provide funds, while the result to be obtained is dependent on andlimited by other circumstances — particularly the amount of fundingthat is or becomes available as a result of the process and the amount offunding necessary for adequate implementation of the Plan. While thosecircumstances limit the result to be obtained, they do not limit thenature of the process that the United States must undertake to attempt toachieve the result.

134. Under any circumstances, Section 15.1 imposes a serious andsubstantial obligation on the United States. Geisser v. United States,513 F.2d 862, 869-71 (5th Cir. 1975), on remand, 414 F. Supp. 49 (S.D.Fla. 1976), appeal after remand; 627 F.2d745 (5th Cir. 1980), cert. denied, 450 U.S. 1031, 101 S.Ct. 1741, 68L.Ed.2d 226 (1981). Courts have frequently set demanding standards foraction by government officials who have entered into consent decreescontaining "best efforts" or similar commitments. Such standards haveincluded requiring the provision of available funds and prohibiting orrequiring various lobbying activities. Courts have not interpreted suchcommitments to permit government officials to flout or evade theirduties. Brewster v. Dukakis, 675 F.2d 1 (1st Cir. 1982); Ricci v. Okin,537 F. Supp. 817 (D.C. Mass. 1982). And it would be a travesty of justiceto accept the United States argument that such cases have less forcebecause they involved outrageous conduct by state rather than (as here)federal officials. See, An Undetermined Quantity, 583 F.2d at 949.

135. There is another locution that equally illustrates the fallacy inthe United States' position. Though the Executive Branch certainly doesnot retain discretion under Section 15.1 as to whether to meet itsobligation, so that it may not directly renege on its promise orindirectly undermine it, the Executive Branch does retain broaddiscretion under Section 15.1 as to how to meet its obligation.

[43] 136. As to the presently available funds, the Executive Branch hasin the past totally distorted the concept of exercise of its discretion.It has persistently searched for ways not to meet its obligation to Boardrather than for how to meet that obligation. As a consequence it has soreduced the availability of funds that sufficient funding to meet itsobligation is no longer "available."20. That there are now severelylimited available funds, resulting in apparently severely limitedremaining discretion, is the direct consequence of the Executive Branch'sdeliberate violations of Section 15.1. Nor can credence be given to theExecutive Branch's contention that it continues to retain discretion todispense with those funds otherwise, based on the superficially appealingequitable argument that numerous applicants for those funds willotherwise be disappointed. Those applicants (even though they do not haveany legal entitlement to the funds, unlike Board) may have a call on thecourt's equitable conscience, but the Executive Branch does not. It isthe Executive Branch that has wrongfully created these circumstances, andit cannot in good conscience invoke the equities as surrogate for theinnocent applicants. Nevertheless, under Section 15.1 the United Statesstill generally retains its discretion as to how to meet its obligation,and it need not provide the now available funds to Board if it rendersother adequate funds available.

137. Unless the United States so renders other adequate fundingavailable, Board is entitled under Section 15.1 to the available fiscal1984 funds to the extent necessary adequately to implement itsdesegregation programs. This result is also required because the UnitedStates past and continuing violations of the Consent Decree haveeliminated all alternative sources of available funds and because it isnecessary to redress those violations. At a minimum the Executive Branchhas historically allocated Title IV and Discretionary Fund moneysdisproportionately in favor of other applicants. In prior years otherpotential recipients of the fiscal year 1984 funds have benefitted fromSecretary's violations of the Consent Decree, and the funds now remainingavailable are not even sufficient to correct that historical imbalance.Even apart from that, Secretary has not created any entitlement in otherapplicants to those funds in fiscal year 1984, and no number or form ofExecutive Branch "policy" decisions, "representations" or subsequent"commitments" can undo or override the United States obligations to Boardand indeed to this Court. See, Geisser Brewster; Ricci.

[44] 138. Another aspect of the plain meaning of Section 15.1 makesclear the Executive Branch's obligation extends to legislativeactivities, to the extent necessary to insure resources for fullimplementation of the Plan. Section 15.1 employs the words "find" and"every available form of financial resources." If all that had beenintended was to give Board access to existing funding sources, the verb"provide" would have done the job. "Find" imports something more: thesearch for funds. If the United States obligation did not extend toactivities such as seeking re appropriation or new legislation when othersources of available funds prove inadequate, the word "find" would berendered meaningless. It is a cardinal principle of construction thateach provision of an agreement should be given meaning if possible.Hanley v. James McHugh Construction Co., 444 F.2d 1006, 1009 (7th Cir.1972). And the linked use of the phrase "every available form offinancial resources" stresses a "universal search," which necessarilyincludes legislative initiatives as one aspect of the required effort.

139. Nor is Conclusion 138 speculative, though the language is clearenough. Examination of extrinsic evidence also confirms the ExecutiveBranch's obligation under Section 15.1 extends to lobbying activities.Language proposed as a precursor to Section 15.1 in a June 19, 1980letter from Assistant Attorney General Drew Days to Board (GX 1-20) showsthat the word "available" cannot be read as a term of limitation and thatlegislative initiatives were contemplated.

140. Moreover, the broad circumstances (see Findings 108-09)surrounding entry of the Consent Decree also indicate the United States'obligation in Section 15.1 extends to lobbying activities. Its financialcommitment in Section 15.1 was the principal quid pro quo for Board'swillingness to forego litigation and develop the Plan. In return for itsSection 15.1 commitment the United States secured the full result itsought (and might not otherwise have achieved) without the expense anddelay of complex litigation.

[45] 141. It would be inequitable to construe the Consent Decree in away that would mean Board undertook its binding and substantialobligations without any assurance the United States could not completelyeviscerate its one obligation through lobbying activity or inactivity. Itis a principle of contract construction that an agreement should not beinterpreted in a manner that will place one party wholly at the will ormercy of another. Padbloc Co. v. United States, 161 Ct.Cl. 369, 376-77(1963). It would distort that principle to hold that while Board is boundto its substantial obligations the Executive Branch is free completely toundermine its obligations through lobbying activity or inactivity. Nosuch totally empty promise will be implied by this Court.

142. Viewed either alone or in the present circumstances, Section 15.1(as a matter of construction) requires the Executive Branch promptly toundertake some combination of the following lobbying activities to theextent necessary to assure financing adequate for implementation of thePlan:

(a) reporting to Congress on the substance of this Court's decision and the need for funds to meet the United States obligation under Section 15.1;

(b) requesting re appropriation of excess 1983 funds, and, at the appropriate time, excess funds in 1984 and subsequent years;

(c) requesting re appropriation of Guaranteed Student Loan or other 1984 Department of Education Funds;

(d) requesting supplemental 1984 Department of Education appropriations for use in meeting its obligations to Board;

(e) seeking fiscal year 1985 appropriations;

(f) taking any other legislative initiatives that the Department, using "every good faith effort," can identify that might result in rendering funds available to Board; and

(g) opposing any legislative initiatives designed to render funds un available for provision to Board.

143. As for Conclusion 142(a), the Executive Branch and specificallythe Department of Education are required by statute to submit reports toCongress conveying similar information. See, 20 U.S.C. § 3486;31 U.S.C. § 1105, 1108. As for the remaining activities described inConclusion 142, they represent the Executive Branch's minimum obligationswith respect to legislative initiatives consistent with the terms ofSection 15.1, either on its face or as interpreted in light of thepresent circumstances. Of course the Executive Branch retains discretionto choose among those potential legislative initiatives, so long as itexercises that discretion in a manner so as "to make every good faitheffort" to "find" adequate financing.

Separation of Powers: Judicial Consideration of Legislative Activities

144. Separation of powers doctrine serves "to check the extent of powerexercisable by any one branch of Government in order to protect thepeople from oppression," Consumer Energy Council of America v. F.E.R.C.,673 F.2d 425, 471 (D.C.Cir. 1982), aff'd, — U.S. —, —,—, 103 S.Ct. 3556, 77 L.Ed.2d 1402, 1403, 1413 (1983). Thatdoctrine was adopted "not to promote efficiency but to preclude theexercise of arbitrary power." Myers v. United States, 272 U.S. 52,292-93, 47 S.Ct. 21, 84-85, 71 L.Ed. 160 (1926) (Brandeis, J.,dissenting). It does not require "three airtight departments ofgovernment." Rather the doctrine is flexible, and the measure ofconformance to its principles is pragmatic. Nixon v. Administrator ofGeneral Services, 433 U.S. 425, 441-43, 97 S.Ct. 2777, 2789-90, 53L.Ed.2d 867 (1977).

[46] 145. To determine whether an act of one branch of governmentdisrupts the proper balance between the coordinate branches, the properinquiry focuses on the extent to which the act prevents another branchfrom accomplishing its constitutionally assigned functions. Only if thatthreshold inquiry reveals the potential for disruption will a court thenexamine whether that impact is justified by an overriding need to promoteobjectives within the constitutional authority of the first branch. Id.at 443, 97 S.Ct. at 2790.

[47] 146. Enforcement of the Consent Decree by foreclosing certainnarrow legislative activities by the Executive Branch, and requiringcertain others, involves no disruption of lawful Executive Branchactivities. Nor does it disrupt the balance between coordinate branches,because the Executive Branch itself properly exercised its ownconstitutionally assigned power when it chose to enter into the ConsentDecree. Enforcement of the Executive Branch's own voluntary decision isnot an unwarranted "disruption" of the exercise of its powers. See, id.;Citizens for a Better Environment v. Gorsuch, 718 F.2d 1117, 1127-30(D.C.Cir. 1983); Gautreaux v. Pierce, 690 F.2d 616, 637-38 (7th Cir.1982); Alliance To End Repression v. City of Chicago, 733 F.2d 1187 at1191 (7th Cir. 1984).

147. Enforcement of the full substance of the United States commitmentin Section 15.1 is further justified by the "overriding need" to protectthe constitutional rights of Chicago students and the integrity of theJudicial Branch itself. Nixon v. Administrator of General Services; seealso, Marbury v. Madison, 5 U.S. (1 Cranch) 137, 163, 177, 2 L.Ed. 60(1803); An Undetermined Quantity, Etc., 583 F.2d at 949.

[48] 148. Nor do the legislative activities of the Executive Branch inthe circumstances of this case present "political questions" that may notbe considered by this Court. Baker v. Carr, 369 U.S. 186, 217, 82 S.Ct.691, 710, 7 L.Ed.2d 663 (1962), defines the criteria for evaluating theapplicability of the political question doctrine:

Prominent on the surface of any case held to involve a political question is found a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for revolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of the government; or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question.

149. That doctrine's first strand — "textually demonstrableconstitutional commitment" — has been carefully and narrowlyapplied. In many instances, the exercise of powers that initially appearto be committed to another branch by the Constitution have been found notso committed and subject to review by the courts. See, Powell v.McCormack, 395 U.S. 486, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969); Roudebushv. Hartke, 405 U.S. 15, 92 S.Ct. 804, 31 L.Ed.2d 1 (1972).

150. Article II, Section 3 of the Constitution provides in part:

Section 3. He shall from time to time give to the Congress information of the State of the Union, and recommend to their Consideration such Measures as he shall judge necessary and expedient. . . .

That provision establishes the duty of the President to recommendmeasures to Congress, thereby giving him a positive role in thelegislative process. Its purpose is to "make it plain that it is not anofficious intrusion upon the functions of the legislative branch,violative of the principle of separation of powers, when the Presidentproposes a program of lawmaking . . ." E. Dumbauld, The Constitution ofthe United States 311 (1964).

151. Article II, Section 3 addresses and clarifies a separation ofpowers issue not at all implicated in the present case. It establishes theExecutive's duty and ability to recommend matters to Congress. It doesnot however address the accountability of the Executive Branch for itsfailure to meet an independent obligation to do so, nor does it excusethat failure. It assures only that fulfillment of an obligation such asthat owed to Board does not violate the doctrine of separation ofpowers. Accordingly Article II, Section 3 does not constitute a "textualcommitment" of Executive Branch legislative activity in thesecircumstances.

152. As Conclusions 138-43 make plain, the Executive Branch's Section15.1 commitment to Board (and to this Court as well) effectively reflectsa determination that if sufficient presently available funding could notbe provided, it would become "necessary and expedient" to undertakelegislative initiatives. That determination represented a proper exerciseof the Executive Branch's discretion and a voluntary limitation on thefuture exercise of that discretion. See, Citizens for a BetterEnvironment v. Gorsuch; Covelo Indian Community v. Watt, 551 F. Supp. 366,378 & n. 9 (D.D.C. 1982), aff'd, Docket Number 82-2377 (D.C.Cir. December21, 1982), vacated as moot, Docket Number 82-2377 (D.C.Cir. February 1,1983).

[49] 153. Such Executive Branch agreements to particular restrictionson the exercise of its "executive" powers are proper and can beenforced. Gautreaux v. Pierce, 690 F.2d at 637-38; Alliance To EndRepression, at 141. Self-imposed restraints of this type do notimpermissibly infringe upon Executive Branch discretion. Citizens for aBetter Environment v. Gorsuch. Indeed the United States ability torestrict itself and enter into binding commitments is a "competenceattaching to sovereignty." Perry v. United States, 294 U.S. 330, 353, 55S.Ct. 432, 436, 79 L.Ed. 912 (1935), rejecting the contention (much akinto that the United States seeks to advance here) "that the Governmentcannot by contract restrict the exercise of a sovereign power."

154. Board's rights against the United States are embodied in a consentdecree, a judgment that can be fully enforced by this Court. UnitedStates v. City of Miami, 664 F.2d 435, 439-40 (5th Cir. 1981) (percuriam). Even were Section 15.1 viewed as a simple contract, the UnitedStates' promise would remain fully enforceable (though in that eventenforcement might be relegated to the Claims Court, 28 U.S.C. § 1491(a)(1)). Litigation to enforce government contracts recognizes both (a)the general potential for contractual liability even when the UnitedStates exercises "sovereign" powers and (b) the specific "validity of aduty to obtain funds" when the United States contracts to do so.Municipal Leasing Corp. v. United States, 1 Cl.Ct. 771, 774 n. 2 (1983);S.A. Healy Co. v. United States, 576 F.2d 299, 306-07, 216 Ct.Cl. 172(1978); D & L Construction Co. and Associates v. United States,402 F.2d 990, 999, 187 Ct.Cl. 736 (1968) (per curiam); Gerhardt F. MeyneCo. v. United States, 76 F. Supp. 811, 815, 110 Ct.Cl. 527 (1948).

155. This and the next two Conclusions confirm that no othercharacteristics of a nonjusticiable political question are present inthis case. There are "judicially discoverable and manageable" standardsfor evaluating the Executive Branch's legislative activities. Baker v.Carr. Its specific actions to meet its commitment to Board will beempirically verifiable, for terms such as "every good faith effort,"which describes the Executive Branch's duty, are frequently used todescribe legal obligations and are routinely enforced by courts. See,United States v. McAndrew, 480 F. Supp. 1189, 1193 (E.D.Va. 1979) (orderrequiring "reasonable efforts" sufficient to support contempt finding).

156. Enforcement of the Executive Branch's duty to make legislativeinitiatives will not involve this Court "in policy decisions". Baker v.Carr. It was the Executive Branch itself that decided thethen-contemplated litigation with Board should be settled immediately onthe terms embodied in the Consent Decree. This Court's enforcement ofthat agreement does not involve it in evaluation of the policy judgmentsof the Executive Branch. See, Citizens for a Better Environment v.Gorsuch.

157. Finally in the "political question" analysis, judicial enforcementof the Executive Branch's commitment does not show any "lack ofdeference" to a coordinate branch of Government. Baker v. Carr. Quite theopposite is true. Throughout these proceedings, the considerable deferenceshown the Executive Branch by both this Court and Board has beenconsistently exploited by the United States obstructionism. Under thecircumstances, it is entirely proper for this Court to enforce the fullsubstance of the United States obligation.

Means of Enforcement

[50] 158. At this point the rights and duties of the parties have beendefined. It remains to address the most appropriate means ofenforcement. This opinion is not accompanied by an order for threereasons:

(a) to enable the parties to consider the full scope and implications of this opinion;

(b) to enable the United States (consistently with the forebearance this Court and the Court of Appeals have previously extended to it as a litigant) promptly to advise this Court and Board of its response to its obligations as defined in these Findings and Conclusions; and

(c) to enable the parties promptly thereafter to tender proposals for an appropriate order.

Nonetheless it makes good sense now to address some aspects of theenforcement issues.

159. Because the United States failed to provide available funds oradequate funding to Board for school year 1983-84, and because the UnitedStates otherwise failed to comply with its obligations for that schoolyear under the Consent Decree and as determined by this Court and theCourt of Appeals, the United States has not yet effectively begun to meetits funding obligations.

160. These Findings and Conclusions have often made reference to theExecutive Branch. But the litigant here is the United States, and theConsent Decree is a bindingobligation of the United States as such, not of the Executive Branch(which is after all not a legal entity). As established in these Findingsand Conclusions, the Executive Branch has persistently sought to renderfunds un available to Board, and it has succeeded in so limiting thecurrent availability of funds that it has undermined the United Statesability to comply fully with the obligation contained in Section 15.1.Considering those violations, by which the Executive Branch hasdeliberately disabled itself from complying with Section 15.1, this Courtnow determines the current obligation of the United States remains one ofproviding Board with an amount adequate for implementation of the Plan inschool year 1984-85. As Conclusion 158 indicates, considerations ofcomity and separation of powers dictate that this Court defer (briefly,to be sure) its determination as to the means necessary to ensure thatthe Executive Branch will attempt to meet that obligation.

161. To be entitled to permanent injunctive relief, a plaintiff notonly must prevail on the merits of its claim but also must carry theburden of what "is often referred to as balancing the equities or asdrawing the balance of convenience." 7 Moore's ¶ 65.18[3], at65-136. As the Supreme Court put it in Beacon Theatres, Inc. v.Westover, 359 U.S. 500, 506-07, 79 S.Ct. 948, 954-55, 3 L.Ed.2d 988(1959):

The basis of injunctive relief in the federal courts has always been irreparable harm and inadequacy of legal remedies.

Moore's explicitly, and Beacon Theatres implicitly, suggests the DistrictCourt considering a permanent injunction could well apply the samecriteria our Court of Appeals has consistently announced as required forpreliminary injunctive relief (Godinez v. Lane, 733 F.2d 1250 at 1257 (7thCir. May 9, 1984)), of course substituting actual victory on the meritsfor a mere reasonable likelihood of success.

162. Application of those principles to the present case demonstratesBoard has borne its burden with regard to each of those criteria:

(a) Board has prevailed on the merits of its claim and has established that the United States has violated and continues to violate its binding and enforceable obligations under the Consent Decree.

(b) Board has demonstrated the balance of equities weighs in favor of the grant of injunctive relief, inasmuch as:

(1) Board has no adequate remedy at law.

(2) Board faces irreparable injury in the absence of injunctive relief, because it will most likely be unable to meet its Consent Decree obligations absent such relief and because its Consent Decree obligations will be effectively varied and enlarged.

(3) No substantial hardship is imposed on the United States by the grant of permanent injunctive relief directing compliance with the Consent Decree to which it voluntarily agreed. Any hardship certainly does not outweigh the injury to be inflicted upon Board if such an injunction is not granted.

(4) Surely the public interest is best served by granting permanent injunctive relief. In particular, the public interest in assuring full and adequate implementation of the Plan, in preserving the integrity of the Consent Decree and in protecting the dignity and power of this Court would be served.

(c) There should be no difficulty in shaping a form of injunctive relief that is appropriate, narrowly tailored and adequate to protect Board's rights.

Accordingly, Board satisfies all of the requirements for permanentinjunctive relief.

1. In the law that term is most commonly used in choice-of-lawproblems, reflecting the theory of analysis with which Proffessor DavidCurrie is most often associated. See, e.g., In re Air Crash Disaster NearChicago, Illinois on May 25, 1979, 644 F.2d 594, 605, & n. 2 (7th Cir.1981).

2. Someone has given the educators in the State of New Hampshire theidea this court should be appealed to because the New Hampshire affiliateof the National Diffusion Network, funded by the United States Departmentof Education (the "Department") ran out of funds May 11, 1984. To date,11 separate letters, have come in about the loss of a program that(though this Court is not itself an educator) sounds highly worthwhile.If the United States will not be candid and acknowledge that this baby,and all the other orphans created by the United States intransigence,must be laid at its doorstep and not that of this Court, either thisCourt or someone else ought to make that clear.

3. 567 F. Supp. 272 (N.D.Ill. 1983) ("Opinion II"), followed by thecontemporaneously issued June 30, 1983 "Order," id. at 285.

4. 717 F.2d 378 (7th Cir. 1983) ("Opinion III").

5. More accurately, Section 15.1 is part of Part I of the ConsentDecree. For convenience all references in this opinion to the ConsentDecree will omit "Part I," and whenever the following Findings andConclusions refer to "Section —" without identifying a document,the reference is to that section of Part I of the Consent Decree.

6. That phrase is one with an honored history in a somewhat different— though this time closely-related — legal context. It iscustomarily used to describe the situation of the party that, havingviolated a court order, is sentenced to confinement until he or shecomplies with that order. Gompers v. Buck's Stove & Range Co.,221 U.S. 418, 442, 31 S.Ct. 492. 498, 55 L.Ed. 797 (1911) ("he carriesthe keys of his prison in his own pocket"). of course the parallel to thepresent case is too obvious to require spelling out.

7. To the extent congressional action was required to free up funds,but might not have been obtained because of competing considerations thatCongress might have deemed more important despite a request from theadministration, the United States as a litigant could not be faulted orheld liable for a violation of Section 15.1. However the United States'conduct has poisoned the well by violating its agreement "to make everygood faith effort to find and provide every available form of financialresources," and it cannot therefore excuse itself by pointing tocongressional attitudes created by its own flouting of its contractualobligations.

8. United States v. City of Miami, 664 F.2d 435, 439-40 (5th Cir.1981).

9. EEOC v. Liberty Trucking Co., 695 F.2d 1038, 1043 (7th Cir.1982).

1. As well as in magnet schools (§ 4.1.2) and desegregated schools(§§ 10.1 and 10.4).

2. Moreover, Stipulations 101-02 and the extrinsic evidence offered bythe Government, in the form of its correspondence file, reflect that inthe spring of 1980, the former counsel representing a former Board werepreoccupied with the potential amount of an ESAA grant that might begenerated if the parties could agree on the specific parameters of astudent assignment plan. However, after a new Board took office andretained new counsel, the negotiations took a sharply differentdirection, leading to agreement on a general funding principle notincorporating any previous specific discussions.

3. Two other sub-categories are also identified: (a) stable mixedschools having a small but relatively constant enrollment of whitechildren and (b) schools whose enrollment composition is currentlyracially mixed but is projected to become racially identifiable.

4. All the enrollment data in Findings 130 through 134 excludespre-school and kindergarten children.

5. To reflect this increase, an appropriate adjustment was made in theteacher salary and career service salary cost categories set forth in thebudget sheets included in Board Ex. 117.

6. Part of the money budgeted by Board for incremental desegregationexpenditures is attributable to State Title I school aid. State Title Iaid constitutes that portion of Common School Fund State Aid (or generalstate distributive aid) distributed to Illinois school districts based onthe number of economically disadvantaged or "Title I eligible" studentsenrolled in each district. Addendum A attached to these Findings(following Finding 376) describes the relationship between State Title Ischool aid and desegregation expenditures. (Bacchus Testimony)

7. In recent fiscal years Board has taken a series of actions to placeits taxes on a more "cash-current" basis and reduce the amount of "leviedbut unbilled" taxes. Those actions have played a significant role inreducing or eliminating budget deficits originally projected for thosefiscal years.

8. Regulations promulgated by the Authority regarding the definitionand determination of a "balanced budget" essentially require that Board'sproposed expenditures be supported on a cash basis. Thus the "extensionrate" amendment-which generated approximately $100 million in additionalcash receipts for fiscal year 1983-84-had a significant impact onelimmating Board's originally projected budget deficit for thisyear.

9. All references are to documents in Board Ex. 118.

10. In fact the initial funding source for such programs was and isgenerally not determinable. Prior to the imposition of the State Title Itargeting requirement, all Common School Fund State Aid, including StateTitle I aid, was included without differentiation in Board's generalresource base.

11. Certain 946/947 expenditures are considered to have been fundedfrom "reallocated" State Title I resources in the sense that, as of the1981-82 school year, such resources would not have been required,pursuant to revised or modified Board staffing formulae, to have beenspent at the schools receiving such resources even if such schools hadreceived such funding or portions thereof in prior school years.

12. Board's other source of funding for those programs was a portion— approximately $10 million — of other general Boardresources. Those funds and related programs are identified by "ProjectCode 163".

13. In addition, Board, in school years 1982-83 and 1983-84, hascontinued to fund implementation of a portion of the EducationalComponents with approximately $10 million per year of other general Boardresources (identified, as described above, by "Project Code 163"). Moreover, in school year 1983-84, Board increased its incrementaldesegregation appropriations by $10 million (identified by "Project Code496") — with approximately $8 million of that amount being used toexpand the implementation of the Plan's Educational Components.

14. 512 refers to employee salaries and related expenses and 513refers to expenses for instructional materials. For convenience, theseFindings lump the expenditures collectively as "512".

15. This conclusion may have been subject to reexamination if thisCourt were unable to "verify" the availability of funds (id. at 383 n.8). These Findings and Conclusions have foreclosed thatpossibility.

16. It was clearly the United States obligation to do all the spadework for this purpose, consistent with its duty "to find and provide"under Section 15.1. Here too the United States has breached itscommitment, so it has been Board that has from the outset scrutinized therelevant appropriations bills, statutes and regulations to identifyavailable funds for the United States and that has now identified furtheravailable funds as set forth below.

17. This Court recognizes that (a) most of those funds areappropriated by Congress primarily for various operational or similarcosts necessary for the functioning of the Department of Education and(b) just as funds necessary for Board's basic operations and obligationsare not available for the Plan (see Conclusion 26), those funds are not"available" to the extent reasonably necessary for the Department'soperations. Thus this Conclusion's determination such funds are"available" is qualified by the condition that the Department may showthat some (or perhaps even all) those funds are not available becausethey are necessary for Department operations. In any event, theidentification of such funds by Board is a particularly apt illustrationof Board's having performed a function the United States is obligated toperform under Section 15.1 and the prior orders of this Court: identifyingevery available form of financial resources.

18. Department of Education's Office for Civil Rights contracts withother organizations to provide technical assistance to local educationalagencies to assist them in complying fully with Title VI requirements.S.Rep. No. 247, 98th Cong. 1st Sess. 163-64 (1983). That technicalassistance program was created by the Office for Civil Rights pursuant toits authority to make any payments necessary to carry out its complianceand enforcement functions. 20 U.S.C. § 3413 (c)(3); P.L. 98-139,Title III, 97 Stat. 895.

19. This discussion does not address any questions of validity of suchan enactment — only its meaning.

20. Thus, with respect to available funds, the Executive Branch hasnot even afforded its obligation to Board equal status with its desiresto use the funds otherwise. It has not even tried to fund Board's needsin the same proportion as it funded other applicants.