UNITED STATES v. BOARD OF EDUC. OF CITY OF CHICAGO

No. 80 C 5124

588 F. Supp. 132 (1984) | Cited 0 times | N.D. Illinois | June 8, 1984

JUNE 8, 1984 OPINION — TABLE OF CONTENTS

Pages

BACKGROUND 138-140

I. FINDINGS 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 Desegregation Expenditures 301-12 180-186

1983-84 Ancillary Desegregation 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

Board's 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

Separation 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 artificiallimitation on funds otherwise available or potentially availableto satisfy the extensive Desegregation Plan needs of Chicago'sBoard of Education (let alone the varying needs of otherclaimants of funds), the United States has sought to place theBoard (and this Court) into a position as though the Board (andthis Court) were choking off deserving educational programs.2That is simply not true. It is the United States itself that hascreated 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 keepthe promise it made on the day this lawsuit was filed, ConsentDecree § 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 —because the concerns created by considerations such as separationof powers and sovereign immunity tend to prevent its promisesfrom being fully enforced in precisely the same way as promisesof (say) IBM or other private defendants. For that reason thisCourt has previously been compelled to impose a "freeze" order toavoid the risk its ability to order relief will arguably befrustrated. Because the United States has deliberately violatedits original agreement to fund the Chicago Desegregation Plan,this Court has reluctantly found it necessary to prevent thedistribution to other possible grantees of United Stateseducational funds, in order to preserve access to all the dollarsthat would be potentially available to fund the honoring of theUnited States' freely-undertaken (and then freely-broken)obligation to the Board.

But as this Court has said during the course of hearings onthis issue, the United States "has the key to its cell in its ownpocket."6 It could have, in the exercise of its "every good faitheffort," assured that all the needed funds would be potentiallyavailable to the Board by (1) shifting available dollars to theBoard to the fullest extent possible without congressionalapproval or (2) going to Congress with a request to allow theshifting of dollars that were already available to the Departmentof Education, but that required reallocation because they werenot in fact going to be used for the purposes that had been thesubject of the original allocation.7 It could have done boththose things if necessary. Instead the United States has chosento pit deserving applicants for funds one against the other, andto put the issue before Congress as though the Board and thisCourt — rather than the United States as the breaker of its ownvoluntary promise — were the malefactors.

One other related point should be emphasized at the outset.Section 15.1 is part of a consent decree. Like every consentdecree, it has a twofold aspect.8 It is of course a contract —and as a contract, it is enforceable to require the contractingparties to perform their voluntarily undertaken duties. Becauseunlike most contracts the parties have chosen to submit it forthe stamp of court approval, it is also 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 thislong opinion, a private litigant that did what the United Stateshas done would unquestionably be held in contempt — with thepotential for being subjected to a fine or imprisonment as wellas to an order for civil compliance. But for the United States acontempt fine is meaningless — after all it is the publicinterest (and not the injured opposing party) that is vindicatedby a fine, with the money going to the United States itself assurrogate for the public. Thus imposition of a fine against theUnited States would just transfer money from one federal pocketto 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 solemnlyundertaken responsibilities becomes all the more important, andits deliberate flouting of those responsibilities becomes all themore unpardonable.

Now the legal rights of the litigants have to be evaluated.This opinion has not been drafted in response to the UnitedStates' conduct just referred to, but that conduct may have madethe issues more clouded than would otherwise have been the case.

This Court now has before it the evidence developed inextensive hearings on remand from the Court of Appeals' decision("Opinion III," see n. 4) confirming the United States' violationof Section 15.1. Although the Court of Appeals did that, it alsovacated the part of this Court's June 30, 1983 order (the"Order," issued contemporaneously with "Opinion II," see n. 3)that had directed the United States to undertake an affirmativeprogram to preserve the availability of funds potentiallyavailable to fulfill its obligations under the Decree. As theCourt of Appeals put it (717 F.2d at 384), this Court had "actedwith excessive dispatch" in doing so. This Court of course hadshared the respect for separation of powers that underlay theCourt of Appeals' opinion. This Court's fault, if it was one, wasin a skepticism (grounded in prior conduct by the United States,not in mere surmise) as to whether the United States would infact "fashion its proposed remedy for past non-compliance, aswell as . . . show that it intends to comply in the future . . ."(717 F.2d at 385).

As the following findings of fact ("Findings") and conclusionsof law ("Conclusions") will reflect, this Court's anticipatorydoubts were unfortunately all too justified. Now the Departmentof Education has been given the opportunity mandated by the Courtof Appeals, and it has failed its charge dismally. In accordancewith Fed.R.Civ.P. ("Rule") 52(a), this Court sets forth theFindings and Conclusions that constitute the grounds of itsaction 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 thirdlargest public school system in the United States. In the 1980-81school year Board operated 634 schools, including 495 elementaryschools, 66 high schools and 73 special needs schools of varioustypes. In October of that school year Board had 458,497 students,whose racial/ethnic makeup was as follows:

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,including 29,000 members of the Chicago Teachers Union. Board isthe largest employer in Chicago and the second largest inIllinois. (Stip. 101)

102. After protracted and complex negotiations, the UnitedStates and Board entered into a Consent Decree, which was filedwith and approved by this Court September 24, 1980. (Stip. 102)Findings 103-04 give the background of the Consent Decree.

103. After desegregation negotiations in 1979 between theformer Department of Health Education and Welfare and the formerrepresentatives of Board had proved unsuccessful, the UnitedStates Department of Justice notified former InterimSuperintendent of Schools Caruso on April 21, 1980, that iffurther negotiations were not successful, the United States wouldinitiate a desegregation lawsuit against Board. (GX1-27[Government Exhibit 1, June 1983 hearing, Document 27]) Ensuingnegotiating sessions between the Department of Justice and formerBoard representatives primarily addressed whether the partiescould agree on specific racial percentages for a studentassignment plan and on the specific amount and timing of theEmergency School Aid Act (ESAA) funds that the Board wouldreceive to implement such a plan. (GX1-21,22) Board counselindicated that if the negotiations failed and litigationcommenced, Board would present counterclaims against agencies ofthe federal government. (GX1-39) There was no significantprogress in those negotiations. (GX1-21, GX1-22) (Stip. 103)

104. During those negotiations a new Board was appointed andtook office. (GX1-22) That new Board formed a DesegregationCommittee (GX1-21) and indicated to the United States it wouldbring fresh approaches to the negotiations (Id.) Thereafter Boardwas represented by its new leadership and by new counsel.(GX1-16) Negotiations then progressed rapidly, leading to a draftagreement within a few weeks (GX1-16) and to consummation of theConsent Decree within another six weeks. (GX1-14, 15) Thatprogress resulted from an altogether different focus. Rather thanseeking to negotiate the specific terms (or even somewhat moregeneralized terms) of a student assignment plan, the partiesinstead agreed to general principles that would guide subsequentdevelopment of a plan. (Consent Decree, Part I) Correspondinglywith respect to funding, the parties negotiated a generalprinciple applicable to both parties. Those negotiationsconcerning the general funding provision have been described ina 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 theConsent Decree 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 consideration 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 ConsentDecree to guide subsequent development of a desegregation planwere the following:

§ 2. Basic Objectives

2.1 Desegregated Schools. The plan will provide for 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 providefinancial resources "adequate for implementation of thedesegregation plan," the United States was agreeingto help pay for a plan that would include educational componentsin racially isolated schools (§ 2.2)[fn1a] covering the subject matteroutlined in § 7, in the development of which the Board wouldexercise discretion (§ 3.1). (Stipulations 101-06)

108. Circumstances surrounding entry of the Consent Decreeindicate that a joint and mutual obligation was contemplated. TheConsent Decree represents the only instance in which a majorurban school system has agreed, without any litigation ordetermination of liability issues, to develop and implement asystem-wide desegregation plan under court supervision. Itcontemplated that because of the demographics of the Chicagoschool system, a substantial number of minority children wouldinevitably remain in racially isolated schools, requiring theextensive and expensive use of compensatory educational remediesto alleviate the effects of past segregation. In 1980 (as now)Board was faced with massive financial deficits, and the jointfunding provision of the Consent Decree reflected recognitionthat Board's finances were such that it could not voluntarilyagree to develop, or successfully to implement, an effectivedesegregation plan of this type unless the federal governmentwere 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 overridinggoal of assuring that an effective desegregation plan wasdeveloped and implemented in Chicago. This joint purpose, withrespect to financing, included a requirement that the partiesprovide the total amount of funds adequate for implementation ofthe Plan. In Section 15.1 each party agreed to do everythingpossible to supply the necessary funding. (Stipulations 101-56;June 1983 Findings and Plan/ADR data on Board finances) TheUnited States' financial commitment under Section 15.1 was theprincipal quid pro quo for Board's willingness to foregolitigation and develop the Plan. In return for that commitment,the United States secured the full result it sought (and may nototherwise have achieved) without the expense and delay of complexlitigation. The United States also avoided potential liabilityfor a number of counterclaims that would have been broughtagainst it. (Findings 103, 105)

110. With respect to "what the parties reasonably expected atthe time of signing," the parties' Joint Stipulation(Government's Exhibit 2 in the June 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 supportany notion that there was a recognized specific dollar limitationincorporated in Section 15.1, based on the amount of previousESAA grants or otherwise. Indeed the Joint Stipulation reflectsthe parties had been discussing "funding possibilities relatingnot only to the Department of Education (including ESAA and otherprograms), but also other federal agencies such as the Departmentof Justice, the Department of Transportation, and the Departmentof Housing and Urban Development."[fn2a] As this Court has determinedpreviously, the extrinsic evidence points to an obligation toconduct a "universal search" (567 F. Supp. at 282 n. 6), not alimited examination of what ESAA fundingwas theoretically available to Board. (Stipulations 101-06;Government Exhibits 1 and 2 in the June 1983 hearing) This doesnot of course mean the parties contemplated issuance of a blankcheck to Board by the United States. But given the circumstancesof the negotiations, Board's known financial difficulties, itsinability to generate funds without the approval of othergovernmental agencies, the known major problems (and hence majorcosts) of implementing a desegregation plan in a school system aslarge as Chicago's (and with its racial mix), and other relevantfactors, the parties' reasonable expectations should certainlyhave embraced the potential need for the United States regularly"to find and provide" sums of the magnitude represented byBoard's proof at the current hearing. Although this Court ruledin limine (prior to the current hearings) certain areas of proofby the United States would be excluded, this Court hasnevertheless given full consideration to (a) the United States'offer of proof suggested by this Court as the means to completethe record and (b) Board's post-hearing response to that offer ofproof. Even taking that offer of proof fully into account (ratherthan treating it as excluded) this Court finds nothing in theUnited States' proof or proposed proof persuasively refutes thereasonableness of the expectations referred to in this Finding.Given the parties' Joint Stipulation that Section 15.1's "generalobligation . . . would be interpreted and applied as appropriatein whatever future circumstances might arise," this Court findsthe current circumstances make the interpretation of thatobligation to embrace the Board's current request (as modified bythis opinion) to be wholly appropriate for funding by the UnitedStates.

111. The Consent Decree in this case is the only instance inwhich the United States has entered into a desegregationsettlement containing the same or substantially similar languageto 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, Boardretained a team of independent, nationally recognizedconsultants. Dr. Robert L. Green was the Lead Consultant, withprincipal overall responsibility for the process. Dr. Green (nowthe President of the University of the District of Columbia) wasthen Dean of the College of Urban Development, Michigan StateUniversity. He was a leading national expert on desegregationplans, especially the aspect of desegregation that emphasizeseducational programs to provide equal and effective education forurban and minority children. Dr. Green had participated in manydesegregation cases and desegregation plans, traditionally as anexpert for the plaintiffs in such litigation, and frequently onbehalf of the NAACP. (Stip. 108) In addition to Dr. Green, fiveother education experts from outside the school system wereretained on a full-time basis to work on the EducationalComponents, along with 24 part-time "national consultants."Professor Ronald Edmonds (who has since died) was the primarynational consultant in the area of curriculum. While on thefaculty of the Harvard Graduate School of Education, Dr. Edmondshad directed the well-known major research project, Search forEffective Schools: The Identification and Analysis of CitySchools That Are Instructionally Effective for Poor Children.Professor Edmonds had also implemented his "effective schools"design as the principal instructional officer for the New YorkCity schools, with the title of Senior Assistant for Instruction.

113. Board's complete list of desegregation project consultantsis as follows:

Robert L. Green, Ph.D., 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

Judson 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,Northeastern Illinois University SuperintendentChicago, IL Benton Harbor Public Schools 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 PolicyHealth 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 YarlottUnivesity of Wisconsin Minneapolis Public SchoolsMilwaukee, WI Minneapolis, MN

(Stip. 109)

114. During the development of the Educational Components fromNovember 1980 through March 1981, Board submitted monthlyprogress reports to the Department of Justice, as required by theConsent Decree. (Stip. 110)

115. Dr. Green submitted his Recommendations on EducationalComponents to Board April 3, 1981. Two weeks later theRecommendations were adopted by Board as Part I of theDesegregation Plan: Educational Components. Part I's content issummarized 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 Desegragation and Affirmative Action

4. Evaluation

5. Monitoring

E. Appendix

(Stip. 111)

116. The following statements about Plan costs appeared atpages 17 and 19 of the "Financial Aspects" section in Part II ofthe Plan, adopted in April 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 programswere administered by a staff of three persons. Shortly after theinitial adoption of the Educational Components, Board created aspecial Office of Equal Educational Opportunity ("OEEO") tocoordinate the implementation of the Plan. OEEO is presentlyheaded by Dr. Nelvia Brady, Associate Superintendent, who was amember of Dr. Green's original desegregation planning staff.OEEO's office staff has expanded continuously since 1981 andpresently comprises 53 persons, of whom eight are clerical staff,eight are teachers (who are district-assigned), 13 areschool-committee representatives and 24 are teachers (7) andadministrators (17) assigned to the central office. Twenty-nineof the 40 education professionals (72.5%) have their principalresponsibilities in the area of implementing the EducationalComponents of the Plan. (Stip. 113)

Statements of the United States and this Court Relating to theEducational Components

118. On June 3, 1981 Attorney General William French Smithdelivered an address before the American Law Institute. Indiscussing the policy of the United States as to desegregationremedies, Mr. Smith stated (at 8-9):

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 henceforward 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 DesegregationPlan, filed in July 1981, the United States made the followingcomments about the 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 submittedtheir Joint Statement to the Court as to the development of thePlan. With respect to the Educational Components, the JointStatement (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 WilliamBradford Reynolds delivered a speech to the Education Commissionof the States, meeting in Chicago. In discussing the policy ofthe Department of Justice concerning 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 progressreports to the United States and to the Court, detailing theprocess of implementing the Plan, including the EducationalComponents. (Stip. 118)

123. In February and March 1982, following the adoption ofBoard's Comprehensive Student Assignment Plan, the Courtentertained briefs concerning the compliance of the total Planwith both constitutional requirements and the Consent Decree. TheUnited States Assessment of the Plan commented on the EducationalComponents as described in Finding 139. The Chicago UrbanLeague's Assessment of the Plan expressed strong concern aboutthe need to provide significant extra funding for implementationof the Educational Components in racially isolated schools:

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 onlycommitted itself to provide "Milliken II relief" to the extentthat funds are available. NAACP's July 1981 memorandum on thePlan stated "we have no specific objection to the content ofthese programs." NAACP's March 1982 brief did not comment furtheron the Educational Components. (Stipulations 119, 133)

124. On January 6, 1983 this Court issued its opinion ("OpinionI," 554 F. Supp. 912) approving Board's Plan as being clearlywithin the broad range of constitutionally acceptable plans. Withrespect to the Educational Components and funding, Opinion Istated (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 (filedApril 15, 1983) contained a section on "Financial Aspects" at402-23, which included 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 atleast $40 million on the Educational Components in raciallyisolated schools and on the desired expenditure of additionalamounts for these purposes, including the statements described inFindings 116 and 125, do not reflect any determination by Boardeither that the expenditure of $40 million would be "adequate"for that aspect of the Plan (in terms of Section 15.1) or thatthe expenditure of additional amounts for that aspect of the Planwould not materially aid its success or would not be necessaryfor 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 detailon the implementation of the EducationalComponents ("ADR II"). After the filing of ADR II this Courtprovided the United States and the amici curiae the opportunityto file comments. Neither the United States nor any of the amicifiled comments with the Court. (Stip. 122)

128. As the preceding review of the record reflects, the UnitedStates (a) strongly supported (indeed, insisted upon theinclusion of) Board's Educational Components as the developmentalprocess moved from the Consent Decree principles to the April1981 Educational Components Plan to approval by this Court and(b) raised no subsequent objection as Board proceeded to addprogrammatic details to those initial documents. Only when calledupon 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 asystem-wide desegregation plan with two basic objectives. Section2.1 called for creating the greatest practicable number of stablydesegregated schools, considering all the circumstances inChicago. As already described, the second objective was toprovide educational and related programs for schools thatremained racially isolated. (Stip. 123)

130. In January 1982 Board adopted its Comprehensive StudentAssignment Plan, which divides all schools in the school systeminto four broad categories. First of those categories is that ofthe residentially integrated school (defined as one whoseenrollment includes at least 30% white children and 30% minoritychildren, derived principally from residential or other naturalattendance patterns). Two basic types of schools come within thatcategory: (a) stably integrated and (b) integrated but withpotential for change. There is a third type of school identifiedin the Plan: currently integrated, but with an enrollment ofwhite children projected to decline below 30%.[fn3a] As of October1981 those three types of schools encompassed 67 schools with anenrollment of 52,067 students.[fn4a] (Stip. 124)

131. Next the Plan considers the category of the desegregatedschool: one whose enrollment includes at least 30% white childrenand 30% minority children, and which has been establishedprimarily by student assignment techniques under the Plan. Thatcategory includes both (a) schools that have previously achievedstably desegregated status through the implementation of variousstudent assignment measures (as of 1981, 42 schools with 20,329students) and (b) schools that in 1981 were yet to achievedesegregated status, through previously existing and newlyadopted student assignment techniques (in 1981, 33 schools with17,541 students). Such techniques include voluntary transferprograms and magnet and magnet-type programs within schools.(Stip. 125)

132. In addition the Plan describes various magnet-typeschools, which are established primarily in minority communitiesand are designed to promote desegregation by special educationalofferings and programs. Each such school has a target enrollmentcomposition, generally 15-35% white, 65-85% minority. In 1981such schools included 41 magnet schools, scholastic academies andmetropolitan high schools, enrolling 28,824 students. (Stip. 126)

133. Finally the Plan also considers schools projected toremain racially identifiable (with an enrollment of greater than70% minority children, less than 30% white children). In 1981there were 354 such schools, enrolling 275,794 students. Afterdescribing why those schools cannot practicably be desegregated,the Plan describes the compensatory educational arrangements thatwill be provided for at thoseschools and the various voluntary transfer arrangements in whichstudents enrolled at those schools may participate. (Stip. 127)

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

1981 Integrated 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 was that every school achieve by October 1983 a minorityenrollment of at least 30%. Under the other, by October 1983 theschool system as a whole had to achieve a minimum totalenrollment in all integrated and desegregated schools (includingmagnet schools). This latter requirement is generally referred toas the "desegregation index" requirement. (Stip. 129)

136. Additionally the Plan sets forth other student assignmentprovisions to be applied throughout the school system to provideand maintain the maximum practicable desegregation and to ensurethat the Plan will not initiate or authorize any segregativeactions. Among such provisions are those concerning schoolclosings, boundary adjustments and within-school segregation.(Stip. 130)

137. In a separate volume, the Student Assignment Plan containsschool-by-school analyses for each school in the system. Thoseanalyses describe in summary terms the work and considerationthat went into developing a desegregation strategy for eachschool. They also provide a detailed statement as to why it isnot practicable to desegregate a large number of schoolsremaining racially identifiable. (Stip. 131)

138. Detailed evaluation of the student assignment component ofthe Plan, including analysis of enrollment composition andprescription of specific actions for over 200 individual schools,is undertaken every year. Each such evaluation is reported on inan Annual Desegregation Review ("ADR"). (Stip. 132)

139. After the adoption of the Comprehensive Student AssignmentPlan in January 1982, the United States filed its 33-pageAssessment of the Plan. It explained the United States' beliefthat the Plan is constitutional and consistent with the ConsentDecree. In conclusion the United 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 systemwide 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 incorporatedthe Board's summary of its extensive and effective activities inthe 18 months from the entry of the Consent Decree to theadoption of Part III of the Desegregation Plan. This Courtfurther noted it had deferred ruling on the Plan for severalmonths, so that the promisesof the Plan could be "test[ed] in the crucible of reality." Inlight of the fall 1982 implementation results, this Court found"nothing in the execution of the Plan has been shown to disprovethe premises on which it was designed" (id. at 915). Finally,having reviewed the Plan in detail, this Court approved it asbeing "clearly within the broad range of constitutionallyacceptable 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 Plan during school year 1982-83 was aconsiderable success and (b) to a very significant degree itsprojections of student assignment outcomes had been realized. ADRI was also candid in its assessment of shortcomings and inadopting measures to address them. (Stip. 135)

142. In its May 1983 response to ADR I, the United Statesfavorably evaluated the Board's substantive implementationprocess (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 theStudent Assignment Plan became applicable as of October 1983.While the formal evaluation of the results of the Plan in the1983-84 school year is not yet due to be filed, Board filed aReport Concerning Preliminary Fall 1983 Enrollment Data onNovember 2, 1983, informing this Court that the requirement of30% minimum minority enrollment in all schools had been met.(Stip. 137)

144. For comparison with Finding 134, the following table showsfall 1983 data as to the number and total enrollment of thevarious school types identified in the Plan. Those data arecomparable with Finding 134, but it should be noted that therehas been some recategorization of schools to reflect theexperience of the past two years. As in Finding 134, the figuresexclude kindergarten students; therefore the total enrollmentshown is for grades 1-12, 41,260 students less than systemwideenrollment.

1983 Integrated 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 PublicSchools

145. Extensive demographic information is presented in both theComprehensive Student Assignment Plan (at 8-39) and in 1983 ADRI (at 20-23). (Stip. 139)

146. Racial composition of the total population of the City ofChicago from 1940 to 1980 is summarized in the following table:

White Non-White Total Year No. % No. % No.

1940 3,115,000 91.7 282,000 8.3 3,397,000 1970 2,208,000 65.6 1,159,000 34.4 3,368,000 1980 1,311,000 43.7 1,694,000 56.3 3,005,000

(Stip. 140)

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

Chicago Public Schools

Racial/Ethnic Composition 1970-1983============================================================================ | | White | Black | Other | Hispanic | |--------------|--------------|------------|------------- Year | Membership | No. % | No. % | No. % | No. %------|------------|--------------|--------------|------------|------------- 1970 | 577,679 | 199,669 34.6 | 316,711 54.8 | 4,925 .9 | 56,374 9.7 1971 | 574,495 | 188,312 32.8 | 320,797 55.8 | 5,608 1.0 | 59,778 10.7 1972 | 558,825 | 173,143 31.0 | 317,975 56.9 | 5,729 1.0 | 61,978 11.1 1973 | 544,971 | 160,846 29.5 | 314,089 57.6 | 6,306 1.2 | 63,730 11.7 1974 | 536,657 | 151,290 28.2 | 310,880 57.9 | 6,535 1.2 | 67,952 12.7 1975 | 526,716 | 141,264 26.8 | 307,549 58.4 | 7,589 1.5 | 70,314 13.4 1976 | 524,221 | 130,785 24.9 | 311,261 59.4 | 8,343 1.6 | 73,832 14.1 1977 | 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 16.1 1979 | 477,339 | 95,513 20.0 | 289,920 60.7 | 9,958 2.1 | 81,948 17.2 1980 | 458,497 | 85,292 18.6 | 278,726 60.8 | 10,253 2.2 | 84,226 18.4 1981 | 442,889 | 76,112 17.2 | 269,019 60.7 | 11,003 2.5 | 86,755 19.6 1982 | 435,843 | 71,171 16.3 | 264,530 60.7 | 11,396 2.6 | 88,746 20.4 1983 | 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 ishigher among public school students than among the overall citypopulation is that a large number of children (more than half ofwhom are white) attend nonpublic schools in Chicago, especiallythe Catholic parochial schools. Their metropolitan-areaenrollment of nearly 190,000 students makes the Catholic schoolsthe fifth largest school system of any kind in the United States.Within Chicago the Catholic schools as of 1982 had 226 schoolsenrolling 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 leveledoff this year after 15 years of decline that were oftencharacterized by very substantial drops. This year's decline intotal membership is only about 1800 (0.4%), compared with almost19,000 (3.9%) in 1980. As a historic matter, enrollment was372,278 in 1952. Student membership increased quite dramaticallyin the 1950s and the 1960s, reaching a peak of 580,292 in 1969.Since then enrollment has declined, generally at the rate of 2-4%per year, with the greatestdeclines between 1977-81 (over 15,000 students, or 3-4%, peryear). In 1982 the decline was 1.6% (7046 students), ascontrasted with the slight drop in 1983. (Stip. 143)

150. Enrollment of white students (now 67,829 or 15.6%systemwide) has declined at a significantly slower rate sinceadoption of the Plan. From 1977-81 white enrollment declined at9-11% per year (or 10,000-12,000 students). In 1982 whiteenrollment declined 6% (4,941 students) and in 1983, 5% (3,342students). (Stip. 144)

151. Black students now number 263,163 (60.6% systemwide). Aswith total enrollment and with white students, 1983 decline inblack enrollment of 1,367 students (0.5%) is significantly lowerthan declines of 2-4% in the preceding five years. (Stip. 145)

152. In contrast to white and black enrollment, Hispanicenrollment in the school system has been increasing steadilysince 1970, at the rate of 3-6% annually. Hispanic students nownumber 91,763 (21.2% systemwide). (Stip. 146)

153. Board's demographers believe the enrollment changessummarized in Findings 149-52 can be attributed to the followingfactors:

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 stableenrollments, an important factor contributing to changes is thetransfer rate between public and nonpublic schools. As thefollowing table reflects, the Chicago public schools have beengaining more students and losing fewer since 1980:

Student Transfers To/From Nonpublic Schools in Chicago

1980 1981 1982

Transfers from Nonpublic Schools in Chicago 6,084 7,041 7,934 Transfers to Nonpublic Schools in Chicago 12,919 11,648 10,177 ------ ------ ------ Net Loss 6,835 4,607 2,243 Total Membership 458,497 442,889 435,843 Percentage Net Loss 1.5% 1.0% 0.5%

(Stip. 148)

155. It appears the recent trend of enrollment decline in theChicago public schools has ended this year. Gradual increases canbe expected to begin next year, if the general demographic trends(particularly migration and transfer rates) experienced in therecent past continue in the years to come. Such a developmentwould point to increased demand for teachers and schoolfacilities. As to racial/ethnic composition, the school system isexpected to increase in minority enrollment. This is partlybecause of the greater proportion of whites in the upper grades,combined with continued outflow, and the higher birth rates forminority groups (particularly Hispanics) coupled with continuedimmigration of Hispanics. (Stip. 149)

156. Racial/ethnic composition of the elementary and secondarylevels of the school system as of October 1983 is detailed in thefirst table following Finding 157. These data are brieflysummarized as follows:

----------------------------------------------------------------- Type of Total School 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 2.4Systemwide 434042 67829 15.6 263163 60.6 91767 21.2 11283 2.6-----------------------------------------------------------------

(Stip. 150)

157. Racial/ethnic composition of the Chicago public schools bygrades is detailed in the second table following this Finding. Inbrief summary the data reflect higher proportions of minoritystudents in the lower grades. For example, minority enrollment is75-80% in grades 11 and 12, and 85-86% in first grade andkindergarten. (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 TOTALTYPE OF SCHOOL STUDENTS NON-HISPANIC NON-HISPANIC NATIVE ISLANDER MEXICAN PUERTO RICAN CUBAN OTHER HISPANIC HISPANIC------------------------------------------------------------------------------------------------------------------------------------------------------------------------ No. | | | # % | # % | # % | # % | # % | # % | # % | # % | # %------|---------------------------|---------|--------------|----------------|----------|------------|--------------|-------------|----------|-------------|------------- 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 23.2 19 | Academic Magnet Centers* | 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 24.1 14 | 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 20.8 6 | 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 14.7 6 | 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 19.1 5 | 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 8.3 6 | 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 12.9 4 | 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 48.0 7 | EVG Centers | 795 | 6 0.8 | 718 90.3 | -- -- | -- -- | 21 2.6 | 49 6.2 | -- -- | 1 0.1 | 71 8.9 25 | 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 | 508 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--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* Includes branches

SECONDARY LEVEL-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 44 | General/Technical* | 76,632 | 17,255 22.5 | 42,097 54.9 | 94 0.1 | 2,046 2.7 | 7,351 9.6 | 6,277 8.2 | 230 0.3 | 1,282 1.7 | 15,140 19.8 9 | 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 6.1 7 | 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 19.2 5 | 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--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* Includes branches

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--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[fn**] Included are schools for the physically and mentallyhandicapped, students with special needs, bilingual education,adult education and apprentice programs. Students on elementary,secondary and post-secondary levels are served.

CITYWIDE SUMMARY-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 594 | Totals | 434,042 | 67,829 15.6 | 263,163 60.6 | 698 0.2 |10,585 2.4 | 55,020 12.7 | 29,828 6.9 | 1,123 0.3| 5,796 1.3 | 91,767 21.2--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Racial/Ethnic Composition of Chicago Public Schools

by Grades============================================================================GRADE | MEMBERSHIP | % WHITE | % BLACK | % OTHER | % HISPANIC----------------------------------------------------------------------------Pre-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 than70% 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 systemwide enrollment. There are275,091 students (69.4% of systemwide enrollment) attendingschools more than 90% minority. (Stip. 152)

159. Schools with more than 70% black and/or Hispanicenrollment will increase in number in coming years, as a resultof the demographic and transfer trends described in Findings145-57. (Stip. 153)

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

% Minority K & Pre-school Enrollment

90-95% 3,130 95-99% 3,978 99%+ 22,733 ------ 29,841

Such enrollment is projected to be at least as great in schoolyear 1984-85, and will probably increase. Kindergarten studentsrepresent approximately two thirds of this total, or 20,000students. (Stip. 154)

161. In schools with more than 90% black and/or Hispanicenrollment, the number of black and Hispanic children in grades1-3 in school year 1983-84 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 schoolyear 1984-85, 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 effectsof racial segregation on minority children; the nature and typesof desegregation programs that are capable of eliminating oralleviating those effects; the design, development andimplementation of the Plan; and the ability of federal Chapter 1and State Title I eligible programs to alleviate the effects ofpast segregation. She is presently Associate Superintendent,OEEO, and has primary responsibility for implementation of thePlan. (Brady testimony)

202. Dr. Brady was one of the experts with principalresponsibility for drafting the Educational Components of thePlan. (Brady testimony)

203. In April 1981 Board adopted the Recommendations onEducational Components (prepared by its nationally known expert,Dr. Green). Those Recommendations accurately explain thejustifications for educational components:

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 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 effortsin this area. In general that portion of her testimony addressedboth the student assignment aspects of the Plan and the elementsof the educational components of the Plan as to whichimplementation has already been initiated. She also discussed theelements Board intends to implement in school year 1984-85 ifthere is sufficient available funding. More specific testimony asto the implementation status of the Curriculum, Bilingual andVocational/Technical Education components was provided by Drs.Gerald Heing, Josue Gonzales, and Philip Viso, respectively(Testimony of Brady, Heing, Gonzales and Viso)

205. Dr. Brady showed Board has experienced significantsuccesses in its implementation efforts to date. Her testimonywas supported by evaluations performed during the last two yearsat the 45 racially isolated targeted elementary schools that werefirst included in the Chicago Effective Schools Project. (Bradytestimony)

206. Dr. Brady's testimony described the process by which thePlan was designed and developed. She related how past segregationin the Chicago public schools has affected the basic learningskills achievement levels of children, particularly minoritychildren now attending, or who in the future will attend,racially identifiable minority schools. She explained eachcomponent of the Plan is (a) carefully designed to alleviate theeffects of past segregation and (b) will substantially furtherimplementation of a successful desegregation plan. She furtherexplained that, given the historic backdrop and the demographicsof Chicago, full and successful implementation of the EducationalComponents is crucial to the success of the Plan. (Bradytestimony)

207. In substantial part the Educational Components areintended to eliminate or alleviate the effects of past racialsegregation on minority children who will remain in raciallyidentifiable schools under the Student Assignment Plan and whowill attend such racially identifiable schools in the future. Inpursuit of this goal, the Plan also addresses the need forsystematic and institutional changes in the manner in which theschool system provides educational services. (Brady testimony)

208. Minority children now attending Chicago public schoolssuffer, or have been affected by, one or more of the followingeffects of racial segregation:

(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 resultingfrom racial isolation cannot be remedied only by studentassignment, even where student assignment is available. Itrequires other remedies, particularly compensatory educationalremedies, where student assignment is unavailable. (Bradytestimony)

210. OEEO, in conjunction with other Board departments andunits, developed the programs described in Board Ex. 28. OEEO wasprimarily responsible for developing the following programelements:

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 and SpecialEducation was primarily responsible for developing the SpecialEducation and Discipline program elements.Its Department of Vocational and Technical Education wasprimarily responsible for developing the Vocational and TechnicalEducation programs elements. Its Department of Curriculum andInstruction was primarily responsible for developing thecurriculum program elements. Its Department of International andMulticultural Education was primarily responsible for developingthe bilingual program. Its Department of Research and Evaluationwas primarily responsible for developing the program to evaluatethe results of Plan implementation. (Brady, Viso, Heing andGonzales testimony)

211. Board's original version of proposed Board Trial Ex. 28was provided to the United States on or about September 16, 1983.(Response to Board's Second Set of Requests to Admit, No. 28)

212. Dr. Brady reviewed each program in Board Ex. 28 andtestified each program was designed to implement the EducationalComponents of the Plan, would significantly alleviate the effectsof past segregation and was necessary for a successfuldesegregation effort in Chicago. She described how each programelement was developed, how each works or is expected to work andhow each 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. Her testimony alsoexplained how the cost of each element was calculated. This Courthas considered in detail (a) Board's proof on an item-by-itembasis (including all submitted Exhibits and this Court's ownnotes on all the testimony made during the course of the hearing,supplemented where necessary by review of the transcript), (b)the United States' specific objections (as articulated at thehearing and as filed in a post-hearing memorandum April 20, 1984)and (c) Board's detailed post-hearing response filed April 30. Inso doing this Court has applied the standards taught by theLiddell and Arthur cases discussed in the Conclusions. It haspaid close attention to drawing the line between programs thatwill materially aid successful implementation of the Plan andthose that have a more generalized primary focus of improving thequality of general education in the school system. Except to theextent reflected by these Findings and Conclusions, Board's lastresponse to the United States' argument as to "specific failuresof proof contained in the Board's presentation" is whollypersuasive, and the objections of the United States are thereforerejected.

213. In school years 1981-82 and 1982-83, implementation of thePlan's Educational Components included the introduction andimplementation of Effective Schools Project ("ESP") programs at45 specially targeted racially identifiable schools and theimplementation of certain elements of the ESP program at otherracially identifiable schools. The 45 specially targeted schoolsare:

District School

3 Schiller

4 Hay Branch

5 Lowell Morton Stowe

6 Anderson Diego LaFayette Moos Von Humboldt Yates

7 Beidler Douglass Middle Goldblatt Melody Tilton

8 Chalmers Komensky

9 Dett Dodge Herbert Medill Primary Smyth Suder

10 Frazier Henson Lawndale

11 Donoghue Douglas Einstein Williams

12 Fulton 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 comparativeneed evaluation. First, all racially identifiable schools wereranked lowest to highest based on achievement test scores inreading and math, with a double weighting for reading, over atwo-year period. In addition, attendance and student mobilitystatistics and the extent of racial isolation were taken intoconsideration in the ranking process. That process produced aranked list of the lowest-achieving most racially identifiableschools in the system, and the 45 lowest on the list were chosenas target schools. (Brady testimony)

215. For school year 1983-84 the complete ESP program wascontinued at the 45 target schools and implemented for the firsttime at the 62 additional racially identifiable schools(including 7 educational vocational guidance centers) listedbelow:

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. Nobel Elementary Piccolo Middle School Ryerson Elementary L. Ward Elementary Wright Elementary

6 Anderson E.V.G.C. Chopin Elementary Koscuiszko Elementary Otis 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 Aldridge Elementary Carver Middle School Kohn Elementary(Board Exs. 30 and 112; Brady testimony)

216. Those 62 additional schools chosen to participate in thefull ESP program in school year 1983-84 were selected through thesame means initially used to select the 45 target schools. Usingthe formula stated in Finding 214, all racially identifiableschools in the system were again listed in order in the fall of1983, with the lowest-achieving most racially identifiable schoolranked first. After the 45 targeted schools already participatedin the ESP programs were deleted from the list (as automaticcontinuing participants), the 62 lowest ranking schools remainingon 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 schoolsis possible only because of the $20 million appropriation toBoard pursuant to the Yates Bill (discussed in later Findings),which provided only a one-year appropriation of funds. Boardcurrently lacks the financial resources to continue the ESPprograms at those 62 schools in school year 1984-85. (Brady andGlasper testimony)

218. Board Exs. 28, 31, 32, 110 and 117 accurately describe thefull ESP programs implemented at 107 racially identifiableChicago public schools. Those ESP programs were implemented inschool year 1983-84 in accordance with the Plan set forth inBoard Ex. 30. (Brady testimony)

219. Implementation of the full ESP program at the 107 schoolsin school year 1983-84 has not involved duplication of otherdesegregation programs previously placed in those schools, whichBoard is continuing to implement. Implementation of the full ESPprogram at those 107 schools and at an additional 100 raciallyidentifiable Chicago public schools in school year 1984-85 willinvolve only minor duplication of already existing desegregationprograms in those schools. (Brady testimony)

220. Board's essential purpose for its ESP program is toimprove instructional effectiveness in racially identifiableschools in order to improve educational outcomes for black andHispanic children. That means improving achievement levels,attendance, discipline and the likelihood of a student'ssuccessfully moving to the next school level or into society ingeneral. This is accomplished by programmatic interventionsaddressing six major areas: instructional emphasis, includingincreased time on task; leadership; use of assessment data;parental support and involvement; general school climate; andstaff development and training. Among the elements of the ESPprogram designed to increase a student's time on task areextended-day and extended-year instruction, and full-daykindergarten instruction. (Brady testimony)

221. One of the major goals of the ESP program, as described inBoard Exs. 28, 31, 32, 110 and 117, is to reduce the gap inachievement levels between national grade level norms and theachievement levels of minority children now attending, or whowill attend, racially identifiable schools in the system. (Bradytestimony)

222. "Effective schools" as a concept is based on educationalresearch that suggests if the proper learning conditions arecreated, all children, regardless of their race and the racialcomposition of the school they attend, can learn. "Effectiveschools" as a model is an important structure for ensuringimplementation of effective educational remedies at raciallyidentifiable schools. It serves as a primary focus forimplementation of the Plan's Educational Components, particularlythose in curriculum-related areas. Board's "Effective SchoolsProject" is derived from and supported by the leading research in"effective schools" learning. (Brady testimony)

223. Board's inservice training component at each ESP school isa local, school-specific program that provides staff with thespecialized skills necessary effectively to implement the Plan'seducational remedies. Each school's teaching staff is or will bereceiving training intended to eliminate unequal treatment ofminority pupils byraising each staff's awareness of its possible racial biases andby modifying any biased attitudes, expectations and behaviorstoward the teaching of minority pupils. Each school's teachingstaff also is or will be receiving training designed to developthe specialized skills, instructional methods and educationaltechniques necessary effectively to teach and to increase theacademic achievement of minority pupils who must remain inracially identifiable schools. Each ESP school's inservicecomponent is directed toward instructing staff in meeting theparticular educational needs of minority pupils and in adaptingexisting instructional approaches to meet those needssuccessfully. (Brady testimony)

224. Board's ESP program described in Board Exs. 28, 30, 31,110 and 117, as implemented in 107 racially identifiable schoolsin school year 1983-84, materially aids the successfulimplementation of the Educational Components of the Plan. ThatESP program eliminates or alleviates the effects of racialsegregation on minority children in that it raises theachievement levels of minority children, ends the unequaltreatment of minority children in racially identifiable schoolsby teachers and administrative staff, and reduces thepsychological pressures of attending racially identifiableschools and the resulting loss of self-esteem. (Brady testimony)

225. Implementation of the ESP program in the 45 raciallyidentifiable target schools in school years 1981-82 and 1982-83has raised the median level achievement scores of minoritychildren as described in Board Exs. 36, 37 and 38 (as substitutedand modified by Board Ex. 91). (Brady testimony)

226. To close the existing gap in grade level norms andachievement levels between students in integrated schools andminority students attending racially identifiable schools, itwill be necessary to implement the full ESP program in the 45original target schools for another 3 to 5 years and in the 62additional racially identifiable schools for another 4 to 6years. (Brady testimony)

227. With adequate funding, Board would continue to implementthe full ESP program in those 107 schools in school year 1984-85.In addition, it would implement the full ESP program in the next100 lowest ranking schools as determined by the same formula("Level II schools"). (Brady testimony)

228. Board Ex. 28, as modified by Board Ex. 117 and Dr. Brady'stestimony, sets forth the projected cost of implementing a fullESP program in 207 racially identifiable schools for school year1984-85. Those cost figures are reasonable under thecircumstances shown at trial. (Brady testimony; Glaspertestimony)

229. Board Ex. 28, as modified by Board Ex. 117 and Dr. Brady'stestimony, sets forth the estimated cost in school year 1984-85of implementing certain components of the ESP program at raciallyidentifiable schools ("Level III schools") not participating inthe full ESP program. Those projected cost figures are areasonable estimate under the circumstances shown at trial. Ifthe estimate of $10 million were to prove inaccurate, the figurescould be adjusted by reducing the United States' payment to Boardin a subsequent year. (Brady testimony; Glasper testimony)

230. Board Ex. 31 sets forth the amount Board expects to spendin school year 1983-84 for implementing certain components of theESP program at the 100 Level II racially identifiable schools notcurrently participating in the full ESP program. Those projectedcost figures are reasonable under the circumstances shown attrial. (Brady testimony; Glasper testimony)

231. To implement the Educational Components of the Plan, Boardmust at a minimum implement certain components of the ESP programat both the 100 Level II schools and the Level III schools. Suchcomponents to be implemented at the nonparticipant raciallyidentifiable schools are those that require full-day kindergartenat each of those schools, the use of extended-day andextended-year instruction, and the inservice training of staff atthose schools.For the reasons stated in Finding 224, implementation of thosecomponents of the ESP program at racially identifiable schoolsnot participating in the full ESP program will materially aid thesuccessful implementation of the Educational Components of thePlan. (Brady testimony; Glasper testimony; Board Ex. 117)

232. With adequate funding, Board would implement a full ESPprogram at the 100 Level II schools. Such full implementationwould materially aid successful implementation of the EducationalComponents of the Plan for the reasons stated in Finding 224.Board's cost of such implementation in school year 1984-85 wouldbe as shown on Board Ex. 117 and would be reasonable under thecircumstances. Full implementation at those schools would reducethe 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 inAugust and September of 1983, of the cost and budget breakdown ofthe program components (and the program elements) designedmaterially to aid the implementation of the Plan (Bradytestimony). Board Ex. 117 was prepared by the OEEO staff, underthe direction and supervision of Dr. Brady, in response torequests made by the United States and this Court during thecourse of this hearing. Board Ex. 117 reflects the cost in schoolyear 1984-85 of implementation of the full ESP program at 207schools and the partial implementation of the ESP program at allother racially identifiable schools (Brady testimony). It alsoreflects:

(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 components funded inschool year 1983-84 with moneys appropriated by the Yates Bill,Board Ex. 117 contains three columns of numbers: the firstrepresenting the line-by-line budget breakdown of costs as setforth in Board Ex. 28; the second representing those portions ofprogram elements actually funded in 1983-84; and the thirdrepresenting the amount required to implement those programs inschool year 1984-85. (Brady testimony) With respect to programcomponents funded in school year 1983-84 with incremental Boardfunds, Board Ex. 117 contains four columns of numbers: the firstrepresenting the line-by-line breakdown of costs as set forth inBoard Ex. 28; the second representing those portions of programelements actually funded in school year 1983-84; the thirdrepresenting the amount required to implement those programs inschool year 1984-85 (after consideration of non-recurring costs;and the fourth representing the amount Board will not be able tofund from its own resources in school year 1984-85, despite itsgood faith efforts.) (Brady testimony)

234. Board's Trainers Institute program is intended to buildwithin the Chicago public school system the internal capacity toprovide inservice training to teachers and staff forimplementation of the Student Assignment Plan and the EducationalComponents, and generally for the education of minority childrenin racially identifiable schools. That Institute will materiallyaidsuccessful implementation of the Plan. It will eliminate oralleviate the effects of racial segregation on minority childrenin that it will assist the raising of their achievement levelsand help end the unequal treatment of minority children inracially identifiable schools by teachers and administrativestaff. (Brady testimony)

235. With adequate funding, Board would fully implement theTrainers Institute in school year 1984-85. Board Ex. 117 setsforth the projected cost of implementing the Trainers Institutein 1984-85. That cost is reasonable under the circumstances.(Brady testimony; Glasper testimony)

236. Board's Management Information System is intended toestablish and maintain a comprehensive information system tocollect, analyze, review and disseminate data related to alldesegregation activities under the Educational Components and theStudent Assignment Plan. That System materially aids successfulimplementation of the Plan by tracing and measuring progress inachieving the goals of the Plan. Board Ex. 117 sets forth theprojected cost of the System. That cost is reasonable under thecircumstances. (Brady testimony; Glasper testimony)

237. Board's Equity Compliance program described in Board Ex.28 is intended to manage program expenditures, gather OEEOstatistical data, carry out desegregation reporting functions,monitor and audit desegregation activities and establish means tomeasure and assess compliance with the Plan. Each component ofthat program will materially aid successful implementation of theEducational Components of the Plan. Certain aspects of theprogram were implemented in school year 1983-84, as detailed inBoard Ex. 31 and 117. Its cost of implementation in school year1984-85, as set forth in Board Ex. 117, is reasonable under thecircumstances. (Brady testimony; Glasper testimony)

238. Board's systemwide Staff Development program for raciallyidentifiable schools, described in Board Ex. 28, is intended toprovide staff with the information and skills necessary toimplement effectively the Plan's educational components. Throughtwelve major conferences, staff from all racially identifiableschools will receive a general overview in manydesegregation-related areas, including the requirements of thePlan, and methods of ensuring equal educational opportunity in aracially identifiable school. Specific topics encompassed inthose conferences will address multi-cultural awareness andteaching approaches, effective discipline techniques, classroommanagement and instructional strategies to raise minority pupils'academic achievement. General staff development provided throughthe program is intended to introduce staff to problems inimplementing the Plan, and to increase staff's effectiveness indealing with the problems addressed. (Brady testimony)

239. Board's Staff Development program for the raciallyidentifiable schools will materially aid successfulimplementation of the Plan. It will eliminate or alleviate theeffects of racial segregation on minority children in that itwill assist teachers in raising the achievement levels of thechildren and it will help in ending the unequal treatment ofminority children in racially identifiable schools by teachersand staff. Its consultant component is required to hirespecialists to conduct inservice training conferences. Thoseconsultants are necessary to implement the Staff Developmentprogram. Board Ex. 117 sets forth the projected cost of theprogram for school year 1984-85. That cost is reasonable underthe circumstances. (Brady testimony; Glasper testimony)

240. Board's systemwide Staff Development program forDesegregated Schools, described in Board Ex. 28, is intended toprovide staff with general information and an overview of skillsnecessary to effectively implement the Plan's student assignmentand educational components. Staff from desegregated schools willreceive training in many areas, including the requirements of thePlan, multi-cultural awareness and teaching approaches, effectivediscipline techniques and classroom management in a desegregatedsetting.That program will materially aid the successful implementation ofthe Plan. It will eliminate or alleviate the past effect ofracial segregation on minority children now attendingdesegregated schools by assisting teachers in raising theirachievement levels. It will also assist in the effectiveimplementation of the Plan by raising staff awareness of andeliminating its unequal treatment of minority pupils indesegregated schools. As set forth in Board Exs. 28 and 117, thecost of that program is reasonable under the circumstances.(Brady testimony; Glasper testimony)

241. Board's Within-School Segregation Program is intended togather information about the racial composition of classrooms andto monitor the assignment of students to classrooms withinparticular schools. That program will materially aid successfulimplementation of the Plan. It will eliminate or alleviate theracial segregation of students in classrooms through, forexample, forms of "tracking" or "ability grouping." It willaccordingly ensure that students are actually taught, insofar asis practicable, in a physically desegregated environment. BoardEx. 117 sets forth the cost of the program for school year1984-85. That cost is reasonable under the circumstances. (Bradytestimony; Glasper testimony)

242. Board's Magnet Schools programs, described in Board Ex.28, are intended to construct new magnet schools, develop andexpand special curriculum offerings at certain raciallyidentifiable schools, and provide inservice training and staffdevelopment at 150 magnet schools and magnet programs.Specialized curriculum offerings or magnet programs will beintroduced or expanded at racially identifiable "communityacademies" as part of the special educational improvements andremedies required by the Plan. Staff training and advisoryservices are necessary and will materially assist staff inplanning and developing the expanded curriculum offerings and insuccessfully introducing them in racially identifiable schools.Except as stated in Finding 243, the Magnet School programsdescribed in Board Ex. 28 will materially aid successfulimplementation of the Plan. Board Ex. 117 sets forth the cost ofthose programs for school year 1984-85. That cost is reasonableunder the circumstances. (Brady, Glasper, Viso testimony)

243. Board did not demonstrate the proposed Residential MagnetHigh School would have sufficient marginal utility (on thetestimony it would serve only about 200 students), in relation toits more than $9 million cost, so as to justify a finding theschool will materially aid successful implementation of the Plan.By way of contrast, although the proposed Agricultural MagnetHigh School is also challenged by the United States asinsufficiently related to the purposes of the Plan, the testimonyestablishes that school would meet a demonstrated need and serveminority students in a manner that meets the standard stated inFinding 242. That is also true of all the other Magnet Schoolprograms.

244. Board's Staff Development Program at the 150 magnetschools and magnet programs, as referred to in Finding 242, isintended to meet school specific needs related to the particularschool's curriculum, including maintaining the consistency of themagnet program with systemwide standards, training teachers ininstructing students in the special magnet program offering, andplanning, developing and refining the magnet program to maintainits quality. That program also will train staff in multiculturalawareness, teaching approaches and classroom management in adesegregated school. Its purpose is to enhance the likelihoodthat magnet schools and magnet programs will develop and maintainthe quality curriculum and school climate necessary to attract adesegregated student body. (Brady testimony)

245. Each component of the Staff Development Program referredto in Findings 242 and 244 is directly related to the Plan andwill materially aid its successful implementation by raisingminority pupil achievement, eliminating unequal treatment ofminority pupils, and achieving andmaintaining physical desegregation in school populations. Withadequate funding the Board would implement those components ofits magnet school program in school year 1984-85. Board Ex. 117sets forth the cost of implementing those components in schoolyear 1984-85. That cost is reasonable under the circumstances.(Brady testimony; Glasper testimony)

246. Board's Special Education/Testing program described inBoard Ex. 28 is intended to implement and, as required by thePlan, to validate procedures designed to ensurenon-discriminatory assessment and placement of students ineducable mentally handicapped classes. Consultants and inserviceprograms are necessary to provide Board staff with the skills toevaluate whether its current assessment procedures are accurateand race neutral. In addition the Special Education/Testingprogram is intended to provide transition services and specialeducational support for students who were previously placed inmentally handicapped classes, based upon potentially biasedassessment instruments, and who are now being returned to theregular classroom. Inservice training is required to provideteachers and other staff with awareness of and the skills to dealwith such students' special educational needs during the periodof their transition to the regular classroom. (Brady testimony)

247. All components of the program described in Finding 246will materially aid Board's implementation of the Plan. It willeliminate or alleviate the effects of racial segregation onminority pupils by assisting their return to regular classroomsand thus raising their achievement levels, and it will help endthe unequal assessment and placement of minority pupils inspecial education classes. Its cost for school year 1984-85, asset forth in Board Ex. 117, is reasonable under thecircumstances. (Brady testimony; Glasper testimony)

248. Board's Vocational and Technical Education Program, asdescribed in Board Exs. 28 and 116, is intended to providevocational educational information to staff and students, torecruit minority students for vocational education classes, toprovide vocational educational support services for minoritystudents, and to expand and adapt vocational education programofferings to increase the opportunity for minority students toparticipate in vocational education programs. Inservice trainingand consultant services are required to acquaint teachers withvocational education opportunities open to minority pupils, toimprove the staff's skills and capabilities effectively toprovide vocational education services to minority students, andto assist staff in planning, developing and effectively providingadditional vocational program offerings to students. Theseinservice and consulting components are directly related to thePlan and will materially assist in implementing its Vocationaland Technical Education program. (Brady testimony; Visotestimony)

249. Except as stated in Finding 250, the components of theVocational and Technical Education program will materially assistthe Board in implementing the Plan. They will alleviate oreliminate the effects of past segregation in vocational andtechnical education programs by various activities intended toend the unequal participation of minority students in theseprograms. Their respective costs for school year 1984-85, as setforth in Board Ex. 117, are reasonable under the circumstances.(Brady testimony; Viso testimony; Glasper testimony)

250. One component of the Vocational and Technical Educationprogram testified to by Dr. Viso (the Handicapped component)cannot fairly be included in the cost of the Plan for currentpurposes. On the present record it lacks a sufficient nexus tothe purposes of the Plan — as compared with the general goal ofimproving the overall quality of education. Though in itspost-hearing submission Board stated that blacks represent ahigher percentage of EMH students in the system (about 81%) thantheir percentage of total school enrollment (about 61%), notestimony established what percentage EMH students were of thetotal "Handicapped" group that could be assisted by the program.Thus the testof materiality is not satisfied. This is simply a matter ofinadequacy of proof, and to the extent such proof may besharpened in subsequent years the item may perhaps be allowable.This Court of course recognizes that most of the other Vocationaland Technical Education components also involve estimates, buteach of those estimates is sufficiently reasonable (and noteffectively challenged by the United States) to satisfy Board'sburden of proof. In any case Board will be fully accountable forits use of funds, and to the extent there may prove to be anyover-allocation as to any item based on actual experience,adjustments in the United States' payments to Board can be madein future years.

251. Board's Department of Curriculum activities related to itsPlan needs, as described in Board Exs. 28 and 114, are intendedto ensure that curriculum offerings are consistent with the goalsof the educational components and modified and refined to meetthose goals. Desegregation-related activities in the Departmentof Curriculum will include planning, developing and implementingthe special curriculum improvements required by the Plan'sEducational Components, coordinating those improvements andmonitoring their consistency with systemwide educational goals,maintaining the curriculum and course quality of the specialeducational programs required by the Educational Components. Allinservice and advisory components of those programs are necessaryto provide Board staff with the information and skills to planand provide effectively the various curriculum development andimplementation activities necessary to achieve the overall goalsof the educational components. (Brady testimony; Heing Testimony)

252. Except as stated in Finding 253, the components of theCurriculum and Instruction program will materially assist theBoard in implementing the Plan by raising the achievement levelsof minority students and maintaining or enhancing the quality ofcurriculum designed to raise the achievement of minoritystudents. Board Ex. 117 sets forth the cost of implementing thesecurriculum and instruction activities in school year 1984-85.That cost is reasonable under the circumstances. (Bradytestimony; Heing testimony; Glasper testimony)

253. "High School Renaissance," as described in Dr. Heing'stestimony, was not sufficiently distinguished from Board'sordinary goals of system-upgrading to justify inclusion of thatprogram in Plan costs. Dr. Heing referred to providing a"strengthened diploma" — of course a commendable goal, but onethat appears clearly on the other side of what is admittedly notalways a bright line distinction between (a) Plan implementationand (b) general benefits to educational goals of the schoolsystem as a whole.

254. Board's Student Discipline program, described in Board Ex.28, is intended to provide discipline managers in schools whowill enforce the Uniform Discipline Code, provide training tostaff in the provisions of the Code and behavior modificationtechniques, develop and operate in-school suspension and behaviorimprovement programs as an alternative to suspension, and monitorand report on disciplinary infractions. That program willmaterially assist the Board in implementing the Plan byeliminating or alleviating unequal disciplinary treatment ofminority pupils. Its cost for school year 1984-85, as set forthin Board Ex. 117, is reasonable under the circumstances. (Bradytestimony; Glasper testimony)

255. Board's Bilingual Education programs, as described inBoard Ex. 28, are intended to assist in achieving the nationalorigin desegregation required by the Plan. Activities that wouldbe undertaken include establishing special "immersion"educational programs to instruct pupils in their native languagesuntil they can make the transition to regular classrooms,developing a special curriculum responsive to the needs ofbilingual students, performing research on the educational needsof bilingual and limited English proficient students, andrecruiting qualified bilingualteachers. Inservice training and consulting activities arenecessary to provide staff with the skills to conduct research,plan and develop bilingual and limited English proficienteducation programs, and effectively to instruct bilingual andlimited English proficient students. (Brady testimony; Gonzalestestimony)

256. Except for Statewide Network (which was withdrawn byBoard), each component of the Bilingual Education program willmaterially assist Board in implementing the Plan. Each willalleviate or eliminate the effects of segregation on bilingual orlimited English proficient students in that it will assist theraising of their academic achievement and help end the unequaltreatment of and unequal educational opportunities available tothose children. Each component's cost for school year 1984-85, asset forth in Board Ex. 117, is reasonable under thecircumstances. (Brady testimony; Gonzales testimony; Glaspertestimony)

257. Board's Evaluation program described in Board Ex. 28 isintended to permit OEEO to collect, analyze and evaluateinformation to determine the overall effects of the Plan, asimplemented, and to indicate areas where programs must be refinedor modified to achieve the Plan's goals. Consultant and inserviceprograms are necessary to provide staff with the skills toconduct this research and evaluate the effects of the Plan. ThisProgram will materially aid the successful implementation of thePlan by providing information necessary to continue and correctimplementation of the plan and to reach the Plan's goals. BoardEx. 117 sets forth the costs of the Evaluation Program for schoolyear 1984-85. That cost is reasonable under the circumstances.(Brady testimony; Glasper testimony)

258. Inservice training and staff development programsdescribed in various of Findings 223-57 do not duplicate eachother and do not duplicate other inservice training provided byBoard. Each program-related training or staff developmentactivity will address specific needs and topics related to theprogram it will assist in implementing. Those program-specificneeds will not be addressed to the extent required effectively toimplement the programs in the Educational Components in thegeneral, systemwide desegregation related staff developmentprograms operated by OEEO, nor in any other of Board's ongoingstaff development activities. (Brady testimony)

259. All costs (with reference both to the total amount and tothe amount Board is unable to fund despite its every good faitheffort) of the program elements set forth in Board Ex. 117 arereasonable estimates of the amounts needed to implement suchprograms. (Testimony of Brady, Viso, Heing, Gonzalez and Glasper)Those costs represent appropriate modifications, where required,of costs originally reflected in Board Ex. 28. In turn, the costattributable to each program element of Board Ex. 28 was includedtherein after consultation between the Budget Office, OEEO andcentral office administrative personal responsible for thepreparation thereof. (Brady and Glasper testimony) Thoseprojected costs were reviewed and verified by Board's Office ofBudget and Financial Planning. (Glasper testimony)

260. Of the $108 million in program components identified byBoard Ex. 28, approximately $6 million is being funded by Boardresources in school year 1983-84. (Glasper testimony)

261. Another $20 million, appropriated by the Yates Bill, isbeing devoted to Board Ex. 28 program components during thesecond half of the 1983-84 school year. (Brady testimony) BoardEx. 31 sets forth those elements of the Educational Components ofthe Plan that are being funded by the $20 million appropriated bythe Yates Bill. (Brady testimony)

262. Board Exs. 31, 35, 41 and 113 accurately describe thedesegregation programs and anticipated expenditures of Boardduring school year 1983-84. Those include the approximately $57million in expenditures for programs continued from school year1982-83, the planned approximately $10million increase in desegregation expenditures for school year1983-84 (further described in Board Exs. 35 and 113), and the $20million in anticipated expenditures resulting from by the YatesBill (further described 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; Brady testimony)

263. Neither Board Ex. 28 nor Board Ex. 117 makes any provisionfor increases in employee compensation over and above the levelsin effect for the 1982-83 school year. They do not, for example,take account of the 5% salary increase agreed to by Board and theChicago Teachers' Union for the 1983-84 school year or of anysuch future salary increases that may be negotiated between Boardand its employees. (Glasper testimony)

264. Set forth after Finding 265 is a chart that reflects theadjustments to Board Ex. 28 made by Board Ex. 117 (as describedin Finding 233) and that reflects the 5% salary increase[fn5a]implemented in school year 1983-84 referred to in Finding 263.Set forth on the following seven pages are individual charts thatreflect such 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, Bilingual Educationaland Evaluation (Brady and Glasper testimony).

265. As reflected by the attached charts, the level of fundingadequate for full implementation of the Plan in school year1984-85 (as modified to reflect Findings 243, 250 and 253) isapproximately $171.631 million. Of that amount, Board has beenable to budget approximately $67.773 million, leaving anincrement of approximately $103.858 million that Board, despiteits best efforts, will not be able to fund. For planningpurposes, it can reasonably be assumed that approximately$171.631 million 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 Project, at Level I and Level As Revised to II Schools (B) Partial Reflect the As Revised by Implementation at Level III Term of the Exhibit 117 to Schools (C) Consideration of Costs Set Forth Reflect Non-Recurring Costs and (D) As Revised to Reflect the As Shown on in the Program Correction of Assumed Continuation of Effect of the 5% Salary Page 1 of Sheets Included Errors and Incremental Board Funding in Increase Implemented in Program Exhibit 28 in Exhibit 28* Duplications 1984-85 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 21,093,741

Trainers Institute 563,678 563,678 567,678 144,599 167,211

Racially Identifiable Schools - Level II 17,000,000 17,000,000 17,000,000 --- --- Level III --- --- --- 10,000,000 10,000,000

Management Information 371,230 371,230 371,230 46,230 48,079

Affirmative Action 364,475 364,475 364,475 136,666 136,666

Equity Compliance 564,808 564,808 564,808 406,562 416,107

Staff Development 2,760,495 2,760,495 1,847,519 1,474,319 1,288,390 1,535,761 1,359,021

Within School Segregation 134,425 134,425 134,425 134,425 139,592

Magnet Schools 19,678,850 19,407,350 19,407,350 19,407,350 17,967,350 19,607,895 8,916,895

Special Education/ Testing 2,017,870 2,017,870 2,017,870 563,608[fn***] 606,613

Vocational/Tech 22,648,444 Education 25,991,634 24,423,954 24,468,599[fn**] 24,018,639[fn****] 22,197,484[fn****] 24,018,639 21,547,987

Curriculum 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 7,233,940

Bilingual Education 4,514,215 4,483,257 4,478,257 4,296,153 4,136,703 4,486,323 4,321,386

Evaluation 738,747 738,747 738,747 701,226 718,513 ------------ ------------ ------------ ------------ ------------ Total $108,785,468 $106,915,330 $106,945,999 $117,362,505 $111,987,861 $120,043,270 $103,858,642

* With regard to the Magnet Schools, Vocational/TechnicalEducation and Bilingual Education components, the amount shown onp. 1 of Exhibit 28 does not equal the sum of the costs shown foreach of the program elements included therein. This columnreflects the projected total costs for these program elements, asreflected by the program budget sheets included in Exhibit 28.

[fn**] As revised by Exhibit 116 with respect to the VocationalAssessment program element (Viso Testimony) and Board Post-TrialBrief.

[fn***] Reflects consideration of $222,655 of incremental Board fundsavailable for other purposes (Special Education — ReassessmentValidation) and assumes this amount will be used to fund otherelements of the Special Education component.

[fn****] See accompanying chart for Vocational Education programelements.

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

Staff Development

Racially Identifiable School $2,181,470 $1,268,494 $895,294 $709,365 $932,012 $755,263

Staff 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

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

Magnet Schools

Residential High School $9,251,000 $9,251,000 $9,251,000 $9,251,000 -0-

School for Agricultural Sciences 3,000,000 3,000,000 3,000,000 3,006,152

Program Expansion 3,001,600 3,001,600 3,001,600 3,079,480

Staff Development 2,017,500 2,017,500 2,017,500 577,500 2,028,375 588,375

Centralized Enrollment 121,250 121,500 121,500 126,088

Bus 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

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

Special Education/Testing

Special Ed/Testing/ Transition $1,452,870 $1,452,870 $786,263 $818,963

Assessment Techniques 565,000 565,000 -222,655 -212,350 ----------- ---------- --------- --------- Total $2,017,870 $2,017,870 $563,608 $606,613

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

Vocational/Tech Education

Community Resource Data Bank $311,750 $311,750 $306,017 $305,543 $306,017 $305,543

Wn.burne Trade School 14,125,000 14,125,000 13,865,251 13,843,753 13,865,251 13,843,753

Maximizing Training Levels 30,000 30,000 29,448 29,403 29,448 29,403

Vocational Articulation 955,660 955,660 938,086 936,632 938,086 936,632

Handicapped Component 662,692 662,692 650,505 649,497 650,505 -0-

Limited English Proficient Component 989,020 989,020 970,832 969,327 970,832 969,327

Student Service Corporation 771,902 771,902 757,707 756,532 757,707 756,532

Vocational 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[fn**] 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 1984-85 areallocated proportionately among program elements.

[fn***] No revision is made to reflect 5% salary increase as a resultof the pro rata allocation of "unfunded recurring" costs amongprogram elements.

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

Curriculum

Staff — Program Planning $144,688 $144,688 $387,856* $387,856[fn**]

Computer System 15,230 15,230 * [fn**]

Staff — Program Review 198,244 198,244 198,244 201,944

High 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 196,380 196,380 196,380 206,174

Bureau of Language Arts 385,831 385,831 385,831 399,162

Intensive Writing Improvement Program 1,823,820 1,823,820 1,823,820 1,908,195

Staff — Coordination of New Programs 586,361 586,361 * [fn**]

CMLMP Handbook 47,822 47,822 47,822 50,135

Paideia Programs 998,352 998,352 554,152 583,219

Assistants — 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 reflectedin this column represents the total "unfunded recurring" costsfor all four program 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 Non- As Revised by Exhibit Recurring Costs and the As Revised to Reflect As Reflected in the 117 to Reflect the Assumed Continuation of the Effect of 5% Salary Budget Sheets Set Forth Correction of Errors Incremental Board Increase Implemented in Program in Exhibit 28 and Duplications Funding in 1984-85 1983-84

Bilingual Education

Immersion Programs $358,041 $358,041 $358,041 $372,144

Evaluation Activities 697,270 697,270 697,270 537,894 721,599 556,662

Recruitment 86,972 86,972 47,668 50,668

Statewide Network 5,000 --- --- ---

Advisory Council 3,000 3,000 3,000 3,000

Public Involvement 390,781 390,781 390,781 406,412

Translation Activities 154,544 154,544 103,781 103,707 109,611

Parent Institute 36,500 36,500 36,500 36,500

Instructional Materials 350,000 350,000 297,453 297,963

Staff Development 204,365 204,365 168,699 192,346

Gifted Programs 155,610 155,610 155,610 159,386

Haitian Bilingual Center 60,306 60,306 56,556 57,756

Curriculum Development 1,935,132 1,935,132 1,935,132 2,031,889

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

Evaluation

Native Language Assessment $36,684 $36,684 $36,684 $38,112

Local School Development Program 678,596 678,596 641,075 656,634

ESEA Title VII Bilingual Desegregation Support 23,467 23,467 23,467 23,767 -------- -------- ------- -------- Total $738,747 $738,747 $701,226 $718,513

266. Each of the various programmatic elements that, in theirentirety, make up the Student Assignment and EducationalComponents of the Plan materially aids inthe desegregation of the Chicago public schools. (Testimony ofBrady, Viso, Heing and Gonzales) Those programs work togetherwith ongoing programs first implemented in earlier school yearsto achieve the goals of the Plan's Educational Components. (Bradytestimony)

267. Prior to school year 1983-84, only certain elements of theEducational Components had been implemented at the vast majorityof racially identifiable schools and, as a result, achievement ofthe Plan's overall objectives has been limited. Even with theimplementation of additional elements this school year because ofthe increased Board budget for desegregation and theappropriation in the Yates Bill, many other elements have yet tobe implemented. (Brady testimony)

268. At this point, school year 1984-85 is the first in whichfull implementation of the Plan could occur. In the months thatfollowed the June 1983 hearing, Board had anticipated that theresources necessary to implement fully the various components ofthe Plan would be made available by the United States for the1983-84 school year, so as to make it the first year of fullimplementation. As a result, Board Ex. 28 was prepared under theassumption that each of the various program elements would beinitially implemented in 1983-84. However, only $26 million innew financial resources became available, allowing for onlylimited implementation of these program elements. (Brady andGlasper testimony)

269. Because of the passage of time, full implementation becameimpossible in school year 1983-84. Given both the schedule ofthese proceedings (including the possibility of an appeal by theUnited States) and the nature of the school year calendar,additional resources could not be received and properly devotedto implementation of the programs before the beginning of schoolyear 1984-85. It is accordingly necessary to treat school year1984-85 as the first year of full implementation. (Bradytestimony)

270. Educational Components of the Plan were intended tosupplement Chapter I programs in racially identifiable schoolswhere such programs are in effect. If Chapter I funds were usedfor desegregation programs, the aggregate effects of low incomestatus and racial segregation would not be addressed, and lowincome minority students would receive less compensatoryprogramming than contemplated by Chapter I and the Plan. (Bradytestimony; Fagan cross-examination testimony)

271. There are a substantial number of racially identifiableschools not eligible for Chapter I programs, and even in thoseschools eligible for Chapter I programs a significant number ofminority students are not qualified to participate because theirachievement levels, while below grade level, are not low enough.In short, the latter group of minority children, and those nowattending or who will attend racially identifiable schoolsineligible for Chapter I programs, would be foreclosed fromcritical remedial programs designed to alleviate the educationalimpact of past segregation that affects each of them, even ifChapter I funds were used for funding for the Plan. (Fagancross-examination testimony)

272. Diverting Chapter 1 funds to Desegregation Plan costswould divest low income, educationally deprived students of thebenefits of Chapter 1 ECIA programs in order to provide minoritystudents the benefit of the Plan's Educational Components. Thatwould offset or neutralize the benefit of the desegregationremedy and would diminish the aggregate impact of thecompensatory and desegregation programs provided by Chapter 1 andthe Consent Decree. (Brady testimony; Fagan cross-examinationtestimony)

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

1983-84 Incremental Desegregation Expenditures

301. As of September 1983 the Chicago public school systemcomprised 70 high schools, 442 elementary schools and 25branches, 25 child-parent centers and a small number of schoolsof other types (such as special education facilities, apprenticeand trade schools, adult schools and bilingual-biculturalschools). Enrollment for the 1983-84 academic year isapproximately 434,000 students. As of June 1983 Board employednearly 40,000 persons, of whom approximately 27,400 wererepresented by the Chicago Teachers' Union and approximately9,500 were members of other unions and employee groups thatnegotiate with Board. (Stip. 201)

302. Board's budget for school year 1983-84 provides forappropriations of approximately $1.455 billion for operatingexpenditures. (Stip. 202)

303. As part of the $1.455 billion budgeted for operatingexpenditures in school year 1983-84, Board budgeted approximately$67.7 million for incremental desegregation expenditures. Afterreceiving the $20 million appropriated by the Yates Bill, Boardincreased that amount to approximately $87.7 million. (Stip. 203)

304. Incremental desegregation expenditures refers to thosedesegregation expenditures which are budgeted and accounted forby Board by specific three-digit codes. Those three-digit projectcodes identify appropriations and expenditures by their source orpurpose. (Stip. 204)

305. In 1980-81, the year in which the Consent Decree wasentered, incremental desegregation expenditures consisted ofcertain student assignment programs accounted for under ProjectCode 512 (as described in Finding 306). As Board expandedimplementation of the Plan in each subsequent school year,additional project codes were established to account for thevarious programs that constituted the components of suchexpansion. (Stip. 205)

306. Incremental desegregation expenditures are budgeted andaccounted for by reference to the following three-digit projectcodes:

(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.[fn6a]

(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 incrementaldesegregation appropriations and expenditures, identified byproject codes, for school years 1980-81 through 1982-83 andincremental desegregation expenditures of $87.7 million, alsoidentified by project codes, Board has budgeted for school year1983-84. (Stip. 207; Glasper testimony; Board Ex. 41)

FOUR-YEAR DESEGREGATION ANALYSIS SUMMARY

1980-81 1981-82 1982-83

1983-84 Budget Expenditures 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 4,035,843 Supplies 13,461 11,209 19,001 11,470 12,002 8,286 16,002 Rentals 170,595 114,300 87,492 87,492 78,039 78,030 72,000 Repairs 48,641 33,338 60,411 59,071 71,363 71,078 126,576 Trans. of Students 7,341,895 6,963,492 9,177,200 9,225,468 5,265,320 6,551,234 5,395,000 Carfare 163,800 304,804 506,304 503,693 1,368,184 803,698 975,000

Other 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 10,846,644 Supplies -0- -0- 600,000 555,463 10,000 9,086 10,500 Prof. Services -0- -0- 200,000 212,945 178,000 82,694 403,000 Printing -0- -0- 25,000 26,213 44,200 31,543 54,200 Auto Reimb. -0- -0- 18,200 10,681 10,578 10,570 10,146 Trans. of Students -0- -0- 25,000 22,399 -0- -0- -0- Miscellaneous -0- -0- 850,328 461,605 -0- -0- 644,117 Other -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 8,984,764 Textbooks -0- -0- 1,943,460 1,813,482 2,797,806 1,949,908 1,168,137 Supplies -0- -0- 524,647 1,816,377 -0- 523,624 -0- Miscellaneous -0- -0- 2,184,030 257,276 4,373,701 -0- 5,177,156 Equipment -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- 488,143 477,562 280,503 206,941 487,329 Prof. Svcs. -0- -0- 35,395 15,472 47,075 32,557 25,169 Auto Reimb. -0- -0- 5,589 2,443 7,433 5,139 3,489 Textbooks -0- -0- 26,080 11,400 34,687 23,982 7,976 Printing -0- -0- 72,653 31,758 96,628 66,807 262 Supplies -0- -0- 39,121 17,100 52,030 35,973 3,050 Other -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 1,425,791 Prof. Svcs. -0- -0- 211,090 146,417 215,788 131,020 52,603 Equipment -0- -0- 66,930 46,425 68,420 41,543 6,000 Travel -0- -0- 36,040 24,998 36,842 22,370 135,000 Printing -0- -0- 5,149 3,571 5,263 3,196 17,000 Textbooks -0- -0- 82,376 57,138 84,210 51,130 270 Other -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 6,997,005 Textbooks -0- -0- -0- -0- 210,400 350,037 1,492,445 Trans. of Students -0- -0- -0- -0- 5,805,000 5,104,707 8,880,000 Supplies -0- -0- -0- -0- 350,400 372,293 95,000 Equipment -0- -0- -0- -0- 869,845 1,358,831 97,180 Other -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- 2,000,000 Trans. of Students -0- -0- -0- -0- -0- -0- 2,000,000 Expan. 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- 14,060,346 Textbooks -0- -0- -0- -0- -0- -0- 1,444,060 Supplies -0- -0- -0- -0- -0- -0- 1,220,521 Prof. Svcs. -0- -0- -0- -0- -0- -0- 733,928 Repairs -0- -0- -0- -0- -0- -0- 1,374,797 Trans. of Students -0- -0- -0- -0- -0- -0- 365,220 Equipment -0- -0- -0- -0- -0- -0- 725,095 Other -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 53,255,250 87,773,271 =============================== ============================== ========================== ===========

308. Board budgeted and spent approximately $57 million for"incremental desegregation expenditures" in school year 1982-83.Of that amount approximately$2.3 million was derived from federal resources: approximately$.5 million in funds under Title VII of ESEA to implement certainaspects of the Plan's bilingual education components, andapproximately $1.8 million in funds received by Board underChapter 2 of ECIA. This latter $1.8 million was equal to theamount of ESAA funds Board had received before the repeal of ESAAand the enactment of ECIA and thus constituted that portion ofthe ECIA Chapter 2 block grant Board determined to allocate toimplementation of the Plan. All the remaining approximately $54.5million was derived from Board resources. (Glasper testimony)

309. Resources for the $87.7 million in incrementaldesegregation expenditures budgeted for school year 1983-84 arebeing provided as follows: approximately $65.4 million from localresources and approximately $22.3 million from federal resources.(Stip. 208)

310. Of the $22.3 million in federal resources provided to fundBoard desegregation expenditures, $20 million derives from theYates Bill, $1.8 million derives from ECIA Chapter 2 funds andapproximately $.5 million derives from ESEA Title VII. (Stip.209)

311. With respect to incremental desegregation expenditures,Board resources budgeted for desegregation implementationincreased by $10 million (or approximately 18%) from the levelbudgeted for the 1982-83 school year. Desegregationimplementation was the most significant area of programmaticexpansion undertaken by Board for school year 1983-84. (Stip.211; Glasper testimony; Bacchus testimony)

312. All the increase in federal resources received by Board inschool year 1983-84 for desegregation implementation isattributable solely to the $20 million appropriated by the YatesBill. (Stip. 212)

1983-84 Ancillary Desegregation Expenditures

313. Incremental desegregation expenditures do not includeexpenditures, referred to as ancillary desegregationexpenditures, that are made by Board to implement thedesegregation plan but are not identified by specific projectcodes and not included in the $87.7 million amount set forth inFinding 307. Included within ancillary desegregation expendituresare the costs of all "quota" or "formula" teachers at magnet andmagnet-type schools. For school year 1983-84 the cost of suchteachers is approximately $20 million. Also included in ancillarydesegregation expenditures are the costs of providing the basicsystemwide (or "formula") level of supplies and instructionalequipment at magnet schools, scholastic academies andmetropolitan high schools. (Glasper testimony)

314. Also included in ancillary desegregation expenditures arethe costs related to student transportation for the Disney MagnetSchool. This cost is approximately $1.6 million for school year1983-84.

315. Also included in ancillary desegregation expenditures arevarious central office and field administrative expendituresrelating to the implementation of the Plan. (Brady testimony;Glasper testimony)

316. Ancillary desegregation expenditures are expected tocontinue at approximately the 1983-84 level in future schoolyears. (Brady testimony; Glasper testimony)

317. Board does not contend that (a) these ancillary costsshould be included in the calculation of the amount required forfull implementation of the Plan or (b) the United States shouldbe responsible for funding all or a portion of such costs.However, these costs further emphasize that Board has devoted asubstantial amount of its total resources to the implementationof the Plan.

1983-84 School Budget — Board Resources and Expenditures

318. Evidence as to Board's present and projected financialcondition was presented through the testimony of Board's chieffinancial and business officers (J. Maxey Bacchus, Board'sBusiness Manager, and Rufus Glasper, its Director of Budgetingand Financial Planning) as well as through various Board budgetdocuments.

319. Board Ex. 43 is the Board's annual school budget for1983-84, which contains summary tables of Board revenue andexpenditures for the 1983-84 school year budget. (Stip. 216)

320. Board's four primary sources of operating revenue arelocal property taxes (34.6%), state school aid (45.6%), federaleducational assistance (13.8%), personal property replacementtaxes (3.8%) and miscellaneous (2.2%). (Stip. 217)

321. Rates at which Board can levy taxes for its four generaloperating funds (education, building, textbook and playground)are prescribed by the Illinois School Code (Ill.Rev.Stat. ch.122, ¶¶ 34-1 et seq.) and determined by the Illinois GeneralAssembly and not Board. Board is presently levying taxes forthose funds at the maximum rates authorized by the GeneralAssembly. (Stip. 218)

322. State school aid received by Board is determined byvarious formulae prescribed by the School Code, as determined bythe Illinois General Assembly and not Board. (Stip. 219)

323. Federal educational assistance received by Board isdetermined by (a) the amounts appropriated by Congress forvarious educational programs and (b) the manner in which theDepartment of Education and, in certain instances, the IllinoisState Board of Education determine to allocate these resources.Board does not have control over these determinations; its roleis limited to making applications and seeking to meet applicableeligibility and competition requirements. (Stip. 220)

324. Personal property replacement tax revenues are generatedthrough an income tax on corporations, an income tax onpartnerships and a tax on the invested capital on certain publicutilities. Those tax revenues are collected by the State ofIllinois and distributed to local taxing districts, includingBoard. (Stip. 221)

325. Personal property replacement tax revenue collections area function of the rates in effect for such taxes, as prescribedby the Illinois General Assembly. Personal property replacementtax revenues distributed to Board are determined pursuant to aformula prescribed by the General Assembly. Board does not havecontrol over those decisions. (Stip. 222)

326. In sum, as this Court said in Opinion I, Board "is not themaster of its own fate". 554 F. Supp. 912, 926. Except for its owntax levy, which has no available increment, Board's revenues arewholly determined by other governmental bodies and agencies,particularly the State of Illinois and the United States. To theextent Board has limited discretion over the amount of itsrevenues, such as the discretion to levy taxes up to a maximumamount permitted by state statute, Board has exercised suchdiscretion to maximize its revenues. (Stip. 216-22; Bacchustestimony; Board Ex. 155))

327. While Board has a limited ability to generate newresources, the United States, by sharp contrast, has the fullcapability of generating new resources or increasing existingresources. However the United States has not done so (and has infact taken extensive steps to limit the availability of funds fordesegregation implementation). (Board Ex. 57; Findings 401-67)

328. Of $1.455 billion in total Board operating expendituresbudgeted for school year 1983-84, approximately $1.162 billion(or approximately 75%) is budgeted for employee compensation,including pension and fringe benefits. All elements of employeecompensation are subject to negotiation between Board and thevarious employee groups with which it engages in collectivebargaining, including the Chicago Teachers' Union. Employeecompensation levels cannot be determined unilaterally by Board.(Stip. 223)

329. Of the same $1.455 billion, approximately $91 million isbudgeted for food and utilities, approximately $33 million forrepair and rehabilitation of school buildings and approximately$23 million for payment of tuition for handicapped children whocannot be served in the public schools. That tuition rate is setby the State Board of Education, not Board. In the aggregatethe various expenditure components described in Findings 328-29represent approximately $1.309 billion, or 90% of Board'sbudgeted operating expenditures for school year 1983-84. (Stip.224)

1979-80 Financial Crisis

330. Board suffered an acute financial crisis in November 1979.Its causes were the subject of various studies and commentaries,in particular a report of the Illinois General Assembly JointHouse and Senate Chicago Board of Education InvestigationCommittee. Its most immediate cause, however, was Board'sinability to engage in short-term borrowing. As a result itsuffered a severe cash shortfall. It was forced to decide whichof its obligations would be paid in timely fashion and whichwould of necessity be delayed in payment. By the latter part ofDecember 1979 Board was virtually without any available cash.Governor Thompson convened a meeting in Springfield in earlyJanuary 1980 to address Board's financial crisis. Participants atthat meeting agreed to a multi-faceted plan, including (a)adoption of the School Finance Authority Act (the "Act"), leadingto the creation of the Chicago School Finance Authority("Authority"); (b) a three-phased financing plan to provide fundsfor 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 educationalfund tax rate from 2.11% to 1.61% of equalized assessedvaluation, (ii) the appointment of a chief financial officer whohas responsibility for preparing and supervising Board's budgetand financial plan and who reports directly to Board and (iii)the expiration on April 30, 1980 of the terms of office of allBoard members who held office on January 16, 1980. (Stip. 225)

Relationship to School Finance Authority

331. Authority is a five-member body whose members areappointed by the Mayor and Governor and are not subject toapproval by the General Assembly. It was created to serve twobasic functions: (a) to exercise financial oversight and controlover Board; and (b) to issue bonds and notes to provide financingfor Board. It is to remain in existence until one year after thedate that all bonds and notes it has issued are paid in full. Itis currently anticipated Authority's obligations will not befully paid until 2009, so that it will remain in existence until2010. However, as discussed in the last paragraph of thisFinding, it is likely many of its powers will be suspended beforethat time.

Financial Control and Oversight Powers. The most significantpowers and responsibilities (and the corresponding duties imposedupon Board) are in the following areas:

(A) Budgets: Authority must approve or reject Board's annualbudget for each fiscal year. Each budget must contain suchinformation and detail as Authority may prescribe and must bebased upon the revenue estimates Authority approves or prepares.Board must submit its budget to Authority at least 45 days beforethe beginning of the fiscal year to which the budget relates, andAuthority is required to approve or reject Board's budget within30 days of its receipt. Standards are established by the Act forAuthority's review of the budget. It states Authority shallapprove any budget it believes to be complete, reasonably capableof being achieved and consistent with the Financial Plan then ineffect. Under the Act Authority does not have line-item vetopowers over the budget — it must either accept or reject thebudget in its entirety. Following the adoption of a budget for afiscal year, Board must notify Authority of any material changein its revenue or expenditure estimates for that year. Based onsuch changes Board may submit, or Authority may require Board tosubmit, a supplemental budget, or Authority may require Board totake other actions.

(B) Balanced Budget: Board is required to have a balancedbudget in accordance with the accounting system and proceduresAuthority prescribes. Authority has promulgated regulations togovern 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 orreject Board's Financial Plans. Each Financial Plan must cover aperiod of at least three fiscal years. It must contain adescription of revenues and expenditures, provision for debtservice, cash resources and uses, and capital improvements foreach fiscal year covered. Authority has promulgated regulationssetting forth the type of information and detail that must becontained in each Financial Plan. In connection with approvingeach Financial Plan, Authority must approve, reject or amendBoard's revenue estimates. It may also review Board's operationsand obtain budgetary data and financial statements. In general,Authority has a right of access to all information in Board'spossession that it deems relevant. Authority also may issuerecommendations or directives to Board to assure compliance withFinancial Plans and may require Board to submit modifiedFinancial Plans based upon revised revenue or expenditureestimates or for any other good reason. In the absence of abudget and Financial Plan that Authority has approved, the Actprohibits Board from making any expenditures other than forpayment of its debt service obligations. Authority's regulations,as amended, require Board to submit each Financial Plan toAuthority on or before the May 1 before the first fiscal year towhich the plan relates. Thus the Financial Plan for fiscal years1984-85 through 1986-87 was due May 1, 1984.

(D) Contracts: Authority has the power to adopt and amendregulations identifying categories and types of contracts andother obligations of Board that shall be subject to Authority'sapproval and the procedures for submitting contracts forapproval. Authority shall approve those contracts if, in itsjudgment, the information required to be submitted is completeand the contract is consistent with Board's budget and FinancialPlan then in effect. Authority has adopted regulations settingforth the types of contracts for which its approval will berequired. They include collective bargaining agreements,contracts involving an amount in excess of $10 million, contractsin excess of $1 million involving the disposition of realproperty and contracts creating an obligation to repay borrowedmoney.

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

(F) Accounting and Auditing: Authority may direct Board toreorganize its financial accounts, management and budgetarysystems in whatever manner Authority deems appropriate to achievegreater financial responsibility and efficiency. Authority alsohas the power annually to approve Board's appointment ofcertified public accountants to audit Board's financialstatements.

(G) Cash Management: Authority is authorized to require Boardto establish and maintain separate cash accounts and separatebank accounts in accordance with such rules, standards andprocedures as Authority may prescribe. Authority also may assumeexclusive administration of Board's cash accounts and bankaccounts and withdraw funds from such accounts for Board's lawfulexpenditures.

Duration of Powers: Authority will retain the power to approveor reject Board's budget and the power to examine its businessrecords and audit its accounts for as long as Authority remainsin existence. However, other powers of Authority set forth above(including without limitation the power to review and approveFinancial Plans and contracts and to require Board to appoint aChief Financial Officer) become suspended upon certification tothe Mayor and Governor that Board has completed three successivefiscal years with a budget balanced in accordance with standardsprescribed by Authority. But the Act also provides the suspendedpowers will be restored upon Authority's certification that Boardhas failed to adopt a balanced budget or failed to achieve abalanced budget for two successive fiscal years. It is generallythought Board's fiscal year ended August 31, 1982 was the firstfiscal year to qualify under this statutory definition, so thatBoard has now achieved two successive years of a "balancedbudget." (Stip. 226; Board Ex. 115)

332. Authority has approved Board's budget for school year1983-84 as complete, reasonably capable of being achieved andbalanced in accordance with accounting systems and proceduresprescribed by Authority. (Stip. 227)

Projected Deficits for Future Years

333. Board has adopted, and in December 1983, Authorityapproved Board's Financial Plan for fiscal years 1984-86. ThatFinancial Plan is Board Ex. 51. (Stip. 228) It projects thefollowing deficits: for fiscal year 1984-85 — $146.7 million; forfiscal year 1985-86 — $71.9 million. (Stip. 229)

334. Board's projected deficit for fiscal year 1984-85 is basedon projected expenditures of approximately $1.490 billion andprojected revenues of approximately $1.343 billion. Board'sprojected deficit for fiscal year 1985-86 is based on projectedexpenditures of approximately $1.532 billion and projectedrevenues of approximately $1.460 billion. (Stip. 230) Thoseprojections are based on a series of assumptions set forth atpages 3-1 through 3-8 of the 1984-86 Financial Plan. (Stip. 231)

335. Among the assumptions upon which the 1984-86 FinancialPlan is based are (a) no increases in employee salaries over thelevel in effect for school year 1983-84 (except for longevity or"step" increases relating to increased years of service); (b)certain percentage increases in federal funding; (c) no expansionof educational programs funded by general Board resources (asopposed to state-mandated or federally-funded programs); (d)continued funding for incremental desegregation expenditures ofapproximately $67.7 million (that represents a continuation ofdesegregation programs budgeted from Board funds for school year1983-84, but without the $20 million one-time appropriation fromthe 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 for1984-85 (as set forth in its Financial Plan) reflect a netdecrease of approximately $13 million resulting from (a) adecrease of $20 million (reflecting the one-time nature of thefunds appropriated by the Yates Bill) and (b) a net increase ofapproximately $7 million in various other federal funds receivedby Board, including ECIA, Chapter I funds.

337. In June 1983 the Illinois General Assembly restored to2.11% the maximum rate at which Board could levy taxes for itseducational fund. It also adopted legislation that providededucational fund taxes could be extended at the 2.11% ratebeginning in calendar year 1983. Absent this additionalamendment, the extension rate for calendar 1983 would haveremained at 1.61%, and Board would not have received an increasein cash receipts resulting from the tax rate increase until its1984-85 fiscal year. In essence the "extension rate" increaseallowed Board to take immediate advantage of the educational fundtax rate increase described above by collecting taxes that hadbeen levied in the prior calendar year but could not otherwisehave been collected. (Stip. 233)

338. Board's projected deficits for fiscal years 1984-85 and1985-86 included in the 1984-86 Financial Plan derive in partfrom an Authority directive that Board project educational fundtaxes will be collected in calendar year 1984 at a rate lowerthan 2.11% of equalized assessed valuation. Board believesAuthority's position is incorrect because the 2.11% rate shouldand will be applicable to calendar year 1984 educational fund taxcollections. In summary the nature and significance of thedisagreement 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.[fn7a]

(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.[fn8a] 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. 234)

339. Board and Authority agree that if Board's position as tothe applicable educational fund tax collection rate is correct,Board's Financial Plan would still project operating deficits ofapproximately $81 million for school year 1984-85 andapproximately $91 million for school year 1985-86. (Stip. 235)

340. Board does not have sufficient revenues from presentsources to cure the projected deficits for school years 1984-85and 1985-86 (which are based on the assumptions set forth inFinding 335). In fact, it may be virtually impossible for Boardto avoid annual financial crises or attain long-term financialstability in the near future. (Bacchus testimony)

341. Because Board's budget and financial affairs are subjectto Authority's review and oversight, and because of the intensiveand rigorous scrutiny and financial oversight provided byAuthority, Board's projections as to operating deficits in futurefiscal years are entitled to 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 fiscalyear 1983-84 of approximately $200 million. That projecteddeficit was eliminated, in part, as a result of Board's receiptof additional revenues. (Stip. 236)

343. Most significant of the revenue increases that contributedto the eliminationof Board's projected deficit for school year 1983-84 were (a) anincrease of approximately $100 million in educational fund taxesand (b) an "increase" of approximately $65 million in Statedistributive fund aid. In fact, almost all of this so-called"increase" represented no more than a restoration of State aid tothe level in effect for the prior school year. Also contributingto the elimination of this projected deficit were small increasesin miscellaneous revenues and various expenditure reductionseffectuated by Board. (Stip. 237; Board Ex. 115)

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

345. Board lobbied vigorously in support of both of thelegislative measures described in Finding 344. Its lobbyingactivities included meetings among the General Superintendent,Board members, and members of the General Assembly, and theGovernor and his staff. Board also organized rallies and publicdisplays of support for those legislative measures and draftedappropriate amendments to the School Code, which enabled Board totake immediate advantage of the increase in educational fund taxrates. (Bacchus testimony)

346. Board's commitment to increase expenditures forincremental desegregation programs by $10 million is anassumption upon which the projected deficit of $200 million forfiscal year 1983-84 was based. Therefore, Board's efforts toincrease its revenues for fiscal year 1983-84 were taken in partto fulfill its commitment to increase its incrementaldesegregation expenditures. (Bacchus testimony)

347. Since the entry of the Consent Decree, Board hasrepeatedly sought to obtain funding for desegregation from theState of Illinois. As a part of its efforts, Board has draftedand proposed legislation that would provide desegregation fundingfor Chicago. Such legislation is also included as a part ofBoard's legislative program for 1984. To date Board's efforts inthis regard have been unsuccessful. (Bacchus testimony)

348. Board's budget for school year 1983-84, as approved byAuthority, was balanced only after approximately $23.6 million inexpenditure reductions from Board's original proposal (includingat least approximately $12.2 million in reductions from theexpenditure level for the 1982-83 school year). Proposeddesegregation expenditures were not reduced. (Bacchus testimony;Glasper testimony)

349. In the summer and fall of 1983, Board encountered aprolonged dispute with the collective bargaining representativesof its employees, including the Chicago Teachers' Union. Thisincluded a three-week strike of Board employees, whose principaldemand was for increased compensation. Board employee groupsspecifically and consistently demanded that Board delete itsproposed $10 million increase in desegregation expenditures anddevote those funds to increased employee compensation. Boardsuccessfully resisted that demand and preserved the proposedincrease in desegregation expenditures for its 1983-84 schoolyear budget, thereby complying with Board's previously madecommitment and determination as to its level of desegregationexpenditures in 1983-84. (Bacchus testimony)

Federal and State Funds Received by Board

350. Board submitted applications for an ESAA grant in fiscal1981 and for Title IV grants in fiscal years 1980 and 1981 aspart of those programs' regular grant review process. Board's1981 ESAA application was for approximately $23.8 million, andthe amount of the grant was $1.8 million. Board's awards of$422,800 in fiscal 1980 and $298,639 in fiscal year 1981 were thelargest 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$9 million and$13 million for funds from the Secretary's Discretionary Fund.Those applications were ranked by the Department of Education13th and 28th, respectively, out of 34 applications received inthe priority area for which they were filed. Only 10 programswere funded. (Stip. 337)

352. ECIA Chapter 2 consolidates, on a block grant basis,several programs for which Board previously received funds on acategorical basis. Among the programs consolidated are: BasicSkills (ESEA Title II); Instructional Materials and SchoolLibrary Resources (ESEA Title IV-B); Improvement in LocalEducational Practice (ESEA Title IV-C); Emergency School Aid(ESAA Title VI); and Teacher Corps (Higher Education Act. TitleV-A). As a result, Board receives approximately $5.5 to $6million annually in block grant funds (allocated and distributedby the State Board of Education) appropriated to finance avariety of educational programs, some of which are continuationsof previously funded categorical programs and some of which arenewly implemented and established programs. Board is allocatingapproximately $1.8 million — an amount equal to what it receivedunder ESAA prior to its repeal — of its Chapter 2 block grant todesegregation purposes in fiscal year 1983-84. (Stip. 210;Bacchus testimony; Glasper testimony)

353. Board received federal assistance before the ConsentDecree, and continues to receive such assistance today, under thevarious federal programs referred to by the United States.Together those funds, including ECIA Chapter I, encompass thecategorical federal educational assistance received by all schooldistricts in the United States, including Board, for essentialbasic educational programs. Those funds have been and continue tobe received by Board on the basis of criteria that are unrelatedto and do not take into account either the Consent Decree or thecosts 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:[fn9a]

(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 ofthe ECIA on urban school districts undergoing desegregation (andin particular Chicago), the Secretary has opposed efforts tore-enact ESAA or otherwise authorize special assistance fordesegregation activities. (Secretary Bell's letter to Sen. Hatch,October 18, 1983, in Board Ex. 118)

356. Amounts received by Board in school years 1978-79 through1983-84 from the Department of Education under Chapter 1 of theECIA and the antecedent program to Chapter 1 (Title I of theElementary and Secondary Education 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"reasonable expectation of the parties at the time of signing theConsent Decree" that Chapter 1 (formerly ESEA Title I) funds towhich Board was already entitled would constitute all or part ofthe United States' contribution to funding the Plan. There was noconsiderationor discussion of this subject at that time. (United States'Answers to Board's Sixth Interrogatories, No. 1.) No basis existsfor finding such an expectation.

358. Chapter 1 is intended to serve the lowest-achievingchildren within a particular attendance area. Its statutoryscheme is race neutral. It is a scheme that targets funds toschools with the highest concentration of low income children whoare Chapter 1 eligible. Within a school eligible for Chapter 1funding, however, the selection of children to be served byChapter 1 programs is determined by achievement level, regardlessof an individual child's poverty. (Fagan testimony)

359. In educators' terms an educationally deprived child is achild whose achievement is below the average achievement levelfor children of the same age. For children like those attendingthe Chicago public schools, whose achievement is measured by theIowa Testing Battery, educational deprivation refers toachievement scores below the 50th percentile. Black and Hispanicchildren are generally lower achieving than their whitecounterparts when they enter the educational system. That meansa greater preponderance of Black and Hispanic children are belowthe 50th percentile when they enter the educational system, andthe preponderance does not change as they progress through thesystem. (Fagan testimony)

360. It is a goal of the Chapter 1 statutory scheme to move alow achieving child toward grade level and sustain those gains.Removing a child from a Chapter 1 Program would threaten anyexisting achievement level gains. Removing a child from a Chapter1 program for the summer could threaten any gains that occurredduring the preceding school year. (Fagan testimony)

361. All of the approximately 40% of children in raciallyidentifiable schools who are served by Chapter 1 programs were orare projected to fall further behind grade level achievementnorms as they progress through the system. They start first gradesignificantly behind majority and minority children of the sameage who are attending the same or other schools. Chapter 1programs are intended to start those below-grade level minoritychildren closer to other children, and to keep them from fallingfurther behind as they move through the system. (Brady testimonyand inference 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 ESPprogram was implemented in the 1983-84 school year, 55 are servedby Chapter 1 programs. Of the 100 schools receiving Level IIintervention in school year 1983-84, 42 are not served by Chapter1 programs. (Based on U.S. Ex. 23 and Stip. 151 with accompanyingtables)

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's100 Level II ESP schools have a total enrollment of 67,029, ofwhich 10,866 are served by Chapter 1 programs. (Based on U.S.Exs. 23 and 37 and Stip. 151 with accompanying tables)

364. Certain of Board's Educational Components are not eligiblefor Chapter 1 funding because they are not designed to meet thespecial educational needs of educationally deprived children, donot serve low-income schools or are central or system-wide incharacter. (Fagan testimony)

365. Chapter 1 programs and Board's ESP program could worktogether to provide an extra benefit to Chapter 1 eligiblechildren in terms of closing the achievement gap between Blackand Hispanic children and the average achievement level for allchildren of the same age. (Fagan testimony)

366. Test results demonstrate the Chapter 1 and State Title Iprograms have only marginally narrowed the initial achievementgap for segregated minority children who begin first grade inracially identifiable schools, and have done no more thanmarginally reduce the rate by which they fall further behindgrade level. (Brady testimony)

367. State Title I funds received by Board as part of itsgeneral State aid, including both the systemwide and targetedportions of such funds, are intended to provide resources toBoard for the higher costs of providing basic and compensatoryeducation to low income, educationally deprived children. Thosefunds were already being received by Board at the time theConsent Decree was signed. Consent Decree § 2.2 was intended toprovide supplemental educational programs, rather than merely tomaintain programs then in existence. Simply to shift money fromState Title I programs to pay for desegregation programs wouldeliminate any supplemental character of the desegregation remedy.(Bacchus testimony)

368. Among other goals, the Educational Components weredesigned (a) to give minority children an opportunity for anequal start after decades of segregation and (b) to assist thosealready in the system who are behind and falling further behindto catch up. That achievement gap is an obvious pernicious effectof segregation, which any constitutional plan must address withviable programs. Simply to shift money from Chapter 1 and StateTitle I programs to pay for desegregation programs wouldeliminate any supplemental character of the desegregation remedy.(Based on Bacchus, Brady testimony)

Board's Good Faith Efforts

369. As of June 30, 1983 Board had already expendedapproximately $120 million in its efforts to implement fully thevarious elements and components of the Plan, and had appropriatedapproximately $67 million for this purpose in school year1983-84. Those actions were taken at a time when Board wassuffering severe financial constraints and projecting a budgetdeficit 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. Inlight of these facts, this Court found in Opinion II that fromSeptember 24, 1980 to June 30, 1983 Board had made every goodfaith effort to find and provide every available form offinancial resources adequate to pay the costs of fullimplementation of the Plan. (Findings 3-7, 567 F. Supp. at 274).

370. During the same time period (as of June 30, 1983, whenBoard had expended $120 million) the United States provided onlyabout $2.5 million in direct desegregation assistance (almost allin fiscal 1981), despite the fact it had substantial additionalfunds available that it could have provided to Board had it madeevery good faith effort. (Glasper and Bacchus testimony)

371. Board's good faith compliance with the Consent Decree inits allocation of resources among competing needs has beendetermined as a factual matter in Opinion II, Finding 3, 567F. Supp. at 274. That determination was not appealed, and it isthe law of the case. Comparable decisions made by Board in itsallocation of available resources since June 30, 1983 and for thefuture also constitute every good faith effort. (Glasper, Bradyand Bacchus testimony)

372. In light of the fact the Educational Components of thePlan were intended to provide a supplemental remedy for minoritystudents attending racially isolated schools, Board has sought,from both the United States and the State of Illinois, newresources for the Plan that are supplemental to those alreadybeing provided. As an example, Board has succeeded in obtaininga restoration of previously unavailable taxing authority from theState of Illinois. To the extent Board is unable to obtain newresources, however, Board faces a Hobson's choice between (a)inability to implement the Plan and (b) allocating funds toimplement the Plan by shifting existing resources or revenueincrements from other educational obligations and priorities. Inexercising its narrow areas of choice, Board has made every goodfaith effort to provide funds, in compliance with the ConsentDecree. (Bacchus testimony; Glasper Testimony)

373. Consent Decree § 15.1's good faith obligation does notrequire Board to reallocate unlimited amounts of its generalrevenues away from basic educational programs to the Plan. Boardis in full compliance with the Consent Decree without doing so.Nor does the good faith obligation of the Consent Decree requireBoard to reallocate more State Title I funds to pay desegregationexpenses. Board is in full compliance with the Consent Decreewithout doing so.

374. Board's decision to allocate approximately $1.8 million ofits 1983-84 ECIA Chapter 2 block grant to incrementaldesegregation expenditures constitutes "good faith efforts" underSection 15.1. (Bacchus testimony)

375. Board's decision to budget approximately $67.7 million ofits 1983-84 operating revenues (excluding the moneys appropriatedby the Yates Bill) for incremental desegregation expendituresconstitutes "every good faith effort" under Section 15.1. Underthe present circumstances, a decision to budget such amount ofoperating revenues for incremental desegregation expenditureswould also constitute "every good faith effort" for the 1984-85school year. (Bacchus testimony; Glasper testimony)

376. In light of Findings 301-75, Board has continued sinceJune 30, 1983 to make every good faith effort to find and provideevery available form of financial resources adequate to pay thecosts of full implementation of the Plan.

Addendum A to Findings 301-76

State Title I Overview

To understand the relationship between desegregationexpenditures and State Title I school aid, an overview of Stateaid to education in general and of State Title I funding inparticular is necessary. Board receives Common School Fund StateAid (often called "general State aid" or "State distributive fundaid"), distributed by the State Board of Education through theCook County Regional Superintendent of Schools. Amounts sodistributed to Board (as well as to other school districts inIllinois) are determined by a mathematical formula set forth inSection 18-8 of the School Code, Ill.Rev.Stat. ch. 122, ¶ 18-8.That formula computes the level of State aid to school districtson the basis of each pupil counted in a district's "average dailyattendance." Average daily attendance is defined as (a) the sumof all student attendance days reported over certain periodsduring each academic year divided by (b) the number of days ofinstruction held during such periods. In computing the amount ofsuch 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 CommonSchool Fund State Aid distributed to Illinois school districts isto be based on the number of economically disadvantaged childrenenrolled in each district. That portion is identified as StateTitle I aid and is based on the number of "Title I eligible"students in the district, "Title I eligible" being definedpursuant to Chapter 1 of ECIA (the Education Consolidation andImprovement Act of 1981), formerly Title I of ESEA (theElementary and Secondary Education Act of 1965). In essence a"weighting" factor is assigned to each Title I eligible studentcounted in a school district's average daily attendance so thateach Title I eligible student "counts" as more than one studentfor purposes of the average daily attendance formula describedabove. Ill.Rev.Stat. ch. 122, ¶ 18-8.1(n)

State Title I aid (and other forms of financial assistancesimilar in nature and purpose to State Title I aid) has beenreceived by Board since approximately 1968. Before the 1979-80school year, however, Board was not required to direct or"target" State Title I funds in relation to the enrollment ofState Title I eligible children. Rather those funds were includedas part of Board's general resource base and were expended withother resources (primarily local property taxes and Common SchoolFund State Aid) to fund system-wide educational programs andservices.

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 certainportion (the "targeted" portion) of State Title I aid received byBoard was to be allocated to schools in proportion to the numberof Title I eligible pupils enrolled, while the remainder (the"non-targeted" portion) was to be allocated to schools inproportion to their total student enrollment. Though theseproportions are subject to some minor fluctuation from year toyear, the targeted portion of State Title I aid is approximately55% 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 wasapplicable to one-third of the State Title I aid received thatyear. Targeting was applicable to two-thirds of State Title I aidreceived in school year 1980-81 and became fully applicable toall State Title I aid received in school year 1981-82 (and everysubsequent year).

To demonstrate compliance with the statutory targetingrequirements, Board annually submitted (and continues to submit)to the State Board of Education a plan indicating thedistribution of State Title I aid among all schools in thedistrict and the purposes for which such aid was to be used. Inother words, for each school receiving targeted State Title Iaid, Board indicated the amount of such aid and the programseligible to receive funding from such aid. All those programswere required to be "State Title I eligible programs," asdetermined by regulations promulgated by the State Board ofEducation.

In substantially all instances (except as described below forcertain desegregation programs initiated in school year 1981-82),the programs enumerated as "Title I eligible" were programspreviously established by Board and previously funded from itsgeneral resource base (which included local resources and CommonSchool Fund State Aid, including State Title I aid). They werenot, by and large, new programs established after theimplementation of the statutory targeting requirement. Statedanother way, for purposes of complying with the State Title Itargeting requirements, Board "attributed" certain of its ongoingeducational programs, previously funded from Board's generalresource base, as being funded from State Title I aid.10.

For school years 1979-80 and 1980-81 Board was able to complywith the statutory targeting requirement without any reallocationof State Title I aid among schools within the district. However,in school year 1981-82 Board was required to "reallocate"approximately $17 million of State Title I aid to ensure that asufficient amount was distributed to schools in proportion to thenumber of Title I eligible pupils enrolled (i.e., to ensure thatthe statutory targeting requirement was complied with). Thatreallocation resulted in the identification of new programs atthose schools that received the "supplementary allocation" ofState Title I aid.

Board Desegregation Expenditures

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

Project Code 946. As described above, a reallocation11. ofcertain amounts of State Title I aid received by Board for schoolyear 1981-82 caused certain schools to receive a larger amount ofState Title I funds than they had received in prior years.Schools that received the supplementary allocation of State TitleI aid were certainof the schools classified as racially isolated schools pursuantto the Plan.

Board used those "reallocated" State Title I funds in schoolyear 1981-82 to provide one source of funding for programsinitially implemented in that year as part of the Plan'sEducational Components at those racially isolated schools.12.Board was not required to use the supplemental allocation ofState Title I aid to fund desegregation purposes at theseschools. To the contrary, such funds could have been used toimplement any one or more of a myriad of "State Title I eligible"programs. However Board, in seeking to provide the necessaryfunds to implement at least a portion of the program elements ofthe Plan's Educational Components, chose to use the supplementalallocation of State Title I aid to fund certain of itsdesegregation programs.

Appropriations and expenditures attributable to thatsupplemental allocation of State Title I funds are designated byproject codes 946/947 (946 referring to employee salaries andrelated expenses and 947 referring to expenses for instructionalmaterials).

Board has continued, in schools years 1982-83 and 1983-84, touse that supplemental allocation of State Title I aid to fund aportion of the Plan's Educational Components. Again the decisionto use such funds to support desegregation programs is made byBoard, not as required by State law or regulation. As a result of(a) fluctuations in the amount of State appropriations foreducation, (b) changes in the Common School Fund State Aidformula and (c) changes in the number and attendance area of"Title I eligible" children, the total amount of the supplementalallocation has varied between $15 and $17 million per year (withthe amount allocated to each school also changing annually tosome extent).13.

Project Code 512. Desegregation expenditures attributable toProject Code 51214. are those that relate to components of thePlan initiated during and carried over from Access to Excellence— Board's prior desegregation program. When Access to Excellencewas initiated in school year 1978-79, expenditures made underthat program were designated as "512" in order to account forthem separately.

At its inception, Access to Excellence was a new program — anincrement to Board's previously existing level of appropriationsand expenditures. Moneys to fund the program were provided fromBoard's general resource base. Stated another way, the cost ofimplementing the desegregation programs initiated under Access toExcellence was met by an increase in Board's overall resourcebase, a reduction in expenditures for other programs or acombination of the two in school year 1978-79 — the year inwhich implementation was initiated.

When the "targeting requirements" for State Title I aid wereimplemented beginning in school year 1979-80, Board attributedthe funding for various of its previously established and alreadyexisting educational programs to State Title I aid. That was doneto demonstrate State Title I aid was in fact being used tosupport programs designed to meet the "educational needs ofdisadvantaged children." However the imposition of the targetingrequirement did not require that new programs be established.Instead Board wasrequired to demonstrate that it was providing a sufficient amountof educational services that the State Board of Educationconsidered as "Title I eligible." Among the programs included inthose attributable to "State Title I" aid were the desegregationprograms previously initiated under Access to Excellence.

But such attribution was no more than a record-keeping matter.It did not result in the implementation or initiation of newprograms. Board merely treated the Access to Excellence programsas being funded from State Title I aid, whereas it had previouslymade no effort to identify the source of funding for thisprogram. Again the attribution process was undertaken simply tocomply with the statutory targeting requirement established forState Title I aid.

In other words, State Title I aid funds attributed to (a)Project Code 512 desegregation programs and (b) other componentsof Board's general resource base are fungible. Board is simplyunder a statutory obligation to demonstrate it is providing therequisite amount of "State Title I funded" services at allschools in the system. It may comply with that requirement byattributing the cost of previously established programs to StateTitle I aid if those programs are considered by the State to beeligible.

Attribution of the funding for those desegregation programs(identified by Project Code 512) to State Title I aid hascontinued to the current school year. What is significant,however, is that even if those programs were hypotheticallyeliminated by Board, it is most likely that another previouslyestablished and funded program would then be attributed to StateTitle I aid, so that the funds presently budgeted for thosedesegregation programs would be available to Board for otherpurposes.

In summary, the only significance of the relationship between"Project Code 512" desegregation expenditures and the State TitleI program is that all desegregation appropriations designated as"512" appropriations are also considered as "State Title Ieligible" programs.

Summary

Project Code 512 and 946 expenditures are the onlydesegregation expenditures that are in some way "attributable" toState Title I aid, as described above. Such "attribution" of"512" expenditures to State Title I funds is simply an accountingor bookkeeping concept used in connection with the need todemonstrate compliance with the statutory targeting requirements.All desegregation expenditures (other than those funded fromfederal sources) are appropriately attributable to general Boardresources. (Board Ans. to U.S. Second Set of Interrogatories;Bacchus testimony)

Availability of Federal Funds To Implement the Chicago Desegregation Plan

Presently Available Funds

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

402. In each of fiscal years 1983 and 1984 Secretary allocated$24 million to provide grants through Title IV of the CivilRights Act of 1964, 42 U.S.C. § 2000c-2 — 2000c-4. (Opinion IIFinding of Fact No. 34, 567 F. Supp. at 277; Stip. 305)

403. There is no duty imposed on Secretary to provide fiscalyear 1984 Title IV funds for awards to continuing grantees undermulti-year grant contracts. (United States' Response to Board'sSecond Request to Admit No. 18; Stip. 305).

404. All multi-year awards of Title IV funds are subject toSecretary's regulations at 34 C.F.R. § 75.253, which statecontinuation of these grants is contingent upon Secretary'sfinding that sufficient program funds are available for thesegrants and that it is in the best interest of the United Statesto provide these continuation awards.

405. All fiscal year 1984 funds allocated for the Title IVprogram are currently unobligated. Secretary has notified allapplicants for (and his selected recipients of) 1984 Title IVfunds that all grant awards are contingent upon the outcome ofthe present litigation. (48 Fed.Reg. 56254, 56255, December 20,1983)

406. For fiscal year 1982 and subsequent years, the Departmentof Education determined the appropriation available under TitleIV of the Civil Rights Act of 1964 would be used fordesegregation assistance centers (DACs) and state educationagencies (SEAs), rather than direct grants to local educationagencies and training institutes. (Stip. 336)

407. In fiscal year 1983 Secretary provided no Title IV fundsdirectly to local educational agencies through the grant programauthorized at 42 U.S.C. § 2000c-4. (Harrison Dep. 26, 35-36;United States' Response to Board's First Request to Admit, No.15; Christensen testimony)

408. Many of the inservice and advisory programs in Board'sEducational Components were (with regard to federal fiscal year1983 funds) and are (with regard to federal fiscal year 1984funds) and are (with regard to federal fiscal year 1984 funds)eligible for Title IV race and national origin desegregationassistance through the program authorized at 42 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 andinservice training programs for Title IV funds where theycontribute, develop or disseminate information or skills thatmaterially assist in the effective implementation of adesegregation plan. Secretary has approved training, staffdevelopment and advisory services for Title IV funds where hefinds they are related to and materially assist in implementinga desegregation plan. (Board Ex. 72, Decision Memoranda Nos. 137,123, 114, 90, 49, 15; Board Ex. 72, Decision Memoranda Nos. 137,123, 114, 90, 49, 15; Board Ex. 75, Technical Review of Board's1981 Application for Title IV Assistance; Board Exs. 104, 105,106, Technical Review of Board's 1980 Application for Title IVAssistance)

410. Secretary has approved inservice training and advisoryactivities for Title IV funding in connection with programsdesigned to raise minority pupils' academic achievement wherethese programs were required educational remedies in acourt-approved desegregation plan and were supplemental to aschool district's pre-existing compensatory education or basicskills programs. (Harrison Dep. at 66)

411. Secretary has also approved for Title IV funding inservicetraining and advisory activities in connection with programsdesigned to raise minority pupils' academic achievement, wherethe inservice and advisory activities were specifically directedtoward educational techniques or instructional strategies toteach minority pupils effectively. (Harrison Dep. 65)

412. Secretary's 1981 Decision Memoranda, which constitute hisnotices of the amount and purposes for which Title IV grantawards were made to local educational agencies, accuratelydescribe the types of programs or activities for which Secretarymakes Title IV funds available. (Board Ex. 72)

413. In fiscal years 1980 and 1981 Board applied for andreceived Title IV grants in the amounts of $422,800 and $298,639,respectively. Secretary approved those grants, based upon theinservice and advisory programs described in Board'sapplications, for activities in connection with the planning andinitial implementation of Board's Educational Components. In bothfiscal years 1980 and 1981 Secretary found that all inservice andadvisory programs for which Board sought Title IV funds, asdescribed by Board in its applications, were activitiesauthorized for Title IV assistance. (Board Exs. 73, 74, Board's1980 and 1981 Applications for Title IV Application; Board Ex.75, Review of Board's 1981 Application for Title IV Assistance;Board Exs. 104, 105, 106, Review of Board's 1980 Application forTitle IV Assistance; 1980 Decision Memoranda No. 37)

414. In providing Title IV grants to local educational agenciesthrough the program authorized by 42 U.S.C. § 2000c-4, Secretaryhas not since 1978 held grant award competitions. (43 Fed.Reg.111676, 11677 and 11686, March 20, 1978; 43 Fed.Reg. 32372,32379, July 26, 1978). Instead Secretary has made Title IVassistance available at various times throughout each such fiscalyear on an application-by-application basis. (Id.;34 C.F.R. § 270.74(a)) Funding decisions with respect to individualapplications for Title IV funds were made as applications werereceived. (Id.; Harrison Dep. 61) No numerical criteria were usedto evaluate individual applications, and no rank ordering ofapplications was made. Secretary made only a recommendation toaccept or reject a particular application for Title IV funds onthe basis of the selection criteria specified at34 C.F.R. § 270.74(b)(1)-(5). (Id.; Harrison Dep. 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 relevantfactors" in awarding Title IV funds, 42 U.S.C. § 2000c-4. (Seee.g., 40 Fed.Reg. 12346, 12350, § 180.44, March 17, 1975)

416. Certain provisions of Secretary's Education DepartmentGeneral Administrative Regulations ("EDGAR"), including theprovisions at 34 C.F.R. § 75.105 that permit him to establishprogram priorities, competitive preferences and absolutepreferences, apply to the Title IV grant program. (34 C.F.R. § 75.1; 75.2, 270.02(e))

417. In each of fiscal years 1983 and 1984 Congressappropriated $28,765,000 for Secretary's Discretionary Fund,20 U.S.C. § 3851. (Stip. 309; United States' Response to Board'sFirst Request to Admit Nos. 29, 31; United States' Response toBoard's Second Request to Admit No. 23; P.L. 98-139, Title III,97 Stat. 888) Of this sum, Secretary is required to use$10,725,000 to fund the statutorily mandated programs specifiedin 20 U.S.C. § 3851(b). (United States' Response to Board'sSecond Request to Admit No. 11) Secretary was authorized infiscal years 1983 and 1984 to spend the remaining $18,040,000reserved for Secretary's Discretionary Fund for the purposes orprograms specified in 20 U.S.C. § 3851(a). (Christensentestimony)

418. That sum of $18,040,000 appropriated to Secretary'sDiscretionary Fund in fiscal year 1984 is currently unobligated.Secretary has notified all applicants for (and his selectedrecipients of) those funds that their availability to financegrant awards is contingent upon the outcome of the presentlitigation. (49 Fed.Reg. 7551, February 29, 1984; 49 Fed.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 awardsof discretionary funds are subject to Secretary's regulations at34 C.F.R. § 75.253, which state that continuation of these grantsis contingent upon Secretary's findings that program funds areavailable for these grants and that it is in the best interest ofthe United States to make these continuation awards. (Board Ex.107, exemplary grant contracts)

420. Secretary usually applies the EDGAR provisions relating tothe selection of projects for funding after a rank ordering ofall applications for grants from the Discretionary Fund. However,Secretary makes the final selection of those applications forfunding, and he may change the order in which applications willbe funded based upon any information in the application, anyother information he deems relevant to the program criteria andany priorities he has established to set aside or otherwise usehis discretionary funds. Moreover, Secretary's authority tocreate preferences and priorities subsumes those "competitive"selection procedures. He may use those preferences and prioritiesto create a program for a single applicant, reserve discretionarymoneys for that applicant without regard to the EDGAR competitiveselection 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 ofHouse or Senate Appropriations Committees "recommend" or"encourage" such financing. (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" forparticular program expenditures by language in AppropriationsCommittees' 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 $47,447,000generally to the Special Programs and Populations account tofinance the following subaccounts: Title IV; Follow Through;Territorial Teacher Training; Aid to the Virgin Islands; Women'sEducation Equity. (Stip. 304) Particular sums were notstatutorily earmarked or allocated for any of those subaccounts.(P.L. 98-139, Title III, 97 Stat. 888; United States' Response toBoard's Second Request to Admit No. 17; Christensen testimony)

424. Of the $47,447,000 appropriated in fiscal year 1984 forTitle IV and the four subaccounts in the Special Programs andPopulations account, $23,447,000 was allocated for those othersubaccounts and $24 million was allocated for the Title IVsubaccount. (Christensen testimony; Board Exs. 57 and 64)

425. Secretary could legally reprogram into the Title IVsubaccount $13,100,000 of the $23,447,000 allocated to the otherSpecial Programs and Populations subaccounts. After such areprogramming, Secretary could allocate the balance of theappropriation to the other Special Programs subaccount as hewould deem appropriate. That remaining balance would permitSecretary to fund each other Special Programs subaccount at ameaningful level. (Inference from Christensen testimony)

426. No statutes or administrative regulations addressSecretary's authority to reprogram funds between subaccounts inan appropriation account. Secretary's reprogramming policies orpractices derive from his relationship with congressionalappropriations committees and guidelines issued by thosecommittees. (Christensen testimony; Harrison Dep. 138-39)

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

428. Secretary acknowledges that, notwithstanding this policy,he has the legal authority to reprogram into the Title IVsubaccount fiscal year 1984 funds from the other Special Programsand Populations subaccounts after notifying the chairmen of thetwo congressional appropriations committees of his intention todo so. (Christensen testimony; Harrison Dep. at 138-139; BoardExs. 68, 69). Most significantly for current purposes, however,whether or not Secretary has such legal authority (or whether heviews the matter as controlled by practical considerations suchas his relationships with Congress), Secretary has made no effortwhatever to take steps to reprogram funds to honor the UnitedStates' obligations under Consent Decree § 15.1 — either byapplication to Congress or on his own, and either before or sincethe Court of Appeals' decision "provide[d] the Department anopportunity to fashion its proposed remedy for pastnon-compliance, as well as a chance to show that it intends tocomply in the future. . . ." 717 F.2d at 385.

429. From 1979 through the present, Secretary formallyrequested approval from congressional appropriations committeesfor sixteen reprogrammings of funds. Eleven of thesereprogramming requests were approved and five were disapproved.One of those reprogrammings was designedspecifically to provide for a single program (PUSH-EXCEL), whichwould have been eliminated absent the reprogramming. During thesame period Secretary also effected two reprogrammings withoutseeking congressional approval. (Christensen testimony; BoardExs. 68, 69)

430. As indicated in the grant contracts, all multi-year awardsof funds from any of the Special Programs and Populationssubaccounts 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 areavailable and that it is in the best interest of the UnitedStates to make such continuation awards. (Board Ex. 107,exemplary grant contracts)

431. All the $23,447,000 allocated to the four Special Programsand Populations subaccounts (not including Title IV) is currentlyunobligated. Secretary has notified all applicants for (and hisselected recipients of) those funds that their availability forgrant awards is contingent upon the outcome of the presentlitigation. (See e.g., 48 Fed.Reg. 53149, November 25, 1983; 48Fed.Reg. 55898, December 16, 1983)

432. Fiscal year 1982 funds not used by fiscal year 1982 FollowThrough and Title IV grantees ("carryover funds") aggregated$1,087,555, consisting of $440,300 in Follow Through funds and647,255 in Title IV funds. (United States Answer to Board'sSecond Set of Interrogatories, No. 11) Secretary had theauthority to allow the grantees to expend those funds in fiscalyear 1983, or to require that grantees return those funds to theUnited States. However, pursuant to Opinion II, those"carry-over" funds were applied by the original grantees tofiscal year 1983 programs. Accordingly an equal amount of fiscalyear 1983 funds has been set aside in the Department ofEducation's accounts. (Stip. 318) That $1,087,555 in carry-overfunds is available for expenditure in fiscal year 1984.

433. Board Ex. 88 was prepared by the United States. (UnitedStates Answer to Board's Second Set of Interrogatories, No. 9) Itsets forth the amount of funds from Department of Educationappropriations that lapsed in fiscal year 1981 and 1982. It alsoshows that $21,188,206 of non-desegregation funds from variousDepartment of Education appropriations would have lapsed infiscal year 1983, except that those funds were escrowed by thisCourt. (Stip. 315)

434. "Lapsed funds" are funds appropriated to variousnondesegregation programs of the Department of Education thathave not been obligated at the end of the fiscal year and thattherefore revert to the United States Treasury. Legislation wouldbe required to reallocate lapsing funds and make such fundslegally available for and provide them to Board. Secretary maynot provide such lapsed funds to any grantee withoutcongressional authorization. Such funds could be allocated toBoard for its desegregation activities through a congressionalreappropriation. (Stip. 314; Christensen testimony)

435. As represented in the Appendix to the President's Budgetfor fiscal year 1985, it is estimated that at the end of fiscalyear 1984 the following amounts of funds appropriated to theDepartment of Education will remain unobligated and otherwiselapse:

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

(Board Ex. 57)

436. Department of Education's Office for Civil Rights entersinto contracts with various organizations to provide technicalassistance to local educational agencies. That program isintended to assist local educational agencies in complying fullywith Title VI requirements. (S.Rep. No. 247, 98th Cong. 1st Sess.163-64 (1983)). It was created by the Office for Civil Rightspursuant to its authority to make any payments necessary to carryout 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'sSalaries and Expensesubaccount, Secretary has financed program administrationactivities, including policy analyses, special projects, advisorycommittee operations and program evaluation contracts. (Board Ex.57, Appendix to the Budget for Fiscal Year 1985, at I-I22)

438. This Court has not been advised by the United States as tothe amount, in funds or other property, currently withinSecretary's Salary and Expense subaccount, Office for Civilrights subaccount or Secretary's Gift and Bequest account.

Actions by the United States Affecting the Availability of Funds

439. As the following specific Findings in this sectionreflect, since the entry of Opinion II nearly a year ago — June30, 1983 — the United States has taken no action to providepresently available funds to Board. Rather it has engaged inconduct designed to render unavailable both existing funds andany future sources of funds that could be used for implementingBoard's Desegregation Plan. For over nine months (since the Courtof Appeals decided on September 9, 1983 the United States was indirect violation of its obligation under Consent Decree § 15.1)that course of conduct has been in direct contravention of theCourt of Appeals' granting the United States "an opportunity tofashion its proposed remedy for past non-compliance, as well asa chance to show that it intends to comply in thefuture. . . ." 717 F.2d at 385.

440. Secretary has failed or refused to provide to Board any ofthe previously restrained 1983 funds that became available fordistribution to grantees, including Board, pursuant to thisCourt's November 21, 1983 Order. (Motion of the United States toModify the June 30 Order and Supporting Memorandum, filedFebruary 2, 1984; Plan of the United States, filed November 10,1983).

441. No request whatever for funding for Title IV of the CivilRights Act of 1964 ("Title IV") was included in the Budget forthe Department of Education submitted and proposed by theExecutive Branch for federal fiscal year 1984 (the "President'sBudget"). (A2-15) (Stip. 302; Board Ex. 57)

442. From the available fiscal year 1984 funds appropriated forthe Title IV program, Secretary intends to provide no directgrants of Title IV funds to any local educational agency,including Board. (United States Response to Board's SecondRequest 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 toprovide desegregation assistance through Title IV in fiscal year1985. (Board Exs. 56 (at 107-108) and 57)

444. No request for funding the Women's Educational EquityProgram, the Follow Through Program, Aid to the Virgin Islands,and the Territorial Teacher Training Program (collectively "theother Special Programs") was included in the President's Budgetfor fiscal year 1984. (United States' Response to Board's SecondRequest to Admit, No. 16; Stip. 303) Those programs are thesubaccounts currently subject to Opinion II. (Christensentestimony)

445. Secretary does not intend to reprogram to the Title IVsubaccount any fiscal year 1984 funds appropriated for theDiscretionary Fund or allocated to the other Special Programs.Section 309 of the ECIA (enacted in 1981) had the effect oflimiting to $13,100,000 the amount of fiscal year 1984 funds theSecretary theoretically could reprogram to Title IV. There is nosuch limit for fiscal year 1985. (Stip. 313)

446. From the available fiscal year 1984 funds appropriated byCongress and allocated to the Special Programs and Populationssubaccounts, Secretary has not reprogrammed and does not intendto reprogram moneys into the Title IV subaccount. (Stip. 313)

447. Finding 429 reflects Secretary's prior efforts towardreprogrammings of funds. Secretary has never sought or requestedapproval from congressional appropriations committees for areprogramming of funds to subaccounts from which desegregationassistance could be made available to Board. (Christensentestimony)

448. As represented in the President's fiscal year 1985 Budget,the Executive Branch has requested Congress to appropriate nofunds in fiscal year 1985 to the Special Programs and Populationssubaccounts currently subject to Opinion II. (Board Ex. 56 at 77)

449. Secretary does not intend to distribute fiscal year 1984moneys from his Discretionary Fund to any local educationalagency for direct operating costs of a desegregation plan. (Stip.312)

450. Secretary does not intend to set aside federal fiscal year1984 Discretionary Fund moneys specifically to fund a portion ofBoard's desegregation program costs. However, Board may submit acompetitive application for a project that Secretary considerseligible under the Discretionary Fund. (United States' Responseto Board's Second Request to Admit, No. 27) Should such anapplication be favorably considered by the Department, it isunlikely that Board would receive an award of more than $75,000to $175,000. (Stip. 311)

451. Secretary intends in fiscal year 1984 to distribute allmoneys appropriated to the Discretionary Fund only for thestatutorily mandated programs specified at 20 U.S.C. § 3851(b) orto support projects or activities that Secretary determines willfurther a national educational priority or need. (Board Ex. 57;Justification of Appropriations Estimates for Fiscal Year 1984 at50; United States' Answer to Board's Fifth Set ofInterrogatories, No. 2; 49 Fed.Reg. 7546, February 29, 1984)Secretary will not provide from his Discretionary Fund a directgrant of financial assistance to a local educational agency,including Board, for the costs of implementing a desegregationplan. (United States' Answer to Board's Fifth Set ofInterrogatories, No. 5; Christensen testimony)

452. On February 29, 1984 Secretary promulgated proposedregulations establishing eligibility criteria for localeducational agency grants from the Discretionary Fund. (49Fed.Reg. 7546, February 29, 1984) As described in those proposedregulations, Secretary's policy is not to provide discretionaryfunds to meet "local needs." Secretary defines a program thatmeets a "local need" for purposes of awarding Discretionary Fundmoneys 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 moneyspursuant to 20 U.S.C. § 3851(a)(4) only to provide technicalassistance to a local educational agency. Applying thatregulatory policy, Secretary would find that the programs andprogram elements making up Board's educational components do notqualify for Discretionary Funds in fiscal year 1984 and in futurefiscal years. (United States' Answer to Board's Fifth Set ofInterrogatories, No. 5; Board Ex. 87)

453. Included in the President's fiscal year 1985 Budget is arequested appropriation of $43,224,000 for Secretary'sDiscretionary' Fund for fiscal year 1985. (Board Ex. 56,Justifications of Appropriations Estimates for Fiscal Year 1985at 77, 94; Board Ex. 57) Secretary intends to use $31,599,000 ofthat amount for the nonstatutorily mandated purposes or programsspecified 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 beenprovided by the United States to Board for the Plan. Nor has theUnited States sought, nor does it currently intend to seek,legislation to provide such funds to Board. (Stip. 316)

455. Secretary does not currently intend to take any steps toprovide to Board, for the purpose of financing its desegregationactivities, any fiscal year 1984 or later year funds thatotherwise will lapse in such years. (Stip. 317)

456. In addition the United States has not provided any of the"carryover funds" identified in Finding 432 to Board forimplementation of the Plan. Nor has theUnited States taken, nor does it currently intend to take, stepsto provide such funds to Board. (Motion of the United States toModify the June 30 Order, and supporting memorandum, filedFebruary 2, 1984; Stips. 318, 319)

457. Absent Opinion II, Secretary would have allowed thegrantees to expend the 1982 "carryover funds" in 1983 withoutsetting aside a corresponding amount of 1983 funds. (Id.)

458. In fiscal year 1984 the United States has not soughtauthorizing legislation or a specific appropriation to financeall or any part of Board's cost of implementing its desegregationplan. (Plan of the United States filed November 10, 1983: Reportof the United States filed July 14, 1983)

459. In the President's fiscal year 1985 Budget, the ExecutiveBranch did not propose authorizing legislation or a specificappropriation to finance all or any part of Board's cost ofimplementing its desegregation plan. To the contrary, in thatbudget the Executive Branch is seeking specific legislation tomake all funds appropriated to the Department of Educationunavailable for Board. (Board Ex. 57 at 1-124 § 309). Thatproposed legislation is intended to make all funds, other thanthose specifically appropriated for that purpose, unavailable toBoard for use in implementing its Desegregation Plan. Inclusionof that proposal within the 1985 Budget is consistent with thepolicy of the Executive Branch of the United States to denyfunding to Board for desegregation implementation. (Christensentestimony)

460. Secretary can include, in the President's budget requeststo Congress, budgetary line items that request Congress toprovide funds for particular purposes, activities or programsthat Secretary has not previously undertaken. Such a request forfunds is known as a "nonauthorized line item" or a "nonauthorizedprogram." It is Secretary's practice to transmit authorizinglegislation for such a line item simultaneously with theappropriation request. If Congress appropriates funds for andauthorizes the use of such a line item, Secretary is authorizedto spend funds for that purpose. (Christenen testimony; UnitedStates General Accounting Office, Principles of FederalAppropriations Law at 2-11, 2-12, 2-26, 2-27 (1983)

461. There is currently a line item (but without any authorizedamount) in the President's fiscal year 1985 Budget entitled"Chicago Desegregation Activities." As reflected in thePresident's fiscal year 1985 Budget, Secretary does not intend torequest that Congress provide any funds to this line item infiscal year 1985. (Board Ex. 57, Appendix to the Budget forfiscal year 1985 at I-I13; Board Ex. 64, 1985 President's Budgetat 2; Christensen testimony)

462. In the President's budget requests to Congress, Secretarycan include budgetary line items within grant programs or othertypes of accounts. Secretary may create such line items toindicate the basis for the appropriation amount requested and themanner in which he intends to allocate funds appropriated to thegrant program or account. (Christensen testimony; Board Ex. 56 at95-96; Board Ex. 58 at 48; Board Ex. 61 at 2, 3; Board Ex. 62 at2; United States General Accounting Office, Principles of FederalAppropriations Law at 2-11, 2-12, 2-26, 2-27, (1983)

463. In the President's fiscal 1985 budget, Secretary has notincluded any such line item in his Title IV, Secretary'sDiscretionary Fund or Departmental Management subaccounts thatwould allow him to reserve appropriated funds for Board'sdesegregation activities. (Christensen testimony; Board Exs. 56,57)

464. Federal fiscal year 1984 funds generally will not beexpended until the summer of 1984 and, with some exceptions, areprimarily for use in school year 1984-85. (Stip. 344)

465. In fiscal year 1984 there are minimal sources and amountsof funds available to the United States to provide desegregationassistance for Board. 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, theUnited States through Secretary has failed, and most recently hasrefused, to request from Congress in fiscal years 1982 through1985 sufficient funds to apply toward Board's desegregationneeds. It has not sought to establish funding sources thatspecifically recognize its Consent Decree obligations and are inaddition to those previously created by Congress fordesegregation assistance. It did not request sufficient fiscal1984 appropriations, and has not requested sufficient fiscal year1985 appropriations, to enable it to meet its Consent Decreeobligations, while simultaneously it has provided a significantamount of these funds to otherwise eligible applicants. On behalfof the United States, Secretary has deliberately reducedavailable funds and created competition between Board and otherapplicants for the funds from these pre-existing sources.

467. Such limited availability of fiscal year 1984 funds forprovision to Board pursuant to the Consent Decree is a directresult of the failures and refusals of the Executive Branch toseek funds for financing the Plan and, even worse, itsaffirmative efforts to render existing funds unavailable toBoard. Those actions, particularly since the Court of Appeals'affirmance of Opinion II's determination that the United Stateswas 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, fromthe first draft of the Yates Bill through the passage of theWeicker Amendment, the Executive Branch intentionally sought tosecure passage of legislation that would have earmarked the fundsrestrained by Opinion II (a restraint upheld by the Court ofAppeals, 717 F.2d at 385) to render them unavailable to Board.

502. On August 13, 1983 the President vetoed H.J.Res. 338, abill sponsored by Representative Yates, the only substantiveprovision of which was a $20 million appropriation to enableSecretary to comply with the Consent Decree. (Stip. 320)

503. Both the message of the President accompanying that veto(Board Ex. 78) and the subsequent statement of Secretary ofEducation Terrel Bell (Board Ex. 79) express the official policyof the Executive Branch, including the Department of Education,to take actions designed specifically to render funds fordesegregation assistance unavailable for Board. (Chambers Dep.57-58, 69; Christensen testimony)

504. On or about September 21, 1983, during the mark-up in theHouse Appropriations Committee of H.J. Res. 367 (a continuingresolution designed to provide temporary funding in federalfiscal year 1984 for several federal departments), RepresentativeYates added Section 111 to the proposed legislation. During thesame mark-up Representative Conte added Section 112 to theproposed legislation, a provision intended to "earmark" fundsthat had been previously restrained by order of this Court and toprovide such funds could be received only by grantees other thanBoard. Representative Conte's amendment was adopted by theAppropriations Committee. (Stip. 321)

505. Representative Conte's "earmarking" proposal was supportedby the Executive Branch. It was intended to render the fundspreviously restrained by this Court unavailable to Board.Representative Conte's amendment was not adopted by the fullHouse. (Christensen testimony; Chambers Dep. testimony; BoardExs. 78-87 and 89.)

506. On or about September 22, 1983 the House leadershipannounced that H.J.Res. 367 was overburdened with amendments andwould be redrafted. That redraft was H.J.Res. 368 (anothercontinuing resolution), which contained RepresentativeYates' Section 111 but did not contain Representative Conte'sSection 112. (Stip. 322)

507. During Congressional consideration of H.J.Res. 368,Executive Branch officials prepared an alternative to Section 111in an attempt to secure legislation that would release therestrained funds to grantees other than Board only under certainconditions. Their proposed substitute language (Board Ex. 80) wasgiven by Executive Branch officials to staff members of the Houseand Senate Appropriations Committees for inclusion in H.J.Res.368 as a substitute for Rep. Yates' Section 111. That proposedlanguage would have established a contingency fund to satisfy anyfinal court order against the United States resulting from thislitigation and would have made all other fiscal year 1983 fundsunavailable for this purpose. (Stip. 323; Chambers Dep. 49-50,60-61) It was prepared by the Department on its own initiativeand was given to the respective appropriations committees (afterRep. Conte's earmarking proposal was defeated) as theDepartment's "preferred" substitute for Representative Yates'Section 111. (Chambers Dep. 61-62)

508. On September 29, 1983 Secretary Bell testified before theSubcommittee on Education, Arts and the Humanities of the SenateLabor and Human Resources Committee. His testimony included astatement that the Office of Management and Budget had the daybefore cleared the substitute language referred to in Finding507, thus indicating official Executive Branch approval of thesubstitute. (Stip. 324; Chambers Dep. 65-66, 69, 79-81, 131)

509. Before the Congress Executive Branch officials supportedthe Executive Branch alternative to the Yates Bill (Stip. 330)and officially opposed the enactment of the Yates Bill. (ChambersDep. 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 million to enable Secretary to comply with the ConsentDecree). (P.L. 98-107) Unlike H.J.Res. 338, sponsored byRepresentative Yates, which had been a free-standing bill dealingonly with funding Board's Plan to the extent of $20 million (sothat the President could and did veto the measure withoutaffecting other legislation), H.J.Res. 368 covered a host oftemporary funding items of an emergency nature, so that a vetowould have impacted the operations of many other federaldepartments. Consequently the President's signing of H.J.Res. 368did not at all indicate the Executive Branch had altered itsopposition to providing any funds to Board to honor the UnitedStates' obligations under the Consent Decree.

511. On the contrary, as the following Findings reflect, afterthe Yates Bill thus became law the Executive Branch continued itsefforts to secure passage of a statute specifically designed torender unavailable to Board any funds other than thoseappropriated for it by the Yates Bill. Those efforts clearlyrepresented a violation of the United States' duties underSection 15.1 as declared by the Court of Appeals.

512. H.R.3913, the Labor, Health and Human Services andEducation Appropriations Bill for fiscal year 1984, wasconsidered in the Senate October 4, 1983. During Senateconsideration Senator Weicker proposed first his original andthen his modified amendment (Sec. 308) to H.R.3913. On October 4,1983, but sometime before the introduction of Senator Weicker'sproposals, a staff member of the Senate Appropriations Committeerequested technical assistance from the Department of Educationin preparing legislative language to ensure that funds, otherthan those appropriated in Section 111 of P.L. 98-107, would notbe available to fund the Consent Decree. In response to thatrequest the Department of Education prepared and transmitted twoalternatives to the staff member (Board Ex. 82), the second ofwhich alternatives was proposed by Senator Weicker as amendmentnumber 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 was later withdrawn and the language of the first alternative(which became Section 309 of P.L. 98-139) was adopted by theSenate later the same day. As enacted, the Weicker Amendmentreads:

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 1983funds in the "Special Programs" account. Cong.Rec. H7973. OnOctober 5, 1983 Representative Conte described that amendment asbeing the one he had proposed in conjunction with H.J.Res. 367but stated that he was not going to propose it "[B]ecause theSenate added an amendment dealing with this subject during theirfloor consideration of [H.R.3913] . . ." (H8017). (Stip. 327)

514. As already found, the Department of Education (throughSteven Winnick, Esq. of its Office of General Counsel, and itsDirector of Budget Services) prepared and conveyed the languageoriginally proposed by Senator Weicker. (Chambers Dep. 66-69;Christensen testimony) It specifically designed that language torender all restrained fiscal year 1983 and 1984 funds unavailableto Board to finance its desegregation activities. (Chambers Dep.69; Christensen testimony)

515. On or about October 13, 1983, in response to requests fortechnical assistance from staff members of the HouseAppropriations Committee who were preparing for the conferencecommittee on H.R.3913, the Department of Education preparedsubstitute bill language for Senator Weicker's Amendment number2277, possible report language for inclusion in the ConferenceCommittee Report and a paper entitled "Talking Points," and ittransmitted 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 werespecifically drafted and intended by the Department to renderfunds unavailable for implementing Board's Desegregation Plan.(Chambers Dep. 72-73, 76-79, 85-87) During the current hearingsbefore this Court, representatives of the Department of Educationsought to portray themselves as wholly passive respondents torequests from Congress for technical assistance, implicating nosubstantive or policy judgments by the Department. That may wellbe the usual function of the Department in connection withpossible legislation, but in light of the foregoing Findings itis totally disingenuous in the present instance. This Court doesnot credit such testimony and finds it additional confirmation ofthe findings made elsewhere as to the bad faith of the UnitedStates.

517. In the October 20, 1983 Congressional Record there is anextension of remarks by Representative Conte concerning themodified Weicker Amendment (H8470). That statement was adapted byRepresentative Conte's staff from the materials supplied by theDepartment of Education referred to in Findings 514-16 and thatconstitute Board Exs. 83-85. (Stip. 329)

518. In taking the actions described in Findings 502 through517, the Executive Branch and the Department of Education did notgive heed to the United States' Consent Decree obligations, nordid they inform congressional 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 Departmentof Education actively supported and sought passage of legislationspecifically designed to render funds unavailable to Board. It isa policy and priority of the Executive Branch and the Departmentof Education to make all funds appropriated to the Departmentunavailable to Board for implementing its Plan and to opposespecific congressional appropriations of funds to be used tocomply with the Consent Decree. Moreover, it has been andcontinues 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 andthe Court of Appeals decided the appeal from Opinion II onSeptember 9, 1983, it has been a policy of the Executive Branchof the United States, including the Department of Education, todisable itself from complying (a) with Opinion II and subsequentorders and (b) with the Court of Appeals' opinion, and to denyfunding to Board for desegregation implementation. Those actionsconstitute more than a failure to "make every good faith effort"to meet the United States' Consent Decree obligation. Rather theUnited States has actively and willfully ignored the orders ofthis Court and the Court of Appeals and has continued its badfaith efforts to evade and undermine its obligations underSection 15.1, by engaging in conduct intended specifically torender existing and future sources of funds unavailable fordesegregation assistance to Board. These findings are compelledby the earlier Findings and by the later Findings in thissection.

602. As early as the filing of its July 15, 1983 Report, theUnited States clearly indicated that despite its previouslyadjudicated liability it had no intention of altering its priorcourse of bad faith conduct. That Report was supposed to discussthe specific steps to be included in the United States' programof compliance with Opinion II. Instead the United States simplyreiterated its prior position it would not treat any funds overwhich Secretary had control as "available," nor would it seeklegislative or other action to render other funds available toBoard. That Report alone reflected continuing bad faith on thepart of the United States, as well as a willful violation of theConsent Decree and Orders of this Court.

603. Following the Court of Appeals' September 9, 1983 vacationof this Court's previously-ordered remedies, explicitly stated bythe Court of Appeals as intended to give the United States anopportunity to "fashion its own proposed remedy," the UnitedStates submitted the "Plan of the United States for Supportingthe Desegregation Plan of Board of Education of the City ofChicago." That Plan, filed November 10, 1983, sets forth all theactions the United States intends to take in school year 1983-84and for the duration of the Consent Decree to comply with itsobligations under Section 15.1. (Stip. 331-32) Althoughpurporting to satisfy the Seventh Circuit's mandate, the Planasserted the United States had no further obligations for fiscalyear 1983, or for future fiscal years, beyond the $20 millionthat had been appropriated by Congress as part of a continuingjoint resolution covering a number of needed fundingappropriations (after the President had vetoed an earlierfree-standing provision sponsored by Representative Yates thatwould have budgeted funds only for Board and its Plan). Indeedthe United States' "Plan" contained no suggestions for remedyingthe United States' past violations or for meeting its present andfuture obligations under the Consent Decree, but instead itpresented both old and new excuses for the failure to take suchactions. It reiterated arguments that had previously beenrejected by this Court and the Court of Appeals. Rather than theUnited States availing itself of the opportunity presented by theCourt of Appeals or acting in good faith pursuant to the ConsentDecree, its "Plan" and its actions taken (and not taken) pursuantto its provisions constitute bad faith conduct of the UnitedStates. Both the Plan and such action and inactionalso constitute willful violations of the Consent Decree andorders of this Court and the Court of Appeals.

604. Although the United States received the original versionof Board Ex. 28 on or about September 16, 1983, that extensivedocument was not reviewed by any officials of the Department ofEducation, other than counsel, until approximately March 1, 1984— when these hearings forced such a review. (Stip. 301; Fagantestimony; Christensen testimony; Chambers Dep.)

605. All the conduct of the United States detailed under thecaption "Actions by the United States Affecting the Availabilityof Funds" (Findings 439-67), including its promulgation ofregulations and proposals of legislation intended to render fundsunavailable to Board for use in implementing the Plan, togetherwith its prior failure and present intention not to (a) provideBoard with any of the presently or previously restrained funds,(b) seek reappropriation of any excess or "lapsing" funds, (c)seek to identify and provide any other available funds or (d)seek to render sufficient funds available through appropriationrequests and other legislative activities, constitutes both badfaith conduct and willful violations of the Consent Decree andorders of this Court and the Court of Appeals.

606. All the conduct of the United States detailed under thecaption "Actions with Respect to the Yates and Weicker Bills"(Findings 501-518), specifically designed to render presentlyavailable funds unavailable, also constitutes both bad faith andwillful violations of the Consent Decree and orders of this Courtand the Court of Appeals.

607. All the conduct of the United States referred to inFindings 401-606 was intentionally undertaken by, at thedirection of, or with the knowledge of, Secretary of EducationTerrel R. Bell, other policy level officials in the Department ofEducation (including Sally Christiansen, Gary Bauer, HunterHarrison and Steven Winnick) and other Departments of theExecutive Branch. Each of those officials was aware of theConsent Decree and orders of this Court and the Court of Appealswhen engaging in that conduct.

608. In sum, despite prior findings and opinions of this Courtand of the Seventh Circuit, the United States has shown nointention of complying with Section 15.1 of the Consent Decree.It has refused to make any serious effort to address itsobligations and has persisted in its efforts to ensure that fundsadequate for financing the Plan are unavailable to Board.

609. All the actions of the United States since Opinion II (andparticularly since the Court of Appeals' September 9 opinion)wholly fail to meet its obligation to "make every good faitheffort" and constitute affirmative bad faith conduct and willfulviolations of the Consent Decree and orders of this Court and theCourt of Appeals.

610. Careful review of the entire record demonstrates thatBoard has proved the factual matters reflected in Findings 401 to609 not only by the required preponderance of the evidence, butalso by clear and convincing evidence.

CONCLUSIONS OF LAW ("Conclusions")

Law of the Case

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).

2. Where there are alternative factual or legal grounds for aDistrict Court decision, and the Court of Appeals considers onlyone, the other grounds are not deemed "decided" (accepted orrejected by implication) for purposes of the second branch of lawof the case. Those alternative grounds do remain the law of thecase in the District Court under the first branch of thedoctrine. See, e.g., Munoz v. County of Imperial, 667 F.2d 811,817 (9th Cir. 1982); Johnson v. Board of Education of the City ofChicago, 664 F.2d 1069 (7th Cir. 1981), vacated, 457 U.S. 52, 102S.Ct. 2223, 72 L.Ed.2d 668 (1982); 1B Moore's ¶ 0.404[4.-3].

3. Because the following propositions were finally andexplicitly decided by our Court of Appeals, under the mandateaspect of the law of the case, they are not subject toreexamination 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).

4. This Court's finding that Board has made every good faitheffort to find and provide every available form of financialresources was not challenged on appeal (id. at 380 n. 1) and alsomust be considered conclusively decided. Raxton Corp. v. AnaniaAssociates, Inc., 668 F.2d 622, 624 (1st Cir. 1982). Even werethat not so, these Findings and Conclusions have reconfirmedBoard'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. Opinion III contains no explicit or implicit determinationor rejection of the propriety of this Court's detailed exposition(in Opinion II App.A Par. 1, 567 F. Supp. at 286-88) of the UnitedStates' obligations under Section 15.1, including, wherenecessary, legislative initiatives. Also none of the particularremedial obligations of the United States defined by this Court(id. Par. 2, 567 F. Supp. at 288) were rejected or considered byOpinion III other than as premature. Rather our Court of Appealsvacated the remedial portions of this Court's Order on thealternative and independent grounds that the United States shouldbe given an opportunity voluntarily "to fashion its proposedremedy for past noncompliance, as well as a chance to show thatit intends to comply in the future. . . ." Through the UnitedStates has now been given ample opportunity, it has failed —really refused — to propose even a remotely acceptable "remedy"(Finding 603). To the extent the United States is now in aposition identical to its earlier position, except for havingbeen given an appropriate opportunity to comply voluntarily withits obligation and having failed and refused to do so, thisCourt's earlier conclusions as to the scope of the obligationscontained in Section 15.1 and the nature of the United States'remedial obligations remain valid. To that extent, thoseconclusions are the law of the case.

7. In particular this Court has reviewed each of its Opinion IIFindings of Fact and Conclusions of Law. That portion ofConclusion 4 that found Section 15.1 unambiguous was a "harmlesserror" (717 F.2d at 382), and this Court's Findings andConclusions as to the amount adequate for implementation of thePlan and the remedial obligations of the United States werevacated as premature. With those exceptions, each of the OpinionII Findings and Conclusions remains the law of the case.Moreover, now that the remedial issues are no longer premature,the Conclusions concerning remedies are also law of the case.

8. Many of the Opinion II Findings and Conclusions arefirst-branch (prudential) law of the case. Thus this Court is notbarred from re-examining such earlier determinations,particularly those with regard to the scope of the obligationscontained in Section 15.1 and the nature of the United States'remedial obligations. Considering the importance of the issuespresented in this case, the presentation of further extensiveevidence and certain legislative developments discussed below,this Court has re-examined each of its Opinion II Findings andConclusions, as well as its contemporaneous Order. Uponexamination of the additional evidence and legislativedevelopments, this Court concludes there are no compellingcircumstances requiring such reconsideration. Nonetheless, in theinterest of generating a self-contained document, new Findingsand Conclusions concerning many of the same issues have beenpresented in this opinion. That does not mean any failure torestate all the prior Findings and Conclusions should be taken asa disavowal. To the contrary, each prior Finding and Conclusion,except to the extent inconsistent with these Findings andConclusions, remains the opinion of this Court.

9. Two primary issues were not previously decided and were thefocus 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 todetermine and allocate the total cost of desegregation plans inmore typical desegregation cases has already been covered by theparties and this Court in this case. In particular, the followingcritical conclusions have previously been established:

(a) Board's obligation is explicitly defined by the Consent Decree: to develop 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.

11. In any determination and allocation of the appropriatelevel of funding for a desegregation plan, the costs of programsthat "materially aid the success of the overall desegregationeffort" are properly included. Arthur v. Nyquist, 712 F.2d 809,813 (2d Cir. 1983), cert. denied sub nom. Griffin v. Board ofEducation, ___ U.S. ___, 104 S.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 that excludes themere discharge of a school board's "general educationalresponsibilities," a line that "inevitably blurs," Arthur, 712F.2d at 813. In striking a balance, a district court should give"considerable deference to the good faith representations of theschool authorities." Id.; Liddell III, 731 F.2d at 1316. Suchdiscretion normally afforded a local board is particularlyappropriate in the circumstances presented in this 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).

12. It is of course proper for the United States to seek toassure that Board does not abuse its discretion by including inthe Plan any educational programs that are not properly linked todesegregation (as Arthur, 712 F.2d at 813 put it, they are "ameans of upgrading an educational system in ways only remotelyrelated to desegregation"). In the circumstances of this case,Arthur and Liddell teach the proper standard for determiningwhether the cost of any given program is appropriately includedin the amount "adequate for implementation of the Plan" iswhether the program is a reasonable exercise of Board'sdiscretion to adopt programs that materially aid theimplementation of the Plan developed pursuant to the ConsentDecree and approved by the United States and this Court. Absolutedollar precision is not required when determining the costs of adesegregation plan, particularly when (as here) the local boardhas been acting in good faith. Arthur, 712 F.2d at 814-15.

13. By its agreement in Section 15.1 to attempt to providefinancial resources "adequate for implementation of thedesegregation plan," the United States clearly agreed to help payfor the Plan that was required by, and has since been developedand implemented pursuant to, the Consent Decree. That agreementincludes helping to pay for a plan (like the current one) thatincludes educational components in magnet schools (Section 4.12),in desegregated schools (Section 10.1 and 10.4) and particularlyin racially isolated schools (Section 2), including the followingitems 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 theparties under Section 15.1 were to apply fully to the EducationalComponents described in various sections of the Consent Decree.As for the last clause, that specifically allows affordability tobe considered in meeting the Student Assignment objective of theConsent Decree (Section 2.1). Indeed, its use of the singularform "objective" in referring to Section 2.1 reinforces thenormal reading that the same clause does not apply to the otherobjectives stated in Section 2, including particularly Section2.2 relating to the Educational Components. If any furtherconfirmation were required, Section 7 of the Consent Decreecontains a specific reference to "the objective [again used inthe singular] stated in Sec. 2.2" — demonstrating once again theConsent Decree's draftsmen were meticulous in their distinctionsand cross-references. Thus the Consent Decree's clear andunambiguous language requires no resort to extrinsic evidence onthis 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 Section2.2. Affordability is a legitimate consideration ofpracticability only with respect to Section 2.1, which requiresthat the Plan seek to establish the greatest "practicable" numberof stably desegregated schools. But that is really not critical.Even were it otherwise, to the extent affordability mayrealistically limit the type of plan that can be developed andimplemented, it does not qualify the obligation of the UnitedStates any more than it qualifies Board's obligation. Both areobligated by Section 15.1 to attempt to share the costs ofprograms that it is determined will materially aid inimplementing the Plan.

16. In response to the Arthur-Liddell analysis, the UnitedStates offers 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 andadheres to the Arthur-Liddell standards.

Standards for Determining the Share the United States Is Obligated To Attempt To Provide of the Amount "Adequate for Implementation of the Plan"

17. Section 15.1 by its terms is addressed equally to bothparties and creates a mutual obligation to attempt to find andprovide the total amount of financing adequate for the Plan. Itsays "each party" is to address the search and provision of funds"adequate for implementation of the desegregation plan," a phrasethat applies to the total amount of financing necessary — notsome severable proportion of that total amount.

18. Circumstances surrounding entry of the Consent Decreefurther demonstrate a mutual obligation, not a divisible one, wascontemplated. Its history reveals the parties had a common andoverriding goal of assuring that an effective desegregation planwas developed and implemented in Chicago (see Findings 104,108-10 and extrinsic evidence discussed in Opinion II Conclusion4, 567 F. Supp. at 282). That joint purpose was reflected inSection 15.1, where each party agreed to do everything possibleto find the necessary financing. As stated in Finding 108, theDecree "represents the only instance in which a major urbanschool system has agreed, without any litigation or determinationof liability issues, to develop and implement a systemwidedesegregation plan under court supervision". That Decreecontemplated, and the Plan has manifested, the extensive use ofexpensive compensatory educational remedies to alleviate theeffects of past discrimination. In 1980, as now, Board was facedwith massive financial deficits, and the joint funding provisionof the Consent Decree also reflected recognition that Board'sfinances were such that it could not voluntarily agree todevelop, or successfully implement, an effective desegregationplan of this type unless the federal government agreed to sharethe financial burdens.

19. Because they are in fact contracts (with the addedimprimatur of court approval), consent decrees are construedaccording to precepts of contract construction. Opinion III, 717F.2d at 382 and cases cited. Board engages in extensive legalanalysis to urge on this Court the applicability of contractprinciples, based on the law of joint and several obligations orthe law of joint ventures. Those concepts are of course born ofsomewhat different relationships than are involved here, thoughthe United States does not really counter Board's arguments withcogent analysis. But it is not necessary to decide the questionshere as though they involved strict joint and several liabilityor a joint venture in the classic sense. As Finding 110 makesplain, whether Section 15.1 is looked at in its literal terms —which do not specifically limit the amount of the United States'financial commitment — or whether some notion of reasonableexpectations is applied to that commitment, there can be noquestion the United States' undertaking is broad enough toembrace the amount represented by Board's current request (asmodified by this opinion).

20. Some light is also cast by the equitable principles thatguide the fashioning and effectuating of desegregation decrees.Milliken v. Bradley, 433 U.S. 267, 97 S.Ct. 2749, 53 L.Ed.2d 745(1977). In that respect, allocating the costs of a desegregationplan is part of the remedial power of a district court, UnitedStates v. Board of School Commissioners 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"). Courtshave 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 (6th Cir. 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 courts have frequently considered theability of the parties to provide financing for the plans.Milliken II, 540 F.2d at 246; Liddell v. Board of Education ofthe City of St. Louis, 491 F. Supp. 351, 357 (E.D.Mo. 1980), aff'dand 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, thoseequitable approaches tend to fortify the determination reached inConclusion 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 theinclusion of Section 15.1 in the Consent Decree (Findings 103-10)demonstrates the United States' obligation was not limited orqualified by the prior existence or funding levels of ESAA.Instead Section 15.1 established a general obligation on the partof both parties, to be "interpreted and applied as appropriate inwhatever future circumstances might arise" (Finding 110).

23. This is the first occasion on which the parties and thisCourt have addressed the amount "adequate for implementation ofthe Desegregation Plan" (Section 15.1). As already stated, thatdetermination is whether the programs under considerationmaterially aid the success of the Plan. There is no estoppelagainst Board arising from any earlier statements predicated onthe limited funds then currently available to it.

24. Board is not required to exhaust all its availableresources for implementation of the Plan before the United Statesbecomes obligated to find and provide resources for the Plan(Opinion II Conclusion 7, 567 F. Supp. at 283). Although Board hassubstantial general revenues (from local taxes and from generalstate aid, including State Title I aid), and those funds are notprecluded by State law from being used for desegregationexpenses, Board is not obligated to destroy the basic educationalfunction of the school system by diverting funds needed and usedfor such purposes. Nor is Board required, as the United Statessuggests, always to divert any further increment of such generalrevenues from other educational programs to pay Plan costs. Sucha standard — forcing the robbing of Peter to pay Paul — wouldrender the United States' financial obligations meaningless.

25. United States argues if a program is "necessary" for thePlan, then Board has an obligation to shift funds from itsgeneral resources to pay for the program, and if Board does notdo so, then by definition the program has been shown not to be"necessary." In either event, the asserted result is that theUnited States does not have to pay for the item. Like others ofthe United States' contentions, that one is legally bankrupt. Ofcourse, a program may materially aid success of the Plan, or benecessary for the Plan, even though Board has not had fundsavailable to be diverted from its basic educational system to payfor the program.

26. Board is not "master of its own fate" and depends onsubstantial general state and federal revenues to meet all itsobligations. Requiring Board to consider all general state andfederal revenues received by it as "available" for funding thePlan must be rejected, for it would require Board to superimposea financed Plan on a devastated school system. See, Milliken II,540 F.2d at 245-51. Any successful desegregation program,especially one containing educational components, presupposes afunctioning basic educational system. Courts that haveapportioned costs between local and state defendants have takencare to ensure there is no diminution in the quality of educationor in the allocation of existing state revenues — even staterevenues that are for compensatory education. Berry v. SchoolDistrict 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.2d227 (1983).

27. General funds received from either the State of Illinois orthe federal government must be considered part of Board's generalrevenues. Any expenditure of such funds for implementation of thePlan must be considered part of Board's contribution to financingthe Plan. See Liddell 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 ConsentDecree, and continues to receive such assistance today, undervarious federal funding programs unrelated to desegregation.Together those encompass the categorical federal educationalassistance that is available to all school districts in theUnited States, including Board, for essential educationalprograms, not for funding the incremental costs of desegregationplans. Those funds have been and continue to be received by Boardon the basis of criteria that are unrelated to and do not takeinto account either the Consent Decree or the costs ofimplementing the Plan.

29. Increases in general federal funding since September 1980,received by Board for purposes other than desegregation, neithereliminate nor derogate from the United States' obligation underSection 15.1. Neither party contemplated at the time of theDecree that federal ECIA Chapter I funds would be used to fulfillthe Section 15.1 obligations of the United States (Finding 357).Moreover, Board certainly did not agree to develop and implementa costly plan in exchange for the same level of federal fundingit would have received even had it not entered into the ConsentDecree or implemented a desegregation plan. Finally, the Court ofAppeals has already implicitly rejected such a contention(Conclusion 5(a)).

30. Other United States contentions that its obligations underSection 15.1 are somehow satisfied or eliminated by other federalfunding are equally untenable. It is unnecessary (as Board hasdone in its proposed Conclusions of Law) to dwell on the subjectat length, for Findings 350-68, Addendum A to Findings 301-76 andthe application of ordinary common sense demonstrate conclusivelythe poverty of the United States' position.

31. Section 15.1 imposes the same "good faith" standard on bothBoard and the United States. Board has been complying with thatstandard while the United States has not. That total disparity ofperformance reflects the height of irony in light of the factBoard and the United States have such differing abilities to findand provide funds and such differing competing obligations.

32. In Section 15.1 the United States made a firm commitment —it signed a contract — to make "every good faith effort to findand provide every available form of financial resources adequatefor implementation of the Plan." No "intended grantee" has acomparable claim to action on the part of the United States. Nonumber or form of Executive Branch "policy" decisions,"representations" or subsequent "commitments" can undo, overrideor diminish this contractual promise to Board — a promise thathas the extra force of embodiment in a consent decree.

33. In a sense the United States' various agreements as tofunding, dealt with in the foregoing conclusions, are variants onits most fundamental one: Its Section 15.1 promise is meaninglessand unenforceable, because it can define "every available form offinancial resources" as wholly empty by deliberately making allfinancial resources unavailable. No court is required to acceptthat distortion of contract law from any contracting party,whether sovereign or private litigant.

34. Had the United States not so ignored and subverted itsobligation under the Consent Decree, it would have retainedsubstantially greater discretion within the bounds of itscommitment than it now portrays itself as possessing. Section15.1 contemplated both (a) that the United States would havediscretion as to "how" it would meet its obligation and (b) thatit 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 (2d Cir. 1978).

35. Though the United States complains it is not being treatedequally, it is in fact only now beginning to be treated equally.To the extent the United States' present obligations may appearto be different than Board's, it is not because the standardbeing applied to the United States is any different from thatapplicable to Board. Rather it is because (a) the United Stateshas so egregiously violated that standard and (b) the very natureand identity of the parties makes their respective abilities "tofind and provide every available form of financial resources" sovery different.

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

36. Most of the programs for which Board now seeks funding aredesigned to implement the Educational Components portion of thePlan. In circumstances like those present in Chicago (seeFindings 145-61), educational components are a critical part ofa constitutional desegregation plan. Milliken II; Liddell III.Detrimental effects of years of segregation are not cured merelyby busing students to create integrated schools, Milliken II, 433U.S. at 283, 97 S.Ct. at 2758. Instead a desegregation plan mustinclude the additional programs necessary to provide equaleducational 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 sametypes of educational components contemplated by the ConsentDecree, and the same types of implementation programs for whichBoard 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.

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 and253) properly provides the desegregation remedy required by theConsent Decree, "materially aids the success of the overalldesegregation effort," and indeed is necessary for fullimplementation of the Plan. Accordingly the cost of each suchprogram is properly included in the total amount "adequate forimplementation of the desegregation plan" within the meaning ofSection 15.1. As reflected by Finding 265, the total amountadequate for implementation of the Plan for school year 1984-85is thus $171.631 million, and the share of that amount the UnitedStates is obligated to make every good faith effort to find andprovide pursuant 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 verifythe availability of certain funds, appropriated to the Departmentof Education, to be provided to Board for implementation of thePlan. This Court has now had the opportunity (see Opinion II,Conclusion 11, 567 F. Supp. at 284) to examine extensively theavailability of both 1983 and 1984 appropriations (for which therelevant statutes and regulations are nearly identical) and toreconsider the contentions of the United States with respect tothe availability of those funds. This Court hereby verifies theavailability of funds in the following conclusions.16.

39. Funds are "available" to the United States within themeaning of the Consent Decree where Congress has appropriatedthem to the Executive Branch for purposes consistent withfinancing Board's desegregation activities. To the extentCongress has given the Department of Education discretion toprovide particular funds to Board, the Consent Decree requiresthat the Executive Branch consider these funds "available."Furthermore, to the extent consistent with its statutoryauthority, the Executive Branch is required to interpret andconform its existing program regulations to meet its financialobligation to the Board under Section 15.1. Citizens for a BetterGovernment v. Gorsuch, 718 F.2d 1117 (D.C.Cir. 1983); Gautreauxv. Pierce, 690 F.2d 616 (7th Cir. 1982); Ferrell v. Pierce,560 F. Supp. 1344 (N.D.Ill. 1983).

40. As the following Conclusions reflect, fiscal year 1983funds and fiscal year 1984 funds were and currently are availableto the United States, within the meaning of Section 15.1, toassist Board in financing the Plan. This is wholly apart from,and in spite of, the efforts of the United States to render fundsunavailable — a matter dealt with in later Conclusions.

41. In fiscal years 1983 and 1984 Secretary was authorized todistribute direct grants through Title IV of the Civil Rights Actof 1964, 42 U.S.C. § 2000c, 2000c-4; Pub.L. 97-35, Title V, §509, 95 Stat. 443 (1981). As stated in Finding 402, Secretaryadministratively allocated $24 million to the Title IV program ineach of those years.

42. In fiscal years 1983 and 1984 Secretary was authorized togrant all or any part of those Title IV monies directly to localeducational agencies to finance the desegregation activitiesspecified in 42 U.S.C. § 2000c-4. In those years Board wasimplementing a court approved desegregation plan and qualified asa local educational agency eligible to receive direct Title IVrace and national origin desegregation 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,and permitted under his Title IV regulations(34 C.F.R. § 270.72), to provide 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 regulatorycriteria and are activities eligible for direct Title IV race ornational origin desegregation assistance:

(a) Effective Schools Program

(b) Racially Identifiable Schools Program

(c) Trainers Institute

(d) OEEO Systemwide Staff Development Program for Racially Identifiable Schools

(e) OEEO Systemwide 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 followingprograms designed to implement the Plan's Educational Componentsalso meet all applicable statutory and regulatory criteria andare activities eligible for direct Title IV race or nationalorigin 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 otherfactors as he finds relevant" in making Title IV grant awardspermits him to formulate additional selection criteria and,pursuant to such criteria, to establish classifications orpriorities for allocating available Title IV funds amongotherwise eligible applicants, and to reserve or set aside TitleIV funds for particular eligible applicants. Title IV's statutoryprovision that Secretary "consider" other applications for fundsdoes not subsume his authority referred to in the precedingsentence to establish priorities and to reserve or set asidefunds for particular applicants.

47. Secretary has deliberately flouted the United States'contractual obligations (one owed to no other eligible applicantfor Title IV funds) "to find and provide every available form offinancial resources" for implementation of the Plan. To honorthat obligation as he should have, Secretary was and is requiredto interpret, apply and, if necessary, modify his existing TitleIV and Educational Department General Administrative Regulations("EDGAR") to enable him to comply fully with the United States'financial commitment to Board under Section 15.1.

48. Secretary's EDGAR provisions apply to the Title IV programto the extent not expressly prohibited by Title IV's implementingregulations. Those implementing regulations, which permitSecretary to make Title IV grants at any time and on anapplication-by-application basis, do not require that he awardfunds only after a "competition" among all eligible applicantsfor those funds. 34 C.F.R. § 270.74(a).

49. EDGAR provisions requiring a competition among allapplications for a program's available funds, including awardsbased in part upon a rank ordering of all submitted applications,do not apply to grant awards through Title IV, which may be madeby Secretary at any time. 34 C.F.R. §§ 270.02(c) and (e),270.74(a). Secretary's authority to create preferences andpriorities permits him to reserve Title IV funds for oneapplicant 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,which permit him to consider as award criteria (a) theavailability of financial resources to a school district and (b)the nature and gravity of a school district's desegregationproblems, allow him to consider the Consent Decree in allocatingTitle IV funds among otherwise eligible applicants.

51. United States' legal obligation under Section 15.1, and thepolicy determinations the Consent Decree embodies, constitute"relevant factors" within the meaning of 42 U.S.C. § 2000c-4(b),the EDGAR provisions and the Title IV implementing regulations.Thus Secretary is authorized to reserve Title IV funds for Board,or otherwise to provide Title IV funds to Board, in preference toother eligible applicants for these funds.

52. All fiscal year 1984 funds allocated to the Title IVprogram are currently unobligated. No potential applicant, otherthan Board, has any legal entitlement to those Title IV funds. Tothe extent (if any) such potential applicants could have asserteddue process rights to "compete" under Secretary's regulations foravailable Title IV funds, Secretary could have obviated any suchproblem in fiscal years 1983 and 1984 by publishing a notice inthe Federal Register of Secretary's prospective intention toreserve certain Title IV 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 Title IV funds have no dueprocess right to "compete" for these funds in light ofSecretary's announcement to all applicants in the FederalRegister that any availability of those funds for a 1984 grantcompetition is contingent upon the outcome of the presentlitigation. 48 Fed.Reg. 56254, 86255 (Dec. 20, 1983).

53. In fiscal year 1983 Secretary was not legally obligated toprovide continuation awards to particular grantees, other thanBoard, from the Title IV program. It was within Secretary'sauthority to decline to finance continuation projects on theground that, as a result of his financial commitment to Board,there were no program funds "available" for continuation awardsor that it was in the United States' "best interest" to providethose funds to Board rather than to continuation projects.34 C.F.R. § 75.253(a). Secretary is not legally required to providecontinuation awards of Title IV funds in fiscal year 1984.

54. Congress did not in fiscal year 1984 direct that Title IVfunds could not be made available to provide grants to localeducational agencies. Certain committee report language describesSecretary's administrative practice of providing Title IV grantsto state educational agencies and desegregation assistancecenters. That language does not expressly prohibit Secretary fromproviding Title IV grants directly to local educational agenciesunder the program authorized at 42 U.S.C. § 2000c-4. It isinsufficient to repeal Secretary's statutory authority to providesuch grants to local educational agencies or to operate ascongressional ratification of Secretary's prior fundingpractices. TVA v. Hill, 437 U.S. 153, 189-93, 98 S.Ct. 2279,2299-2301, 57 L.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 alsoConclusion 63.

55. In sum as to Title IV funds, there were in fiscal year 1983and are in fiscal year 1984 no statutory, regulatory or otherlegal constraints that would preclude Secretary from providingall or part of the $24 million allocated to the Title IVsubaccount to Board for implementing the programs identified aseligible for direct Title IV assistance in Conclusions 44 and 45.All remaining fiscal year 1983 Title IV funds and all fiscal year1984 Title IV funds have been and currently are "available" tothe 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 amountannually to fund the statutorily mandated programs specified in20 U.S.C. § 3851(b). Secretary was authorized in each year tospend the remaining $18,040,000 reserved for the Secretary'sDiscretionary Fund for any of the purposes or programs specifiedin 20 U.S.C. § 3851(a), including research and demonstrationprojects related to the purposes of ECIA. Those purposes includeassisting local educational agencies in implementingdesegregation plans, in meeting the needs of children in schoolsundergoing desegregation and in addressing educational problemscaused by racial 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'seducational components are related to the purposes of ECIA,20 U.S.C. § 3832(3) and (7). Many of those programs could have beenfound by Secretary to qualify for discretionary funds under theplain meaning of 20 U.S.C. § 3851(a)(2) as demonstratingdesegregation techniques or educational remedies of national orgeneral significance.

58. Secretary is also authorized through the Discretionary Fundto provide grants to local educational agencies to assist them inimplementing programs under ECIA Chapter 2, including programs toassist local educational agencies in implementing desegregationplans, in meeting the needs of children in schools undergoingdesegregation and in addressing educational problems caused byracial isolation. 20 U.S.C. § 3851(a)(4); 20 U.S.C. § 3832(3) and(7). By its plain and unambiguous language,20 U.S.C. § 3851(a)(4) authorizes Secretary to provide direct grants ofdiscretionary funds to local educational agencies to supplementactivities or programs also eligible for financial assistancethrough the ECIA Chapter 2 state block grants, including20 U.S.C. § 3832(3) and (7). Nothing submitted by the United Stateshas shown a clearly expressed legislative intent contrary to theplain statutory language. American Tobacco Co. v. Patterson,456 U.S. 63, 75, 102 S.Ct. 1534, 1540, 71 L.Ed.2d 748 (1982);Consumer Product Safety Commission v. GTE Sylvania, Inc.,447 U.S. 102, 108, 100 S.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'seducational components are authorized for funding under ECIAChapter 2, 20 U.S.C. § 3832(3) and (7), and are eligible forfinancing through a direct grant of discretionary funds to Boardunder 20 U.S.C. § 3851(a)(4).

60. Secretary's proposed Discretionary Fund regulations, 49Fed.Reg. 7546 (February 29, 1984), state (a) discretionary fundsmay not be used to meet "local needs" and (b) under20 U.S.C. § 3851(a)(4) Secretary may only provide technical assistance tolocal educational agencies. Those are solely administrativeconstraints and do not implement statutorily imposed limitationson Secretary's use of discretionary funds. Given his statutoryauthority to provide discretionary funds to Board under20 U.S.C. § 3851(a)(2) and (4), Secretary is required to modify hisregulations to enable him to comply fully with the United States'financial commitment to Board under Section 15.1. Gautreaux;Gorsuch; Ferrell.

61. Secretary is authorized by statute to allocatediscretionary funds among potential applicants for those funds.It is within Secretary's regulatory authority to establishprogram priorities for the uses of those funds, to establishabsolute preferences that reserve all or part of the funds for aparticular priority, and to establish competitive preferences forapplications 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 absolutepreferences for a broad range of purposes, including recognitionof the United States' financial commitment to Board under theConsent Decree. Secretary is authorized to establish a priorityand a competitive or absolute preference in Board's favor, andthus specifically reserve all or part of non-statutorily mandatedDiscretionary Fund monies for the Plan. See, e.g., 48 Fed.Reg.50919 (November 4, 1983).

62. Secretary's EDGAR provisions relating to the selection ofprojects for funding after a rank ordering of all submittedapplications are usually used by Secretary to make grants fromthe Discretionary fund. However, Secretary makes the finalselection of applications for funding, and he is permitted by hisregulations to change the rank order in which applications wouldotherwise be selected for funding based upon any information inthe application, any other information he deems relevant to theprogram criteria, and any priorities he has established that setaside 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 permitshim to reserve discretionarymonies for one applicant and to award them to that applicantwithout regard to the EDGAR competitive selection criteria.34 C.F.R. § 75.105(c)(3).

63. In its fiscal year 1983 and 1984 appropriation actsCongress did not earmark or allocate particular sums for thenonmandated programs within Secretary's Discretionary Fund.Secretary is not legally bound by program allocations orbudgetary estimates not incorporated into the language of anappropriation act itself. Matter of LTV Aerospace Corp., 55Comp.Gen. 308, 319 (1975); Matter of Financial Assistance toIntervenors, 59 Comp.Gen. 228, 231 (1980); see also, BlackhawkHeating & Plumbing Co. v. United States, 622 F.2d 539, 547 n. 6,224 Ct.Cl. 111 (1980); United States General Accounting Office,Principles of Federal Appropriations Law 5-94 to 5-103 (1982).Notwithstanding language in congressional committee reportsrecommending or directing certain uses for Secretary'sDiscretionary Funds, Secretary did in fiscal year 1983, and doesin fiscal year 1984, have the authority to make suchdiscretionary funds available to Board to finance itsdesegregation activities.

64. All fiscal year 1984 funds reserved for the programs orpurposes specified in 20 U.S.C. § 3851(a) are currentlyobligated. No potential applicant, other than Board, has anylegal entitlement to those Discretionary Fund monies. To theextent (if any) such potential applicants could have asserted dueprocess rights to "compete" under Secretary's establishedpriorities for the use of his discretionary funds, Secretarycould have obviated any such problem in fiscal years 1983 and1984 by publishing a notice in the Federal Register of hisprospective intention to establish a priority or preferencereserving certain discretionary funds for Board pursuant to theUnited States' Consent Decree obligation.20 U.S.C. § 1232(b)(2)(A) and (B); 5 U.S.C. § 553(d)(1) and (3). In anyevent, potential applicants for fiscal year 1984 discretionaryfund monies have no due process right to "compete" for thosefunds in light of Secretary's announcements in the FederalRegister that any availability of those funds for 1984 grantcompetitions is contingent upon the outcome of the presentlitigation. 49 Fed.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 legallyobligated to provide monies from his discretionary fund forcontinuation awards to particular applicants other than Board. Itwas within Secretary's authority to decline to financecontinuation 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 UnitedStates' "best interest" to provide those funds to Board ratherthan to continuation projects. 34 C.F.R. § 75.253(a).

66. In sum as to Discretionary Funds, there were in fiscal year1983 and are in fiscal year 1984 no statutory, regulatory, orother legal constraints that would prevent Secretary fromproviding all or part of the nonstatutorily directed $18,040,000appropriated to the Discretionary Fund to Board for financing theprograms included in Board's educational components. All fiscalyear 1984 funds have been and currently are "available" to theUnited States within the meaning of Section 15.1.

67. Secretary is authorized by the Joint Funding SimplificationAct to modify his regulations where they impede financing aparticular project for which assistance is available from morethan one grant program. 31 U.S.C. § 7103(b)(3)-(4), 7103(c).Board has demonstrated it is eligible to receive desegregationassistance monies through the Title IV program and Secretary'sDiscretionary Fund. To the extent Secretary's regulations require"competition" for available Title IV or Discretionary Fundmonies, if at all, Secretary is authorized to suspend thoseregulations to permit his providing assistance for Board'sdesegregation activities. Secretary's regulations promulgatedpursuant to the Joint Funding Simplification Act also permit himto place in abeyance any applicable competitiveselection criteria where the project for which jointfinancing is sought is of the minimum quality to qualify forfunds. (34 C.F.R. § 75.219(b)); 34 C.F.R. § 75.221(c)(3) and (5).Conclusions 44, 45 and 59 establish that Board's programs meetthat minimum standard. Consistent with those joint fundingregulations and notwithstanding any Title IV or DiscretionaryFund regulations for selecting among applications for funds,Secretary is authorized to provide funds from both sourcesdirectly to Board to meet the United States' financial commitmentunder Section 15.1.

68. In fiscal years 1983 and 1984 Congress appropriated a lumpsum amount to finance Title IV and five other programs within theSpecial Programs and Populations account, and did not designateor earmark particular sums for each program. H.J.Res. 631, TitleIII; P-L 98-139, Title III, 98 Stat. 888. In both fiscal yearsSecretary administratively allocated $24 million to the Title IVprogram, leaving $28,058,000 in fiscal year 1983 funds and$23,447,000 in fiscal year 1984 funds available within the otherSpecial Programs subaccounts. Id.

69. Where several programs are financed through a lump sumpappropriation, an executive agency is authorized to "reprogram"or allocate the appropriations among the various programs as itdeems appropriate, notwithstanding program allocations orbudgetary estimates that appear in congressional reportsaccompanying the appropriations act. LTV Aerospace Corp., 55Comp.Gen. at 319; Matter of Newport News Shipbuilding and DryDock Co., 55 Comp.Gen. 812, 819-20 (1976); Blackhawk Heating &Plumbing Co., 622 F.2d at 547 n. 6; United States GeneralAccounting Office, Principles of Federal Appropriations Law 5-94to 5-103 (1982).

70. Secretary was authorized in fiscal year 1983 and isauthorized in fiscal year 1984 to reprogram available funds fromthe other Special Programs subaccounts into the Title IVsubaccount, to the extent the total amount distributed throughthe Title IV subaccount did not or does not exceed $37,100,000.P.L. 97-35, Title V § 509, 95 Stat. 443. Those reprogrammedSpecial Programs funds could thus be made available to Board tofinance any of the Title IV authorized programs or programelements described in Conclusions 44 and 45.

71. Secretary is also authorized in fiscal year 1984 toreprogram the fiscal year 1983 Special Programs carryover fundsinto the Title IV subaccount. Those carryover funds are currentlyunobligated. They may be used by Secretary for any purposes forwhich they were originally appropriated, and may be reprogrammed.20 U.S.C. § 1225. Those carryover funds were originallyappropriated in fiscal year 1883 and are not subject to the$37,100,000 limitation on Title IV expenditures in fiscal year1984.

72. Funds capable of being reprogrammed are available to meetthe United States' Consent Decree obligations notwithstandingcongressional disapproval of a reprogramming request. BlackhawkHeating; see Immigration and Naturalization Service v. Chadha,462 U.S. 919, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983).

73. All fiscal year 1984 funds allocated to those other SpecialPrograms subaccounts are currently unobligated. No potentialapplicant, other than Board, has any independent legalentitlement to those other Special Programs funds. To the extent(if any) such potential applicants could have asserted dueprocess rights to "compete" under Secretary's regulations foravailable Special Programs funds, Secretary could have obviatedany such problem in fiscal years 1983 and 1984 by publishing anotice in the Federal Register of Secretary's prospectiveintention to reprogram certain special Programs funds for Boardpursuant to 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). Inany event, potential applicants for fiscal year 1984 SpecialPrograms funds have no due process right to "compete" for thosefunds in light of Secretary's announcements in the FederalRegister that any availability of those funds for 1984 grantcompetitions 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 legallyobligated to provide continuation awards to particular grantees,other than Board, from the Special Programs subaccounts. It waswithin Secretary's authority to decline to finance allcontinuation 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 UnitedStates' "best interest" to provide those funds to Board ratherthan to continuation projects. 34 C.F.R. § 75.253(a).

75. In sum as to Special Programs funds and carryover funds,there were in fiscal year 1983 and are in fiscal year 1984 nostatutory, regulatory, or other legal constraints preventingSecretary from reprogramming such funds into the Title IVsubaccount. Those funds have been and currently are "available"to the United States within the meaning of Section 15.1.

76. To the extent fiscal year 1984 funds exist in the followingaccounts and subaccounts, have not been committed for otherpurposes and are not reasonably necessary for other Department ofEducation functions17., they too are "available" to Secretarywithin the meaning of Section 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 availablein all non-desegregation Department of Education accounts,$21,188,206 was unobligated and, absent this Court's September27, 1983 order, would have lapsed into the Treasury. Through acongressional reappropriation those funds could be made availableto Board in fiscal year 1984 to meet the United States' ConsentDecree obligation. 31 U.S.C. § 1301.

78. There are no statutory, regulatory or other legalconstraints preventing the Executive Branch from including, inthe President's budget requests to Congress, budgetary line itemsrequesting that Congress provide funds for particular purposes,activities or programs that Secretary has not previouslyundertaken. If Congress appropriated funds for such a line item,Secretary would be authorized to spend funds for that purpose.31 U.S.C. § 1301; United States General Accounting 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 budgetproposals, such a line item requesting that Congress appropriatefunds for Board's desegregation activities.

79. There are no statutory, regulatory or other legalconstraints preventing the Executive Branch from including in thePresident's budget request to Congress budgetary line itemswithin grant programs or other types of accounts. Secretary isauthorized to create such line items to indicate the basis forthe appropriation amount requested and the manner in which heintends to allocate funds appropriated to the grant program oraccount. If Congress appropriated funds for such a line item,Secretary would be authorized to reserve program funds solely forthe purpose of that line item. 31 U.S.C. § 1301; United StatesGeneral Accounting Office, Principles of Federal AppropriationsLaw at 2-11, 2-12, 2-26, 2-27 (1983). Secretary could include inhis fiscal year 1985 budget proposal, and could have included inprior budget proposals, such a line item in the Title IV,Discretionary Fund or perhaps other subaccounts that wouldfurther allow Secretary to reserve funds for provision to Board.

Meaning and Effect of the Yates Bill

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.

81. All statutory interpretation begins with the plainlanguage of the statute. American Tobacco Co. v. Patterson,456 U.S. 63, 102 S.Ct. 1534, 71 L.Ed.2d 748 (1982); Consumer ProductSafety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100S.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 aCongressional determination to appropriate $20 million to beprovided to Board pursuant to the Consent Decree, prompting theExecutive Branch to take the first step toward fulfilling itsobligations under Section 15.1. It reflects no congressionaldetermination 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 availabilityof other funds.

83. Legislative history of the Yates Bill supports that plainlanguage interpretation and further refutes any notion Congressintended to render all other funds unavailable to Board. It waspassed in its ultimate form only after alternatives that wouldhave had such an effect had been rejected. Evidence of rejectedamendments is an appropriate aid to a court considering questionsof legislative intent. Johnson v. Department of Treasury,700 F.2d 971, 974 (5th Cir. 1983).

84. In connection with the first draft of the Yates Bill,Congressman Conte submitted an "earmarking" proposal that wasintended to render the funds previously restrained by this Courtunavailable to Board. Under the Conte Amendment each of thecategories of restrained funds was to "be available only to carryout the programs and projects" authorized under the respectivelegislation creating the programs. H.J.Res. 367, § 112, ReportNo. 98-374, Part I (September 22, 1983). Although that amendmentpassed the Appropriations Committee, it was rejected by the fullHouse. Executive Branch officials later prepared an alternativeto Section 111 (the Yates Bill) of H.J.Res. 368 that would havereleased the restrained funds to grantees other than Board andwould have provided funds to Board only under certain conditions.That alternative, which was submitted to staff members of theHouse and Senate Appropriations Committees, was also ultimatelyrejected.

85. In light of his opposition to the Yates Bill and hisattempt to alter its effect, any remarks by Representative Conteare entitled to very 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, 47 L.Ed.2d 668 (1976). It is well establishedthat statements of opponents to a measure are poor evidence oflegislative intent. United States v. International Union ofOperating Engineers, 638 F.2d 1161, 1168 (9th Cir. 1979), cert.denied, 444 U.S. 1077, 100 S.Ct. 1026, 62 L.Ed.2d 760 (1980).

86. Subsequent as well as contemporaneous congressional actionalso supports the plain meaning interpretation of the Yates Bill.In its original version the Weicker Amendment, if constitutional,would have expressly achieved the precise result the UnitedStates now contends the Yates Bill had already achieved. It mustbe presumed Congress was aware of its own prior laws, UnitedStates v. Robinson, 359 F. Supp. 52, 58 (D.C.Fla. 1973), andCongress would not attempt to enact redundant and unnecessarylegislation. See, Jackson v. Kelly, 557 F.2d 735, 740 (10th Cir.1977). Because the original version of the Weicker Amendment wasintroduced October 4, 1983, a day before this Court found theUnited States' motion based on the Yates Bill to be premature,and because the Weicker Amendment was passed before this Courtultimately considered the Government's interpretation, it canhardly be said the Weicker Amendment was a congressional"response" to this Court's interpretation of the Yates Bill. Thusthe congressional intent underlying the Yates Bill is furtherconfirmed by this subsequent legislative activity.

87. In addition to being contrary to the plain language andlegislative history of the Yates Bill, the United States'proffered construction of that statute would also implicitlyreverse the prior determinations of this Court and our Court ofAppeals. Given the settled principle that a statute should beconstrued to avoid questions regarding its constitutionality,Crowell v. Benson, 285 U.S. 22, 62, 52 S.Ct. 285, 296, 76 L.Ed.598 (1932), and because the United States' interpretation wouldforce the confrontation and resolution of substantialconstitutional questions, additional reasons for rejecting theUnited States' suggested reading of the Yates Bill are present.

88. There is no indication Congress intended the Yates Bill tolimit the United States' obligation to Board to thearbitrarily-arrived-at sum of $20 million (there having been nocongressional consideration ofany of the matters dealt with at such length and painstakingly inthese Findings and Conclusions). This Court responded to theenactment of the Yates Bill by freeing up previously frozen fundspro tanto. By so doing it retained other funds as still"available" and thus lessened the degree of confrontation thatwould have been posed by a decision holding the United Statesliable for making all funds unavailable. Plain legislativelanguage cannot be overridden by the Executive Branch'sinterpretation of the Yates Bill and its assertion of generalprinciples of construction reflected in certain ComptrollerGeneral Opinions (which can only be aids to reasoning, not asubstitute for it).

Meaning and Effect of the Weicker Amendment

89. Section 309 of P.L. 98-139, 97 Stat. 895 (1983) (the"Weicker Amendment") 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 examinethe language of the legislation and ordinarily must regard thatlanguage as conclusive. On its face the language of the WeickerAmendment is not confusing or ambiguous. It is a simpledeclaration that no fiscal 1983 or 1984 funds appropriated to theDepartment of Education are to be restrained from distribution tograntees because of this Court's June 30 Order — in streetlanguage, it seeks to unfreeze previously frozen funds.19. It doesnot at all address the availability of funds to be providedpursuant to Section 15.1. It does not purport to limit "grantees"to some subset of persons or organizations eligible to receiveDepartment funding. Importantly (and obviously because ofconcerns as to constitutionality) it does provide the ConsentDecree is to remain in "full force and effect."

91. When a party argues a statute has a meaning that transcendsits explicit language, that party bears the burden of showingclear legislative intent that such a contrary meaning wasintended. Ford Motor Credit 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 contends the Weicker Amendment has somemeaning beyond the plain language of the statute, it bears thatburden. And because the doctrine disfavoring repeals byimplication has been held to apply "with full vigor" when asubsequent law is an appropriations measure, Committee forNuclear Responsibility, Inc. v. Seaborg, 463 F.2d 783, 785 (D.C.1971), the United States also faces that additional burden whenarguing the Weicker Amendment was intended substantively to alterthe statutory availability of funds to Board.

92. As the following Conclusions confirm, the legislativehistory of the Weicker Amendment does not conflict with the plainlanguage interpretation reflected in Conclusion 90. Instead thelegislative history reinforces that plain language, with itsnegation of any effort to alter the substantive rights as betweenthe United States and Board.

93. On October 4, 1983 (after the Yates Bill had become law onOctober 1) Senator Weicker offered the following provision as anAmendment to the Fiscal Year ("FY") 1984 Labor, Health and HumanServices 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 Board of Education of the City of Chicago.

Cong.Rec., S.13506.

94. That language, which would (if valid) have had an importantimpact on the rights that are at the core of this opinion, wasnever enacted into law. Instead Senator Weicker withdrew thatlanguage, and on October 4 the Senate passed the WeickerAmendment as quoted in Conclusion 89. Its sponsor, SenatorWeicker, explicitly stated his proposal "would not release theGovernment from any further liability" and "if additional fundsare 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 WeickerAmendment and its legislative history (Senator Weicker's ownstatement and the matters reflected in the following Conclusions)reflect (a) congressional ratification of the United States'Consent Decree obligation and (b) congressional recognition ofthis Court's power to determine the nature and scope of thatobligation.

95. On October 4 Representative Conte presented an amendment toH.R.3959 that contained the extremely specific language requiredfor earmarking. Cong.Rec., H.7973. Representative Conte'sproposed amendment, like the original version of the WeickerAmendment, clearly purported to render the restrained fundsunavailable to Board. Then on October 8, after the Senate hadrejected the original version of the Weicker Amendment (thusrejecting the equivalent of Congressman Conte's proposal) and hadadopted the Weicker Amendment in its ultimate form,Representative Conte decided not to propose his earmarkingamendment to the House.

96. On October 13 the FY 1983 Labor, Health and Human Servicesand Education Appropriations bill was considered in jointconference committee. Substitute bill language for the WeickerAmendment and possible report language for inclusion in theConference Committee Report were circulated by RepresentativeConte to members of the Committee. In conjunction with thosedocuments, a report called "Talking Points" was also transmittedto Committee members.

97. Those "Talking Points" urged that substitute language beinserted in the Weicker Amendment "because Section 308 literallyonly directs that the funds no longer be enjoined; it does notaddress whether the funds must be awarded to the recipientsselected by the Department of Education or to Chicago." Indeedthe same document said, "It is possible that the Court —consistent with the terms of Section 308 as currently written —could lift its injunction but then order all or part of the fundsto be awarded to Chicago." To respond to those perceived"shortcomings" Representative Conte's proposed substitute statuteread:

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 proposedlanguage for 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 WeickerAmendment passed the House in exactlythe same form that had been approved by the Senate.

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 a legislator is opposed to a measure, his remarks areentitled to very little weight. See, Ernst & Ernst, 425 U.S. at203-04 n. 24, 96 S.Ct. 1386 n. 24; International Union ofOperating Engineers, 638 F.2d at 1168. In view of RepresentativeConte's unsuccessful attempts to alter or oppose the Yates andWeicker Bills so as to render funds unavailable to Board, hisremarks are especially poor evidence of legislative intent. Bycontrast, the fact of those unsuccessful attempts is persuasiveconfirmatory evidence of legislative intent contrary to theabortive efforts.

99. In particular, no significance should be attached toRepresentative Conte's October 20 statement of his"understanding" of the Weicker Amendment. See, Cong.Rec., H.8740.That statement apparently was inserted into the CongressionalRecord by Representative Conte after the House had agreed toadopt the Senate's version of the Weicker Amendment. In view ofthat effort at revisionist history, coupled with the totalfailure of Representative Conte to obtain the modifications inCommittee that would have implemented Representative Conte's"understanding," it would be especially inappropriate now toimpute Representative Conte's "understanding" to other members ofCongress.

100. Evidence of the evolution of an enactment, of "the effectof amendments — whether accepted or rejected," is an importanttool for 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'smodification of the original October 4 version of the WeickerAmendment (which, if constitutional, would have rendered therestrained funds unavailable to Board), as well as the failure ofthe similar efforts, particularly by Representative Conte, tomodify the Weicker Amendment as passed by the Senate, stronglyconfirm the statute as passed was not intended to render therestrained funds wholly unavailable to Board.

101. Nothing daunted, the United States essays its own attemptat revisionist history. It urges this Court to construe theWeicker Amendment as if it had passed with its original proposedlanguage — or with language Representative Conte tried but failedto have enacted on several occasions. Because Congress did notaccede to the United States proposals to render the restrainedfunds unavailable to Board, however, this Court will notcircumvent the congressional rejection of these provisions, orpermit the United States to do so, by interpreting the WeickerAmendment as if those proposals had succeeded rather than failed.

102. In summary, the plain language of the Weicker Amendmentthus simply requires the Court to return control of therestrained funds to Secretary — to restore the pre-freeze statusquo — but does not dictate how any distribution of the fundsshould occur thereafter. And the foregoing examination of thelegislative history of the Weicker Amendment further supportsthis plain meaning interpretation of the statute. Essentially theWeicker Amendment reflects a legislative compromise in whichCongress specifically rejected any attempt to determine thesubstantive entitlement of Board or any other potential granteeto the restrained funds, leaving the Consent Decree in "fullforce and effect" and recognizing the determination was one thisCourt would be making. In effect the statute thus represented acongressional "separation of powers" determination that theExecutive Branch should regain control of the funds, after whichthe rights to ultimate distribution of the funds would simply bein 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 coveredby this Court's restraining order, thisCourt has concluded the restraining order can be terminated. Thatrenders moot any possible conflict between the Weicker Amendment(read properly in accordance with the foregoing Conclusions) andthe Constitution. It also responds to the salutary principle thatconstitutional questions should not be decided in advance of thenecessity to decide them. Rescue Army v. Municipal Court,331 U.S. 549, 67 S.Ct. 1409, 91 L.Ed. 1666 (1947). But because of thesharply different interpretation of the Weicker Amendment urgedby the United States (and the far more serious, substantial andcomplex questions of constitutionality that interpretation wouldraise), it remains important, for the reasons made plain in thefollowing Conclusions, to identify and discuss the relevantconstitutional questions and their significance for this opinion.

104. In general Congress has the authority to define by statutethe substantive law courts are required to apply. Accordinglywhen there has been a change in the applicable statutory lawafter judgment in the lower court but before an appellate orother final decision, the court must dispose of the caseaccording to law existing at the time of its decision. UnitedStates v. Schooner Peggy, 5 U.S. (1 Cranch) 103, 110, 2 L.Ed. 49(1801). That rule however is subject to the exception that courtswill refuse to apply the law in effect at the time a decision isrendered when to do so would result in "manifest injustice."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 theconsiderations relevant to the potential for manifest injusticeare "the nature and identity of the parties, . . . the nature oftheir rights and . . . the nature of the impact of the change inlaw upon those rights." Id. at 717, 94 S.Ct. at 2019.

105. Article III of the Constitution vests "the judicial powerof the United States" in federal courts. While Congress is vestedwith broad legislative powers under Article I, it can neither"exceed the limit of its own authority" nor "assume a power whichcould only be properly exercised by [courts] because it [is] inits nature clearly judicial." Kilbourn v. Thompson, 103 U.S. 168,192, 26 L.Ed. 377 (1880). Thus "the Constitution has investedCongress with no judicial powers; it cannot be doubted that alegislative direction to a court to find a judgment in a certainway would be little less than a judgment rendered directly byCongress." Nock v. United States, 2 Ct.Cl. 451, 457-58, (1867),quoted in United States v. Sioux Nation of Indians, 448 U.S. 371,398, 100 S.Ct. 2716, 2732, 65 L.Ed.2d 844 (1980). When Congressregulates functions of the judiciary in a pending case, it walksa line between judicial and legislative authority and exceedsthat line if it sets aside a judgment or orders retrial of apreviously adjudicated issue. Id. at 427-30, 100 S.Ct. at 2746-48(Rehnquist, J., dissenting). Consequently, legislation that"prescribed a rule of decision in a case pending before thecourts, and did so in a manner that required the courts to decidethe controversy in the Government's favor" would beunconstitutional. Id. at 404, 100 S.Ct. at 2735.

106. Separation of powers limits the exercise of judicial powerby Congress and reflects the Framers' concern for maintaining theindependence of the coordinate departments as a bulwark againsttyranny. United States v. Brown, 381 U.S. 437, 442-43, 85 S.Ct.1707, 1711-12, 14 L.Ed.2d 484 (1964); The Federalist Nos. 47 and48 (J. Madison).

107. If Congress does not purport to alter the governingprocedural and substantive law, Congress cannot force itsinterpretation of that law upon the federal courts in particularcases. L. Tribe, American Constitutional Law § 3-5, at 39 (1978).In terms of the separation of powers analysis recently applied bythe Supreme Court, such conduct would be an act by one branch ofgovernment that "prevents [another branch] from accomplishing itsconstitutionally assigned functions." Nixon v. Administrator ofGeneral Services, 433 U.S. 425, 443, 97 S.Ct. 2777, 2790, 53L.Ed.2d 867 (1977).

108. No congressional change in the law can retroactivelyeffect a judicial determination brought to final judgment beforethat change. Daylo v. Administrator of Veterans' Affairs,501 F.2d 811, 816 (D.C.Cir. 1974). To permit otherwise would destroythe finality and independence of the judicial action. Even whena judgment is not final, "the separation of powers bar a federalcourt from giving operational weight to a pronouncement byCongress . . . that what had theretofore been judicially declaredas 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 theintegrity of judical action and prevents the manifest injusticethat retroactive application can cause. Id. at 877-79; See also,Coe v. Secretary of Health, Education and Welfare, 502 F.2d 1337,1340 (4th Cir. 1974).

109. In cases involving property rights against the UnitedStates, the doctrine of separation of powers (as well asprinciples of equity) forbids application of a substantive lawpassed by Congress, pending appeal, that would effectivelyrequire a federal court to reverse a judgment entered against theUnited States. United States v. Klein, 80 U.S. (13 Wall.) 128, 20L.Ed. 519 (1872); see, also Sioux Nation of Indians.

110. Under the Fifth Amendment property may not be takenwithout the payment of just compensation. Rights that have becomevested by judgment constitute property protected from legislativeinterference. McCullough v. Virginia, 172 U.S. 102, 123-24, 19S.Ct. 134, 142, 43 L.Ed. 382 (1898); Daylo, 501 F.2d at 816.Moreover, contract rights against the United States constituteproperty protected by the Due Process Clause. Lynch v. UnitedStates, 292 U.S. 571, 579, 54 S.Ct. 840, 843, 78 L.Ed. 1434(1934). Courts have carefully distinguished situations wherecongressional action impacts only on unvested statutory rightsfrom those where vested contract rights are effected. See,deRodulfa v. United States, 461 F.2d 1240, 1257 (D.C. Cir.),cert. denied, 409 U.S. 949, 93 S.Ct. 270, 34 L.Ed.2d 220 (1972);Memorial Hospital v. Heckler, 706 F.2d 1130, 1136-37 (11th Cir.1983).

111. Any vested cause of action, whether emanating fromcontract or common law principles, constitutes property beyondthe power of the legislature to take away. deRodulfa, 441 F.2d at1257. Similarly an attachment, mortgage or other lien entitlinga creditor to resort to specific property for the satisfaction ofa claim is a property right protected 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 interpretationsof the Weicker Amendment, that statute purports to require thisCourt to dissolve its injunction, thus "reversing" a particularjudicial order in a particular case. If required to decide thisquestion, this Court might well be forced to conclude that aspectof the Weicker Amendment violates fundamental principles ofseparation of powers. Sioux Nation of Indians; Nixon v.Administrator of General Services. This Court's determination asreflected in Conclusion 103 avoids that problem.

113. However, the United States' strained interpretation of theWeicker Amendment presents serious due process issues that do notafflict Board's (and this Court's) reading. One aspect of thosedue process problems specifically regards the effect of theWeicker Amendment as interpreted by the United States on fiscal1983 funds. When those funds were appropriated they becamepotentially "available" to Board within the meaning of Section15.1. At the moment the funds so became available, the ExecutiveBranch had an obligation "to make every good faith effort to seekto 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 fixedin legal terms. Even were it assumed Congress might later alterstatutory rights as to the availability of those funds, Congresscould not, consistent with due process, abrogate Board's ConsentDecree rights that had already vested both by contract and byjudgment. See, Daylo; Cerro Metal Products; see also, BlackhawkHeating.

114. Put in a slightly different way, at the time the WeickerAmendment was enacted it was no longer within Congress' power toaffect the United States' duties under the Consent Decree as tothe restrained fiscal year 1983 funds. Pursuant to this Court'sSeptember 27, 1983 order, the United States had recorded thosefunds as obligated, with Board as an alternative contingentobligee of the Executive Branch. 31 U.S.C. § 1501(a)(6).Availability of funds for a particular purpose is determined atthe time of obligation. Once obligated, they were exempt from anylater statutory alterations of availability.

115. From still another perspective, the United States' falsereading of the Weicker Amendment also appears to run afoul of dueprocess because it would destroy Board's right to satisfy itsclaim from the funds restrained by this Court. In that sense, thefrozen funds are similar to an attachment or lien allowing one toresort to specific property for satisfaction of a claim. Suchinterests are property rights protected by the Fifth Amendment.Armstrong.

116. In addition to the substantial due process questionsraised by the United States' interpretation, its view of theWeicker Amendment also poses additional separation of powersconcerns not presented by this Court's reading. Under the UnitedStates' version, this Court would impermissibly have to giveeffect to a pronouncement by Congress that "what had theretoforebeen judicially declared as law shall be deemed never to have hadeffect." Cerro Metal Products. That would place Congress in theposition of having crossed the delicate line between legislativeand judicial functions by dictating the result in a particularcase. According to the United States the Weicker Amendmentbecomes a "substantive" determination applicable to only theChicago Board of Education and this lawsuit. While Congress hasbroad power to legislate with regard to classes of cases, itspower is far more limited with regard to individual cases. See,Sioux Nation of Indians, 448 U.S. at 430, 100 S.Ct. at 2748(Rehnquist, J., dissenting). Relatedly, the United States'proposed reading also violates the principle that Congress cannotchange the applicable law in a pending appeal to relieve theUnited States of an unfavorable judgment in a dispute involvingproperty rights. Klein; see also, Sioux Nation of Indians, 448U.S. at 404, 100 S.Ct. at 2735.

117. Finally, a retroactive application of the United States'position on the Weicker Amendment — creating the fiction that thefunds had never been available, so that there had never been aviolation — would also result in "manifest injustice" (seeConclusion 104). It would belatedly disrupt an agreed process forvindicating the constitutional rights of Chicago students andreward the contumacious actions of the Executive Branch. It wouldalso redefine Board's mature rights under the Consent Decree andsaddle Board with a substantially broader responsibility forfinancing the Plan. Under the circumstances, it would be whollyimproper 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 States'interpretation, under which the statute would be a congressionaldetermination that the restrained funds are not now and neverwere available, is incorrect because (a) it conflicts with theplain language of the Amendment, (b) it conflicts with thelegislative history of the Amendment and (c) it would render theAmendment plainly unconstitutional in a number of ways. Bycontrast the Board's interpretation — that the Weicker Amendment,if constitutional, requires this Court to vacate its restrainingorder, but does not dictate who should receive the funds — iscorrect, reflecting the plain language and legislative history ofthe Amendment. While the Amendment might nonetheless poseconstitutional problems, this Court need not reach that questionbecause it is now prepared to lift its restraining order uponissuance of an appropriate order in conformity with this opinion,thereby avoiding any potential conflict with the Amendment.

119. Accordingly neither the Yates Bill nor the WeickerAmendment renders the restrained funds unavailable to be providedto Board. Furthermore, the $20 million provided to Board pursuantto the Yates Bill does not satisfy the United States' obligationsunder Section 15.1 nor fully remedy its past violations. Thatcontention, initially made by the United States in its Motion ToDismiss filed immediately after passage of the Yates Bill, andrepeatedly reasserted up to the present, is wholly untenable. Oneprimary effect of the language and legislative histories of boththe 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 befurther considered and enforced by this Court.

Additional United States Violations of Section 15.1 and Subsequent Court Orders, and Consequent Remedial Obligations

120. All the following actions, taken by the Executive Branchin connection 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 Branchin connection with Congressional consideration of the WeickerAmendment, also constituted violations of Section 15. 1 (seeFindings 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 Courta Report in purported compliance with its reporting obligationsunder Order ¶ 2, 567 F. Supp. at 288. That Report failed topresent a discussion of specific steps to be included in theUnited States' program of compliance with the Order and was hencea willful and bad faith violation of the United States' reportingobligations.

123. In the same way, the alleged Plan of the United States forSupporting the Desegregation Plan of Board of Education of theCity of Chicago, filed with this Court November 10, 1983,contained no adequate suggestions at all for remedying the UnitedStates' past Consent Decree violations or for providing furtherfunding for the Plan. By submitting that so-called "Plan," theUnited States willfully and in bad faith violated this Court'sOctober 28, 1983 order.

124. As part of the same ongoing pattern, the United States'activities with regard to the funds restrained by this Courtconstitute further willful, bad faith violations of Section 15.1and subsequent Court orders. 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 reappropriation 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 UnitedStates continues deliberately to flout Section 15.1, the ConsentDecree and subsequent court orders by engaging in a broad courseof conduct designed to render unavailable funds that could beused, and would go part of the way toward being adequate, forimplementation of the Plan. Those actions, which are acontinuation of the conduct previously found by this Court toviolate Section 15.1, constitute additional willful and bad faithviolations 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 Educationto promulgate new Regulations — apparently in direct response tothis litigation — designed to render funds unavailable forprovision to Board for implementation of the Plan constitute anadditional and deliberate violation of Section 15.1 andsubsequent court orders. Those proposed regulations, 49 Fed.Reg.7546-51 (February 29, 1984), are designed to "interpret"statutory eligibility criteria for grants from Secretary'sDiscretionary Fund in a manner inconsistent with the intent ofCongress. In any case they are an attempt to render alreadyavailable funds unavailable for Board's use.

127. Such persistent violations of the Consent Decree andsubsequent court orders by the United States may give rise toremedial obligations that go beyond the particular obligationsinitially contemplated by Section 15.1. It is a basic equitableprinciple that a court may devise a remedy that exceeds the termsof a prior agreement between the parties if necessary to make theinjured party whole. Walters v. Marathon Oil Co., 642 F.2d 1098,1100 (7th Cir. 1981). Thus a court may impose "additionalconsistent burdens" designed "to ensure implementation of thedecree" when a party to a consent decree has failed to complywith his obligation. Brewster v. Dukakis, 675 F.2d 1, 4 (1st Cir.1982).

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'sFranchise Litigation, 689 F.2d 1150, 1159 (3d Cir. 1980); NLRB v.J.P. Stevens & Company, Inc., 563 F.2d 8 (2d Cir. 1977), cert.denied, 434 U.S. 1064, 98 S.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 to direct such action,however, is not dependent on a finding of contempt or bad 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).

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 notflout its obligations or take actions that have the effect ofdestroying or injuring the right ofthe other party to receive the benefits of the agreement.Williston on Contracts §§ 670, 1959 (3d ed. 1978). Though it isalways important to ensure accountability, that importance isheightened in the present case, where it is the United Statesthat has so persistently attempted to flout 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,like any citizen, has the "right to expect fair dealing from[the] Government." S & E Contractors v. United States,406 U.S. 1, 10, 92 S.Ct. 1411, 1417, 31 L.Ed.2d 658 (1972); see also,United States v. 119.67 Acres of Land, 663 F.2d 1328, 1333 (5thCir. 1981).

130. All the foregoing discussion creates still another doubleaspect of the United States' obligations. First, all theparticular obligations of the United States detailed in theseConclusions are required as a matter of interpretation of theConsent Decree, viewed both alone and in light of the presentcircumstances. Second, even were that not the case the UnitedStates' violations and efforts to undermine its obligations oughtto render performance of the same obligations mandatory as apurely remedial matter.

Present Obligations of the United States

131. This Court's Order ¶ 1(b) decided Section 15.1 of theConsent Decree then required the Executive Branch "to take everyaffirmative step within its legal authority to seek to `find andprovide' desegregation funding to Board, until funding adequatefor full implementation of the Plan has been provided." Order ¶2 then prescribed detailed remedial steps to ensure fulfillmentof this obligation. That remedial portion of the Order wasvacated by the Court of Appeals to give the Executive Branch anopportunity "to fashion its proposed remedy." Except for the $20million provided pursuant to the Yates Bill (over the oppositionof the Executive Branch), the United States has not takenadvantage of the opportunity provided, nor has it given theslightest indication it plans to fulfill its obligations underthe Consent Decree.

132. Consistent with Section 15.1 and the parties' JointStipulation as to their intentions when they entered into thatagreement, it is necessary 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 present circumstances it is clearthat, as a matter of construction of Section 15.1, the UnitedStates is bound to take every affirmative step within its legalauthority to find and provide adequate financing for the Plan,including steps to provide available funds and steps to renderfunds available, as detailed in these Conclusions.

133. In another mischaracterization of the issues, the UnitedStates argues Section 15.1 could not reasonably be construed todictate a substantial funding result. That contention whollymisapprehends the nature of the obligation contained in Section15.1. Section 15.1 essentially directs that a process take place,rather than assuring any particular result of that process. Itdoes not guarantee Board the United States will provide any sumcertain. Instead it requires the United States to undertake theprocess of making every good faith effort to find and providefunds, while the result to be obtained is dependent on andlimited by other circumstances — particularly the amount offunding that is or becomes available as a result of the processand the amount of funding necessary for adequate implementationof the Plan. While those circumstances limit the result to beobtained, they do not limit the nature of the process that theUnited States must undertake to attempt to achieve the result.

134. Under any circumstances, Section 15.1 imposes a seriousand substantial 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.2d 745 (5th Cir. 1980), cert. denied, 450 U.S. 1031, 101 S.Ct. 1741,68 L.Ed.2d 226 (1981). Courts have frequently set demandingstandards for action by government officials who have enteredinto consent decrees containing "best efforts" or similarcommitments. Such standards have included requiring the provisionof available funds and prohibiting or requiring various lobbyingactivities. Courts have not interpreted such commitments topermit government officials to flout or evade their duties.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 ofjustice to accept the United States' argument that such caseshave less force because they involved outrageous conduct by staterather than (as here) federal officials. See, An UndeterminedQuantity, 583 F.2d at 949.

135. There is another locution that equally illustrates thefallacy in the United States' position. Though the ExecutiveBranch certainly does not retain discretion under Section 15.1 asto whether to meet its obligation, so that it may not directlyrenege on its promise or indirectly undermine it, the ExecutiveBranch does retain broad discretion under Section 15.1 as to howto meet its obligation.

136. As to the presently available funds, the Executive Branchhas in the past totally distorted the concept of exercise of itsdiscretion. It has persistently searched for ways not to meet itsobligation to Board rather than for how to meet that obligation.As a consequence it has so reduced the availability of funds thatsufficient funding to meet its obligation is no longer"available."20. That there are now severely limited availablefunds, resulting in apparently severely limited remainingdiscretion, is the direct consequence of the Executive Branch'sdeliberate violations of Section 15.1. Nor can credence be givento the Executive Branch's contention that it continues to retaindiscretion to dispense with those funds otherwise, based on thesuperficially appealing equitable argument that numerousapplicants for those funds will otherwise be disappointed. Thoseapplicants (even though they do not have any legal entitlement tothe funds, unlike Board) may have a call on the court's equitableconscience, but the Executive Branch does not. It is theExecutive Branch that has wrongfully created these circumstances,and it cannot in good conscience invoke the equities as surrogatefor the innocent applicants. Nevertheless, under Section 15.1 theUnited States still generally retains its discretion as to how tomeet its obligation, and it need not provide the now-availablefunds to Board if it renders other adequate funds available.

137. Unless the United States so renders other adequate fundingavailable, Board is entitled under Section 15.1 to the availablefiscal 1984 funds to the extent necessary adequately to implementits desegregation programs. This result is also required becausethe United States' past and continuing violations of the ConsentDecree have eliminated all alternative sources of available fundsand because it is necessary to redress those violations. At aminimum the Executive Branch has historically allocated Title IVand Discretionary Fund moneys disproportionately in favor ofother applicants. In prior years other potential recipients ofthe fiscal year 1984 funds have benefitted from Secretary'sviolations of the Consent Decree, and the funds now remainingavailable are not even sufficient to correct that historicalimbalance. Even apart from that, Secretary has not created anyentitlement in other applicants to those funds in fiscal year1984, and no number or form of Executive Branch "policy"decisions, "representations" or subsequent "commitments" can undoor override the United States' obligations to Board and indeed tothis Court. See, Geisser; Brewster; Ricci.

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 thathad been intended was to give Board access to existing fundingsources, the verb "provide" would have done the job. "Find"imports something more: the search for funds. If the UnitedStates' obligation did not extend to activities such as seekingreappropriation or new legislation when other sources ofavailable funds prove inadequate, the word "find" would berendered meaningless. It is a cardinal principle of constructionthat each provision of an agreement should be given meaning ifpossible. Hanley v. James McHugh Construction Co., 444 F.2d 1006,1009 (7th Cir. 1972). And the linked use of the phrase "everyavailable form of financial resources" stresses a "universalsearch," which necessarily includes legislative initiatives asone aspect of the required effort.

139. Nor is Conclusion 138 speculative, though the language isclear enough. Examination of extrinsic evidence also confirms theExecutive Branch's obligation under Section 15.1 extends tolobbying activities. Language proposed as a precursor to Section15.1 in a June 19, 1980 letter from Assistant Attorney GeneralDrew Days to Board (GX 1-20) shows that the word "available"cannot be read as a term of limitation and that legislativeinitiatives were contemplated.

140. Moreover, the broad circumstances (see Findings 108-09)surrounding entry of the Consent Decree also indicate the UnitedStates' obligation in Section 15.1 extends to lobbyingactivities. Its financial commitment in Section 15.1 was theprincipal quid pro quo for Board's willingness to foregolitigation and develop the Plan. In return for its Section 15.1commitment the United States secured the full result it sought(and might not otherwise have achieved) without the expense anddelay of complex litigation.

141. It would be inequitable to construe the Consent Decree ina way that would mean Board undertook its binding and substantialobligations without any assurance the United States could notcompletely eviscerate its one obligation through lobbyingactivity or inactivity. It is a principle of contractconstruction that an agreement should not be interpreted in amanner that will place one party wholly at the will or mercy ofanother. Padbloc Co. v. United States, 161 Ct.Cl. 369, 376-77(1963). It would distort that principle to hold that while Boardis bound to its substantial obligations the Executive Branch isfree completely to undermine its obligations through lobbyingactivity or inactivity. No such totally empty promise will beimplied by this Court.

142. Viewed either alone or in the present circumstances,Section 15.1 (as a matter of construction) requires the ExecutiveBranch promptly to undertake some combination of the followinglobbying activities to the extent necessary to assure financingadequate for implementation of the Plan:

(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 reappropriation of excess 1983 funds, and, at the appropriate time, excess funds in 1984 and subsequent years;

(c) requesting reappropriation 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 unavailable for provision to Board.

143. As for Conclusion 142(a), the Executive Branch andspecifically the Department of Education are required by statuteto submit reports to Congress conveying similar information. See,20 U.S.C. § 3486; 31 U.S.C. § 1105, 1108. As for the remainingactivities described in Conclusion 142, they represent theExecutive Branch's minimum obligations with respect tolegislative initiatives consistent with the terms of Section15.1, either on its face or as interpreted in light of thepresent circumstances. Of course the Executive Branch retainsdiscretion to choose among those potential legislativeinitiatives, so long as it exercises that discretion in a mannerso as "to make every good faith effort" to "find" adequatefinancing.

Separation of Powers: Judicial Consideration of Legislative Activities

144. Separation of powers doctrine serves "to check the extentof power exercisable by any one branch of Government in order toprotect the people from oppression," Consumer Energy Council ofAmerica 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). That doctrine was adopted "not to promote efficiencybut to preclude the exercise of arbitrary power." Myers v. UnitedStates, 272 U.S. 52, 292-93, 47 S.Ct. 21, 84-85, 71 L.Ed. 160(1926) (Brandeis, J., dissenting). It does not require "threeairtight departments of government." Rather the doctrine isflexible, and the measure of conformance to its principles ispragmatic. Nixon v. Administrator of General Services,433 U.S. 425, 441-43, 97 S.Ct. 2777, 2789-90, 53 L.Ed.2d 867 (1977).

145. To determine whether an act of one branch of governmentdisrupts the proper balance between the coordinate branches, theproper inquiry focuses on the extent to which the act preventsanother branch from accomplishing its constitutionally assignedfunctions. Only if that threshold inquiry reveals the potentialfor disruption will a court then examine whether that impact isjustified by an overriding need to promote objectives within theconstitutional authority of the first branch. Id. at 443, 97S.Ct. at 2790.

146. Enforcement of the Consent Decree by foreclosing certainnarrow legislative activities by the Executive Branch, andrequiring certain others, involves no disruption of lawfulExecutive Branch activities. Nor does it disrupt the balancebetween coordinate branches, because the Executive Branch itselfproperly exercised its own constitutionally assigned power whenit chose to enter into the Consent Decree. Enforcement of theExecutive Branch's own voluntary decision is not an unwarranted"disruption" of the exercise of its powers. See, id.; Citizensfor a Better Environment v. Gorsuch, 718 F.2d 1117, 1127-30(D.C.Cir. 1983); Gautreaux v. Pierce, 690 F.2d 616, 637-38 (7thCir. 1982); Alliance To End Repression v. City of Chicago,733 F.2d 1187 at 1191 (7th Cir. 1984).

147. Enforcement of the full substance of the United States'commitment in Section 15.1 is further justified by the"overriding need" to protect the constitutional rights of Chicagostudents and the integrity of the Judicial Branch itself. Nixonv. Administrator of General Services; see also, Marbury v.Madison, 5 U.S. (1 Cranch) 137, 163, 177, 2 L.Ed. 60 (1803); AnUndetermined Quantity, Etc., 583 F.2d at 949.

148. Nor do the legislative activities of the Executive Branchin the circumstances of this case present "political questions"that may not be considered by this Court. Baker v. Carr,369 U.S. 186, 217, 82 S.Ct. 691, 710, 7 L.Ed.2d 663 (1962), defines thecriteria for evaluating the applicability of the politicalquestion 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 initiallyappear to be committed to another branch by the Constitution havebeen found not so committed and subject to review by the courts.See, Powell v. McCormack, 395 U.S. 486, 89 S.Ct. 1944, 23 L.Ed.2d491 (1969); Roudebush v. Hartke, 405 U.S. 15, 92 S.Ct. 804, 31L.Ed.2d 1 (1972).

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

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 isnot an officious intrusion upon the functions of the legislativebranch, violative of the principle of separation of powers, whenthe President proposes a program of lawmaking . . ." E. Dumbauld,The Constitution of the United States 311 (1964). 151. Article II, Section 3 addresses and clarifies a separationof powers issue not at all implicated in the present case. Itestablishes the Executive's duty and ability to recommend mattersto Congress. It does not however address the accountability ofthe Executive Branch for its failure to meet an independentobligation to do so, nor does it excuse that failure. It assuresonly that fulfillment of an obligation such as that owed to Boarddoes not violate the doctrine of separation of powers.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'sSection 15.1 commitment to Board (and to this Court as well)effectively reflects a determination that if sufficient presentlyavailable funding could not be provided, it would become"necessary and expedient" to undertake legislative initiatives.That determination represented a proper exercise of the ExecutiveBranch's discretion and a voluntary limitation on the futureexercise 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 Number82-2377 (D.C.Cir. December 21, 1982), vacated as moot, DocketNumber 82-2377 (D.C.Cir. February 1, 1983).

153. Such Executive Branch agreements to particularrestrictions on the exercise of its "executive" powers are properand can be enforced. Gautreaux v. Pierce, 690 F.2d at 637-38;Alliance To End Repression, at 141. Self-imposed restraints ofthis type do not impermissibly infringe upon Executive Branchdiscretion. Citizens for a Better Environment v. Gorsuch. Indeedthe United States' ability to restrict itself and enter intobinding commitments is a "competence attaching to sovereignty."Perry v. United States, 294 U.S. 330, 353, 55 S.Ct. 432, 436, 79L.Ed. 912 (1935), rejecting the contention (much akin to that theUnited States seeks to advance here) "that the Government cannotby contract restrict the exercise of a sovereign power."

154. Board's rights against the United States are embodied ina consent decree, a judgment that can be fully enforced by thisCourt. United States v. City of Miami, 664 F.2d 435, 439-40 (5thCir. 1981) (percuriam). Even were Section 15.1 viewed as a simple contract, theUnited States' promise would remain fully enforceable (though inthat event enforcement might be relegated to the Claims Court,28 U.S.C. § 1491(a)(1)). Litigation to enforce government contractsrecognizes both (a) the general potential for contractualliability even when the United States exercises "sovereign"powers and (b) the specific "validity of a duty to obtain funds"when the United States contracts to do so. Municipal LeasingCorp. v. United States, 1 Cl.Ct. 771, 774 n. 2 (1983); S.A. HealyCo. 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); GerhardtF. Meyne Co. 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 arepresent in this case. There are "judicially discoverable andmanageable" standards for evaluating the Executive Branch'slegislative activities. Baker v. Carr. Its specific actions tomeet its commitment to Board will be empirically verifiable, forterms such as "every good faith effort," which describes theExecutive Branch's duty, are frequently used to describe legalobligations and are routinely enforced by courts. See, UnitedStates v. McAndrew, 480 F. Supp. 1189, 1193 (E.D.Va. 1979) (orderrequiring "reasonable efforts" sufficient to support contemptfinding).

156. Enforcement of the Executive Branch's duty to makelegislative initiatives will not involve this Court "in policydecisions". Baker v. Carr. It was the Executive Branch itselfthat decided the then-contemplated litigation with Board shouldbe settled immediately on the terms embodied in the ConsentDecree. This Court's enforcement of that agreement does notinvolve it in evaluation of the policy judgments of the ExecutiveBranch. See, Citizens for a Better Environment v. Gorsuch.

157. Finally in the "political question" analysis, judicialenforcement of the Executive Branch's commitment does not showany "lack of deference" to a coordinate branch of Government.Baker v. Carr. Quite the opposite is true. Throughout theseproceedings, the considerable deference shown the ExecutiveBranch by both this Court and Board has been consistentlyexploited by the United States' obstructionism. Under thecircumstances, it is entirely proper for this Court to enforcethe full substance of the United States' obligation.

Means of Enforcement

158. At this point the rights and duties of the parties havebeen defined. It remains to address the most appropriate means ofenforcement. This opinion is not accompanied by an order forthree reasons:

(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 ofthe enforcement issues.

159. Because the United States failed to provide availablefunds or adequate funding to Board for school year 1983-84, andbecause the United States otherwise failed to comply with itsobligations for that school year under the Consent Decree and asdetermined by this Court and the Court of Appeals, the UnitedStates has not yet effectively begun to meet its fundingobligations.

160. These Findings and Conclusions have often made referenceto the Executive Branch. But the litigant here is the UnitedStates, and the Consent Decree is a bindingobligation of the United States as such, not of the ExecutiveBranch (which is after all not a legal entity). As established inthese Findings and Conclusions, the Executive Branch haspersistently sought to render funds unavailable to Board, and ithas succeeded in so limiting the current availability of fundsthat it has undermined the United States' ability to comply fullywith the obligation contained in Section 15.1. Considering thoseviolations, by which the Executive Branch has deliberatelydisabled itself from complying with Section 15.1, this Court nowdetermines the current obligation of the United States remainsone of providing Board with an amount adequate for implementationof the Plan in school year 1984-85. As Conclusion 158 indicates,considerations of comity and separation of powers dictate thatthis Court defer (briefly, to be sure) its determination as tothe means necessary to ensure that the Executive Branch willattempt to meet that obligation.

161. To be entitled to permanent injunctive relief, a plaintiffnot only must prevail on the merits of its claim but also mustcarry the burden of what "is often referred to as `balancing theequities' or as drawing the `balance of convenience.'" 7 Moore's¶ 65.18[3], at 65-136. As the Supreme Court put it in BeaconTheatres, 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 theDistrict Court considering a permanent injunction could wellapply the same criteria our Court of Appeals has consistentlyannounced as required for preliminary injunctive relief (Godinezv. Lane, 733 F.2d 1250 at 1257 (7th Cir. May 9, 1984)), of coursesubstituting actual victory on the merits for a mere reasonablelikelihood of success.

162. Application of those principles to the present casedemonstrates Board has borne its burden with regard to each ofthose 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 forpermanent injunctive relief.

1. In the law that term is most commonly used in choice-of-lawproblems, reflecting the theory of analysis with which ProfessorDavid Currie is most often associated. See, e.g., In re Air CrashDisaster Near Chicago, 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 Hampshirethe idea this Court should be appealed to because the NewHampshire affiliate of the National Diffusion Network, funded bythe United States Department of Education (the "Department") ranout of funds May 11, 1984. To date, 11 separate letters have comein about the loss of a program that (though this Court is notitself an educator) sounds highly worthwhile. If the UnitedStates will not be candid and acknowledge that this baby, and allthe other orphans created by the United States' intransigence,must be laid at its doorstep and not that of this Court, eitherthis Court 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 theConsent Decree will omit "Part I," and whenever the followingFindings and Conclusions refer to "Section —" without identifyinga document, the reference is to that section of Part I of theConsent Decree.

6. That phrase is one with an honored history in a somewhatdifferent — though this time closely-related — legal context. Itis customarily used to describe the situation of the party that,having violated a court order, is sentenced to confinement untilhe or she complies 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 carries the keys of his prison in his own pocket").Of course the parallel to the present case is too obvious torequire spelling out.

7. To the extent congressional action was required to free upfunds, but might not have been obtained because of competingconsiderations that Congress might have deemed more importantdespite a request from the administration, the United States asa litigant could not be faulted or held liable for a violation ofSection 15.1. However the United States' conduct has poisoned thewell by violating its agreement "to make every good faith effortto find and provide every available form of financial resources,"and it cannot therefore excuse itself by pointing tocongressional attitudes created by its own flouting of itscontractual obligations.

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).

[fn1a] As well as in magnet schools (§ 4.1.2) and desegregated schools(§§ 10.1 and 10.4).

[fn2a] Moreover, Stipulations 101-02 and the extrinsic evidenceoffered by the Government, in the form of its correspondencefile, reflect that in the spring of 1980, the former counselrepresenting a former Board were preoccupied with the potentialamount of an ESAA grant that might be generated if the partiescould agree on the specific parameters of a student assignmentplan. However, after a new Board took office and retained newcounsel, the negotiations took a sharply different direction,leading to agreement on a general funding principle notincorporating any previous specific discussions.

[fn3a] Two other sub-categories are also identified: (a) stable mixedschools having a small but relatively constant enrollment ofwhite children and (b) schools whose enrollment composition iscurrently racially mixed but is projected to become raciallyidentifiable.

[fn4a] All the enrollment data in Findings 130 through 134 excludespre-school and kindergarten children.

[fn5a] To reflect this increase, an appropriate adjustment was made inthe teacher salary and career service salary cost categories setforth in the budget sheets included in Board Ex. 117.

[fn6a] Part of the money budgeted by Board for incrementaldesegregation expenditures is attributable to State Title Ischool aid. State Title I aid constitutes that portion of CommonSchool Fund State Aid (or general state distributive aid)distributed to Illinois school districts based on the number ofeconomically disadvantaged or "Title I eligible" studentsenrolled in each district. Addendum A attached to these Findings(following Finding 376) describes the relationship between StateTitle I school aid and desegregation expenditures. (BacchusTestimony)

[fn7a] In recent fiscal years Board has taken a series of actions toplace its taxes on a more "cash-current" basis and reduce theamount of "levied but unbilled" taxes. Those actions have playeda significant role in reducing or eliminating budget deficitsoriginally projected for those fiscal years.

[fn8a] Regulations promulgated by the Authority regarding thedefinition and determination of a "balanced budget" essentiallyrequire that Board's proposed expenditures be supported on a cashbasis. Thus the "extension rate" amendment — which generatedapproximately $100 million in additional cash receipts for fiscalyear 1983-84 — had a significant impact on eliminating Board'soriginally projected budget deficit for this year.

[fn9a] All references are to documents in Board Ex. 118.

10. In fact the initial funding source for such programs was andis generally not determinable. Prior to the imposition of theState Title I targeting requirement, all Common School Fund StateAid, including State Title I aid, was included withoutdifferentiation in Board's general resource base.

11. Certain 946/947 expenditures are considered to have beenfunded from "reallocated" State Title I resources in the sensethat, as of the 1981-82 school year, such resources would nothave been required, pursuant to revised or modified Boardstaffing formulae, to have been spent at the schools receivingsuch resources even if such schools had received such funding orportions thereof in prior school years.

12. Board's other source of funding for those programs was aportion — approximately $10 million — of other general Boardresources. Those funds and related programs are identified by"Project Code 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 othergeneral Board resources (identified, as described above, by"Project Code 163"). Moreover, in school year 1983-84, Boardincreased its incremental desegregation appropriations by $10million (identified by "Project Code 496") — with approximately$8 million of that amount being used to expand the implementationof the Plan's Educational Components.

14. 512 refers to employee salaries and related expenses and 513refers to expenses for instructional materials. For convenience,these Findings 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. at383 n. 8). These Findings and Conclusions have foreclosed thatpossibility.

16. It was clearly the United States' obligation to do all thespadework for this purpose, consistent with its duty "to find andprovide" under Section 15.1. Here too the United States hasbreached its commitment, so it has been Board that has from theoutset scrutinized the relevant appropriations bills, statutesand regulations to identify available funds for the United Statesand that has now identified further available funds as set forthbelow.

17. This Court recognizes that (a) most of those funds areappropriated by Congress primarily for various operational orsimilar costs necessary for the functioning of the Department ofEducation and (b) just as funds necessary for Board's basicoperations and obligations are not available for the Plan (seeConclusion 26), those funds are not "available" to the extentreasonably necessary for the Department's operations. Thus thisConclusion's determination such funds are "available" isqualified by the condition that the Department may show that some(or perhaps even all) those funds are not available because theyare necessary for Department operations. In any event, theidentification of such funds by Board is a particularly aptillustration of Board's having performed a function the UnitedStates is obligated to perform under Section 15.1 and the priororders of this Court: identifying every available form offinancial resources.

18. Department of Education's Office for Civil Rights contractswith other organizations to provide technical assistance to localeducational agencies to assist them in complying fully with TitleVI requirements. S.Rep. No. 247, 98th Cong. 1st Sess. 163-64(1983). That technical assistance program was created by theOffice for Civil Rights pursuant to its authority to make anypayments necessary to carry out its compliance and enforcementfunctions. 20 U.S.C. § 3413(c)(3); P.L. 98-139, Title III, 97Stat. 895.

19. This discussion does not address any questions of validity ofsuch an enactment — only its meaning.

20. Thus, with respect to available funds, the Executive Branchhas not even afforded its obligation to Board equal status withits desires to use the funds otherwise. It has not even tried tofund Board's needs in the same proportion as it funded otherapplicants.

JUNE 8, 1984 OPINION — TABLE OF CONTENTS

Pages

BACKGROUND 138-140

I. FINDINGS 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 Desegregation Expenditures 301-12 180-186

1983-84 Ancillary Desegregation 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

Board's 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

Separation 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 artificiallimitation on funds otherwise available or potentially availableto satisfy the extensive Desegregation Plan needs of Chicago'sBoard of Education (let alone the varying needs of otherclaimants of funds), the United States has sought to place theBoard (and this Court) into a position as though the Board (andthis Court) were choking off deserving educational programs.2That is simply not true. It is the United States itself that hascreated 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 keepthe promise it made on the day this lawsuit was filed, ConsentDecree § 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 —because the concerns created by considerations such as separationof powers and sovereign immunity tend to prevent its promisesfrom being fully enforced in precisely the same way as promisesof (say) IBM or other private defendants. For that reason thisCourt has previously been compelled to impose a "freeze" order toavoid the risk its ability to order relief will arguably befrustrated. Because the United States has deliberately violatedits original agreement to fund the Chicago Desegregation Plan,this Court has reluctantly found it necessary to prevent thedistribution to other possible grantees of United Stateseducational funds, in order to preserve access to all the dollarsthat would be potentially available to fund the honoring of theUnited States' freely-undertaken (and then freely-broken)obligation to the Board.

But as this Court has said during the course of hearings onthis issue, the United States "has the key to its cell in its ownpocket."6 It could have, in the exercise of its "every good faitheffort," assured that all the needed funds would be potentiallyavailable to the Board by (1) shifting available dollars to theBoard to the fullest extent possible without congressionalapproval or (2) going to Congress with a request to allow theshifting of dollars that were already available to the Departmentof Education, but that required reallocation because they werenot in fact going to be used for the purposes that had been thesubject of the original allocation.7 It could have done boththose things if necessary. Instead the United States has chosento pit deserving applicants for funds one against the other, andto put the issue before Congress as though the Board and thisCourt — rather than the United States as the breaker of its ownvoluntary promise — were the malefactors.

One other related point should be emphasized at the outset.Section 15.1 is part of a consent decree. Like every consentdecree, it has a twofold aspect.8 It is of course a contract —and as a contract, it is enforceable to require the contractingparties to perform their voluntarily undertaken duties. Becauseunlike most contracts the parties have chosen to submit it forthe stamp of court approval, it is also 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 thislong opinion, a private litigant that did what the United Stateshas done would unquestionably be held in contempt — with thepotential for being subjected to a fine or imprisonment as wellas to an order for civil compliance. But for the United States acontempt fine is meaningless — after all it is the publicinterest (and not the injured opposing party) that is vindicatedby a fine, with the money going to the United States itself assurrogate for the public. Thus imposition of a fine against theUnited States would just transfer money from one federal pocketto 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 solemnlyundertaken responsibilities becomes all the more important, andits deliberate flouting of those responsibilities becomes all themore unpardonable.

Now the legal rights of the litigants have to be evaluated.This opinion has not been drafted in response to the UnitedStates' conduct just referred to, but that conduct may have madethe issues more clouded than would otherwise have been the case.

This Court now has before it the evidence developed inextensive hearings on remand from the Court of Appeals' decision("Opinion III," see n. 4) confirming the United States' violationof Section 15.1. Although the Court of Appeals did that, it alsovacated the part of this Court's June 30, 1983 order (the"Order," issued contemporaneously with "Opinion II," see n. 3)that had directed the United States to undertake an affirmativeprogram to preserve the availability of funds potentiallyavailable to fulfill its obligations under the Decree. As theCourt of Appeals put it (717 F.2d at 384), this Court had "actedwith excessive dispatch" in doing so. This Court of course hadshared the respect for separation of powers that underlay theCourt of Appeals' opinion. This Court's fault, if it was one, wasin a skepticism (grounded in prior conduct by the United States,not in mere surmise) as to whether the United States would infact "fashion its proposed remedy for past non-compliance, aswell as . . . show that it intends to comply in the future . . ."(717 F.2d at 385).

As the following findings of fact ("Findings") and conclusionsof law ("Conclusions") will reflect, this Court's anticipatorydoubts were unfortunately all too justified. Now the Departmentof Education has been given the opportunity mandated by the Courtof Appeals, and it has failed its charge dismally. In accordancewith Fed.R.Civ.P. ("Rule") 52(a), this Court sets forth theFindings and Conclusions that constitute the grounds of itsaction 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 thirdlargest public school system in the United States. In the 1980-81school year Board operated 634 schools, including 495 elementaryschools, 66 high schools and 73 special needs schools of varioustypes. In October of that school year Board had 458,497 students,whose racial/ethnic makeup was as follows:

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,including 29,000 members of the Chicago Teachers Union. Board isthe largest employer in Chicago and the second largest inIllinois. (Stip. 101)

102. After protracted and complex negotiations, the UnitedStates and Board entered into a Consent Decree, which was filedwith and approved by this Court September 24, 1980. (Stip. 102)Findings 103-04 give the background of the Consent Decree.

103. After desegregation negotiations in 1979 between theformer Department of Health Education and Welfare and the formerrepresentatives of Board had proved unsuccessful, the UnitedStates Department of Justice notified former InterimSuperintendent of Schools Caruso on April 21, 1980, that iffurther negotiations were not successful, the United States wouldinitiate a desegregation lawsuit against Board. (GX1-27[Government Exhibit 1, June 1983 hearing, Document 27]) Ensuingnegotiating sessions between the Department of Justice and formerBoard representatives primarily addressed whether the partiescould agree on specific racial percentages for a studentassignment plan and on the specific amount and timing of theEmergency School Aid Act (ESAA) funds that the Board wouldreceive to implement such a plan. (GX1-21,22) Board counselindicated that if the negotiations failed and litigationcommenced, Board would present counterclaims against agencies ofthe federal government. (GX1-39) There was no significantprogress in those negotiations. (GX1-21, GX1-22) (Stip. 103)

104. During those negotiations a new Board was appointed andtook office. (GX1-22) That new Board formed a DesegregationCommittee (GX1-21) and indicated to the United States it wouldbring fresh approaches to the negotiations (Id.) Thereafter Boardwas represented by its new leadership and by new counsel.(GX1-16) Negotiations then progressed rapidly, leading to a draftagreement within a few weeks (GX1-16) and to consummation of theConsent Decree within another six weeks. (GX1-14, 15) Thatprogress resulted from an altogether different focus. Rather thanseeking to negotiate the specific terms (or even somewhat moregeneralized terms) of a student assignment plan, the partiesinstead agreed to general principles that would guide subsequentdevelopment of a plan. (Consent Decree, Part I) Correspondinglywith respect to funding, the parties negotiated a generalprinciple applicable to both parties. Those negotiationsconcerning the general funding provision have been described ina 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 theConsent Decree 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 consideration 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 ConsentDecree to guide subsequent development of a desegregation planwere the following:

§ 2. Basic Objectives

2.1 Desegregated Schools. The plan will provide for 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 providefinancial resources "adequate for implementation of thedesegregation plan," the United States was agreeingto help pay for a plan that would include educational componentsin racially isolated schools (§ 2.2)[fn1a] covering the subject matteroutlined in § 7, in the development of which the Board wouldexercise discretion (§ 3.1). (Stipulations 101-06)

108. Circumstances surrounding entry of the Consent Decreeindicate that a joint and mutual obligation was contemplated. TheConsent Decree represents the only instance in which a majorurban school system has agreed, without any litigation ordetermination of liability issues, to develop and implement asystem-wide desegregation plan under court supervision. Itcontemplated that because of the demographics of the Chicagoschool system, a substantial number of minority children wouldinevitably remain in racially isolated schools, requiring theextensive and expensive use of compensatory educational remediesto alleviate the effects of past segregation. In 1980 (as now)Board was faced with massive financial deficits, and the jointfunding provision of the Consent Decree reflected recognitionthat Board's finances were such that it could not voluntarilyagree to develop, or successfully to implement, an effectivedesegregation plan of this type unless the federal governmentwere 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 overridinggoal of assuring that an effective desegregation plan wasdeveloped and implemented in Chicago. This joint purpose, withrespect to financing, included a requirement that the partiesprovide the total amount of funds adequate for implementation ofthe Plan. In Section 15.1 each party agreed to do everythingpossible to supply the necessary funding. (Stipulations 101-56;June 1983 Findings and Plan/ADR data on Board finances) TheUnited States' financial commitment under Section 15.1 was theprincipal quid pro quo for Board's willingness to foregolitigation and develop the Plan. In return for that commitment,the United States secured the full result it sought (and may nototherwise have achieved) without the expense and delay of complexlitigation. The United States also avoided potential liabilityfor a number of counterclaims that would have been broughtagainst it. (Findings 103, 105)

110. With respect to "what the parties reasonably expected atthe time of signing," the parties' Joint Stipulation(Government's Exhibit 2 in the June 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 supportany notion that there was a recognized specific dollar limitationincorporated in Section 15.1, based on the amount of previousESAA grants or otherwise. Indeed the Joint Stipulation reflectsthe parties had been discussing "funding possibilities relatingnot only to the Department of Education (including ESAA and otherprograms), but also other federal agencies such as the Departmentof Justice, the Department of Transportation, and the Departmentof Housing and Urban Development."[fn2a] As this Court has determinedpreviously, the extrinsic evidence points to an obligation toconduct a "universal search" (567 F. Supp. at 282 n. 6), not alimited examination of what ESAA fundingwas theoretically available to Board. (Stipulations 101-06;Government Exhibits 1 and 2 in the June 1983 hearing) This doesnot of course mean the parties contemplated issuance of a blankcheck to Board by the United States. But given the circumstancesof the negotiations, Board's known financial difficulties, itsinability to generate funds without the approval of othergovernmental agencies, the known major problems (and hence majorcosts) of implementing a desegregation plan in a school system aslarge as Chicago's (and with its racial mix), and other relevantfactors, the parties' reasonable expectations should certainlyhave embraced the potential need for the United States regularly"to find and provide" sums of the magnitude represented byBoard's proof at the current hearing. Although this Court ruledin limine (prior to the current hearings) certain areas of proofby the United States would be excluded, this Court hasnevertheless given full consideration to (a) the United States'offer of proof suggested by this Court as the means to completethe record and (b) Board's post-hearing response to that offer ofproof. Even taking that offer of proof fully into account (ratherthan treating it as excluded) this Court finds nothing in theUnited States' proof or proposed proof persuasively refutes thereasonableness of the expectations referred to in this Finding.Given the parties' Joint Stipulation that Section 15.1's "generalobligation . . . would be interpreted and applied as appropriatein whatever future circumstances might arise," this Court findsthe current circumstances make the interpretation of thatobligation to embrace the Board's current request (as modified bythis opinion) to be wholly appropriate for funding by the UnitedStates.

111. The Consent Decree in this case is the only instance inwhich the United States has entered into a desegregationsettlement containing the same or substantially similar languageto 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, Boardretained a team of independent, nationally recognizedconsultants. Dr. Robert L. Green was the Lead Consultant, withprincipal overall responsibility for the process. Dr. Green (nowthe President of the University of the District of Columbia) wasthen Dean of the College of Urban Development, Michigan StateUniversity. He was a leading national expert on desegregationplans, especially the aspect of desegregation that emphasizeseducational programs to provide equal and effective education forurban and minority children. Dr. Green had participated in manydesegregation cases and desegregation plans, traditionally as anexpert for the plaintiffs in such litigation, and frequently onbehalf of the NAACP. (Stip. 108) In addition to Dr. Green, fiveother education experts from outside the school system wereretained on a full-time basis to work on the EducationalComponents, along with 24 part-time "national consultants."Professor Ronald Edmonds (who has since died) was the primarynational consultant in the area of curriculum. While on thefaculty of the Harvard Graduate School of Education, Dr. Edmondshad directed the well-known major research project, Search forEffective Schools: The Identification and Analysis of CitySchools That Are Instructionally Effective for Poor Children.Professor Edmonds had also implemented his "effective schools"design as the principal instructional officer for the New YorkCity schools, with the title of Senior Assistant for Instruction.

113. Board's complete list of desegregation project consultantsis as follows:

Robert L. Green, Ph.D., 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

Judson 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,Northeastern Illinois University SuperintendentChicago, IL Benton Harbor Public Schools 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 PolicyHealth 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 YarlottUnivesity of Wisconsin Minneapolis Public SchoolsMilwaukee, WI Minneapolis, MN

(Stip. 109)

114. During the development of the Educational Components fromNovember 1980 through March 1981, Board submitted monthlyprogress reports to the Department of Justice, as required by theConsent Decree. (Stip. 110)

115. Dr. Green submitted his Recommendations on EducationalComponents to Board April 3, 1981. Two weeks later theRecommendations were adopted by Board as Part I of theDesegregation Plan: Educational Components. Part I's content issummarized 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 Desegragation and Affirmative Action

4. Evaluation

5. Monitoring

E. Appendix

(Stip. 111)

116. The following statements about Plan costs appeared atpages 17 and 19 of the "Financial Aspects" section in Part II ofthe Plan, adopted in April 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 programswere administered by a staff of three persons. Shortly after theinitial adoption of the Educational Components, Board created aspecial Office of Equal Educational Opportunity ("OEEO") tocoordinate the implementation of the Plan. OEEO is presentlyheaded by Dr. Nelvia Brady, Associate Superintendent, who was amember of Dr. Green's original desegregation planning staff.OEEO's office staff has expanded continuously since 1981 andpresently comprises 53 persons, of whom eight are clerical staff,eight are teachers (who are district-assigned), 13 areschool-committee representatives and 24 are teachers (7) andadministrators (17) assigned to the central office. Twenty-nineof the 40 education professionals (72.5%) have their principalresponsibilities in the area of implementing the EducationalComponents of the Plan. (Stip. 113)

Statements of the United States and this Court Relating to theEducational Components

118. On June 3, 1981 Attorney General William French Smithdelivered an address before the American Law Institute. Indiscussing the policy of the United States as to desegregationremedies, Mr. Smith stated (at 8-9):

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 henceforward 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 DesegregationPlan, filed in July 1981, the United States made the followingcomments about the 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 submittedtheir Joint Statement to the Court as to the development of thePlan. With respect to the Educational Components, the JointStatement (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 WilliamBradford Reynolds delivered a speech to the Education Commissionof the States, meeting in Chicago. In discussing the policy ofthe Department of Justice concerning 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 progressreports to the United States and to the Court, detailing theprocess of implementing the Plan, including the EducationalComponents. (Stip. 118)

123. In February and March 1982, following the adoption ofBoard's Comprehensive Student Assignment Plan, the Courtentertained briefs concerning the compliance of the total Planwith both constitutional requirements and the Consent Decree. TheUnited States Assessment of the Plan commented on the EducationalComponents as described in Finding 139. The Chicago UrbanLeague's Assessment of the Plan expressed strong concern aboutthe need to provide significant extra funding for implementationof the Educational Components in racially isolated schools:

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 onlycommitted itself to provide "Milliken II relief" to the extentthat funds are available. NAACP's July 1981 memorandum on thePlan stated "we have no specific objection to the content ofthese programs." NAACP's March 1982 brief did not comment furtheron the Educational Components. (Stipulations 119, 133)

124. On January 6, 1983 this Court issued its opinion ("OpinionI," 554 F. Supp. 912) approving Board's Plan as being clearlywithin the broad range of constitutionally acceptable plans. Withrespect to the Educational Components and funding, Opinion Istated (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 (filedApril 15, 1983) contained a section on "Financial Aspects" at402-23, which included 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 atleast $40 million on the Educational Components in raciallyisolated schools and on the desired expenditure of additionalamounts for these purposes, including the statements described inFindings 116 and 125, do not reflect any determination by Boardeither that the expenditure of $40 million would be "adequate"for that aspect of the Plan (in terms of Section 15.1) or thatthe expenditure of additional amounts for that aspect of the Planwould not materially aid its success or would not be necessaryfor 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 detailon the implementation of the EducationalComponents ("ADR II"). After the filing of ADR II this Courtprovided the United States and the amici curiae the opportunityto file comments. Neither the United States nor any of the amicifiled comments with the Court. (Stip. 122)

128. As the preceding review of the record reflects, the UnitedStates (a) strongly supported (indeed, insisted upon theinclusion of) Board's Educational Components as the developmentalprocess moved from the Consent Decree principles to the April1981 Educational Components Plan to approval by this Court and(b) raised no subsequent objection as Board proceeded to addprogrammatic details to those initial documents. Only when calledupon 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 asystem-wide desegregation plan with two basic objectives. Section2.1 called for creating the greatest practicable number of stablydesegregated schools, considering all the circumstances inChicago. As already described, the second objective was toprovide educational and related programs for schools thatremained racially isolated. (Stip. 123)

130. In January 1982 Board adopted its Comprehensive StudentAssignment Plan, which divides all schools in the school systeminto four broad categories. First of those categories is that ofthe residentially integrated school (defined as one whoseenrollment includes at least 30% white children and 30% minoritychildren, derived principally from residential or other naturalattendance patterns). Two basic types of schools come within thatcategory: (a) stably integrated and (b) integrated but withpotential for change. There is a third type of school identifiedin the Plan: currently integrated, but with an enrollment ofwhite children projected to decline below 30%.[fn3a] As of October1981 those three types of schools encompassed 67 schools with anenrollment of 52,067 students.[fn4a] (Stip. 124)

131. Next the Plan considers the category of the desegregatedschool: one whose enrollment includes at least 30% white childrenand 30% minority children, and which has been establishedprimarily by student assignment techniques under the Plan. Thatcategory includes both (a) schools that have previously achievedstably desegregated status through the implementation of variousstudent assignment measures (as of 1981, 42 schools with 20,329students) and (b) schools that in 1981 were yet to achievedesegregated status, through previously existing and newlyadopted student assignment techniques (in 1981, 33 schools with17,541 students). Such techniques include voluntary transferprograms and magnet and magnet-type programs within schools.(Stip. 125)

132. In addition the Plan describes various magnet-typeschools, which are established primarily in minority communitiesand are designed to promote desegregation by special educationalofferings and programs. Each such school has a target enrollmentcomposition, generally 15-35% white, 65-85% minority. In 1981such schools included 41 magnet schools, scholastic academies andmetropolitan high schools, enrolling 28,824 students. (Stip. 126)

133. Finally the Plan also considers schools projected toremain racially identifiable (with an enrollment of greater than70% minority children, less than 30% white children). In 1981there were 354 such schools, enrolling 275,794 students. Afterdescribing why those schools cannot practicably be desegregated,the Plan describes the compensatory educational arrangements thatwill be provided for at thoseschools and the various voluntary transfer arrangements in whichstudents enrolled at those schools may participate. (Stip. 127)

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

1981 Integrated 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 was that every school achieve by October 1983 a minorityenrollment of at least 30%. Under the other, by October 1983 theschool system as a whole had to achieve a minimum totalenrollment in all integrated and desegregated schools (includingmagnet schools). This latter requirement is generally referred toas the "desegregation index" requirement. (Stip. 129)

136. Additionally the Plan sets forth other student assignmentprovisions to be applied throughout the school system to provideand maintain the maximum practicable desegregation and to ensurethat the Plan will not initiate or authorize any segregativeactions. Among such provisions are those concerning schoolclosings, boundary adjustments and within-school segregation.(Stip. 130)

137. In a separate volume, the Student Assignment Plan containsschool-by-school analyses for each school in the system. Thoseanalyses describe in summary terms the work and considerationthat went into developing a desegregation strategy for eachschool. They also provide a detailed statement as to why it isnot practicable to desegregate a large number of schoolsremaining racially identifiable. (Stip. 131)

138. Detailed evaluation of the student assignment component ofthe Plan, including analysis of enrollment composition andprescription of specific actions for over 200 individual schools,is undertaken every year. Each such evaluation is reported on inan Annual Desegregation Review ("ADR"). (Stip. 132)

139. After the adoption of the Comprehensive Student AssignmentPlan in January 1982, the United States filed its 33-pageAssessment of the Plan. It explained the United States' beliefthat the Plan is constitutional and consistent with the ConsentDecree. In conclusion the United 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 systemwide 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 incorporatedthe Board's summary of its extensive and effective activities inthe 18 months from the entry of the Consent Decree to theadoption of Part III of the Desegregation Plan. This Courtfurther noted it had deferred ruling on the Plan for severalmonths, so that the promisesof the Plan could be "test[ed] in the crucible of reality." Inlight of the fall 1982 implementation results, this Court found"nothing in the execution of the Plan has been shown to disprovethe premises on which it was designed" (id. at 915). Finally,having reviewed the Plan in detail, this Court approved it asbeing "clearly within the broad range of constitutionallyacceptable 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 Plan during school year 1982-83 was aconsiderable success and (b) to a very significant degree itsprojections of student assignment outcomes had been realized. ADRI was also candid in its assessment of shortcomings and inadopting measures to address them. (Stip. 135)

142. In its May 1983 response to ADR I, the United Statesfavorably evaluated the Board's substantive implementationprocess (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 theStudent Assignment Plan became applicable as of October 1983.While the formal evaluation of the results of the Plan in the1983-84 school year is not yet due to be filed, Board filed aReport Concerning Preliminary Fall 1983 Enrollment Data onNovember 2, 1983, informing this Court that the requirement of30% minimum minority enrollment in all schools had been met.(Stip. 137)

144. For comparison with Finding 134, the following table showsfall 1983 data as to the number and total enrollment of thevarious school types identified in the Plan. Those data arecomparable with Finding 134, but it should be noted that therehas been some recategorization of schools to reflect theexperience of the past two years. As in Finding 134, the figuresexclude kindergarten students; therefore the total enrollmentshown is for grades 1-12, 41,260 students less than systemwideenrollment.

1983 Integrated 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 PublicSchools

145. Extensive demographic information is presented in both theComprehensive Student Assignment Plan (at 8-39) and in 1983 ADRI (at 20-23). (Stip. 139)

146. Racial composition of the total population of the City ofChicago from 1940 to 1980 is summarized in the following table:

White Non-White Total Year No. % No. % No.

1940 3,115,000 91.7 282,000 8.3 3,397,000 1970 2,208,000 65.6 1,159,000 34.4 3,368,000 1980 1,311,000 43.7 1,694,000 56.3 3,005,000

(Stip. 140)

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

Chicago Public Schools

Racial/Ethnic Composition 1970-1983============================================================================ | | White | Black | Other | Hispanic | |--------------|--------------|------------|------------- Year | Membership | No. % | No. % | No. % | No. %------|------------|--------------|--------------|------------|------------- 1970 | 577,679 | 199,669 34.6 | 316,711 54.8 | 4,925 .9 | 56,374 9.7 1971 | 574,495 | 188,312 32.8 | 320,797 55.8 | 5,608 1.0 | 59,778 10.7 1972 | 558,825 | 173,143 31.0 | 317,975 56.9 | 5,729 1.0 | 61,978 11.1 1973 | 544,971 | 160,846 29.5 | 314,089 57.6 | 6,306 1.2 | 63,730 11.7 1974 | 536,657 | 151,290 28.2 | 310,880 57.9 | 6,535 1.2 | 67,952 12.7 1975 | 526,716 | 141,264 26.8 | 307,549 58.4 | 7,589 1.5 | 70,314 13.4 1976 | 524,221 | 130,785 24.9 | 311,261 59.4 | 8,343 1.6 | 73,832 14.1 1977 | 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 16.1 1979 | 477,339 | 95,513 20.0 | 289,920 60.7 | 9,958 2.1 | 81,948 17.2 1980 | 458,497 | 85,292 18.6 | 278,726 60.8 | 10,253 2.2 | 84,226 18.4 1981 | 442,889 | 76,112 17.2 | 269,019 60.7 | 11,003 2.5 | 86,755 19.6 1982 | 435,843 | 71,171 16.3 | 264,530 60.7 | 11,396 2.6 | 88,746 20.4 1983 | 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 ishigher among public school students than among the overall citypopulation is that a large number of children (more than half ofwhom are white) attend nonpublic schools in Chicago, especiallythe Catholic parochial schools. Their metropolitan-areaenrollment of nearly 190,000 students makes the Catholic schoolsthe fifth largest school system of any kind in the United States.Within Chicago the Catholic schools as of 1982 had 226 schoolsenrolling 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 leveledoff this year after 15 years of decline that were oftencharacterized by very substantial drops. This year's decline intotal membership is only about 1800 (0.4%), compared with almost19,000 (3.9%) in 1980. As a historic matter, enrollment was372,278 in 1952. Student membership increased quite dramaticallyin the 1950s and the 1960s, reaching a peak of 580,292 in 1969.Since then enrollment has declined, generally at the rate of 2-4%per year, with the greatestdeclines between 1977-81 (over 15,000 students, or 3-4%, peryear). In 1982 the decline was 1.6% (7046 students), ascontrasted with the slight drop in 1983. (Stip. 143)

150. Enrollment of white students (now 67,829 or 15.6%systemwide) has declined at a significantly slower rate sinceadoption of the Plan. From 1977-81 white enrollment declined at9-11% per year (or 10,000-12,000 students). In 1982 whiteenrollment declined 6% (4,941 students) and in 1983, 5% (3,342students). (Stip. 144)

151. Black students now number 263,163 (60.6% systemwide). Aswith total enrollment and with white students, 1983 decline inblack enrollment of 1,367 students (0.5%) is significantly lowerthan declines of 2-4% in the preceding five years. (Stip. 145)

152. In contrast to white and black enrollment, Hispanicenrollment in the school system has been increasing steadilysince 1970, at the rate of 3-6% annually. Hispanic students nownumber 91,763 (21.2% systemwide). (Stip. 146)

153. Board's demographers believe the enrollment changessummarized in Findings 149-52 can be attributed to the followingfactors:

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 stableenrollments, an important factor contributing to changes is thetransfer rate between public and nonpublic schools. As thefollowing table reflects, the Chicago public schools have beengaining more students and losing fewer since 1980:

Student Transfers To/From Nonpublic Schools in Chicago

1980 1981 1982

Transfers from Nonpublic Schools in Chicago 6,084 7,041 7,934 Transfers to Nonpublic Schools in Chicago 12,919 11,648 10,177 ------ ------ ------ Net Loss 6,835 4,607 2,243 Total Membership 458,497 442,889 435,843 Percentage Net Loss 1.5% 1.0% 0.5%

(Stip. 148)

155. It appears the recent trend of enrollment decline in theChicago public schools has ended this year. Gradual increases canbe expected to begin next year, if the general demographic trends(particularly migration and transfer rates) experienced in therecent past continue in the years to come. Such a developmentwould point to increased demand for teachers and schoolfacilities. As to racial/ethnic composition, the school system isexpected to increase in minority enrollment. This is partlybecause of the greater proportion of whites in the upper grades,combined with continued outflow, and the higher birth rates forminority groups (particularly Hispanics) coupled with continuedimmigration of Hispanics. (Stip. 149)

156. Racial/ethnic composition of the elementary and secondarylevels of the school system as of October 1983 is detailed in thefirst table following Finding 157. These data are brieflysummarized as follows:

----------------------------------------------------------------- Type of Total School 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 2.4Systemwide 434042 67829 15.6 263163 60.6 91767 21.2 11283 2.6-----------------------------------------------------------------

(Stip. 150)

157. Racial/ethnic composition of the Chicago public schools bygrades is detailed in the second table following this Finding. Inbrief summary the data reflect higher proportions of minoritystudents in the lower grades. For example, minority enrollment is75-80% in grades 11 and 12, and 85-86% in first grade andkindergarten. (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 TOTALTYPE OF SCHOOL STUDENTS NON-HISPANIC NON-HISPANIC NATIVE ISLANDER MEXICAN PUERTO RICAN CUBAN OTHER HISPANIC HISPANIC------------------------------------------------------------------------------------------------------------------------------------------------------------------------ No. | | | # % | # % | # % | # % | # % | # % | # % | # % | # %------|---------------------------|---------|--------------|----------------|----------|------------|--------------|-------------|----------|-------------|------------- 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 23.2 19 | Academic Magnet Centers* | 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 24.1 14 | 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 20.8 6 | 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 14.7 6 | 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 19.1 5 | 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 8.3 6 | 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 12.9 4 | 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 48.0 7 | EVG Centers | 795 | 6 0.8 | 718 90.3 | -- -- | -- -- | 21 2.6 | 49 6.2 | -- -- | 1 0.1 | 71 8.9 25 | 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 | 508 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--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* Includes branches

SECONDARY LEVEL-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 44 | General/Technical* | 76,632 | 17,255 22.5 | 42,097 54.9 | 94 0.1 | 2,046 2.7 | 7,351 9.6 | 6,277 8.2 | 230 0.3 | 1,282 1.7 | 15,140 19.8 9 | 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 6.1 7 | 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 19.2 5 | 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--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

* Includes branches

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--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

[fn**] Included are schools for the physically and mentallyhandicapped, students with special needs, bilingual education,adult education and apprentice programs. Students on elementary,secondary and post-secondary levels are served.

CITYWIDE SUMMARY-------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 594 | Totals | 434,042 | 67,829 15.6 | 263,163 60.6 | 698 0.2 |10,585 2.4 | 55,020 12.7 | 29,828 6.9 | 1,123 0.3| 5,796 1.3 | 91,767 21.2--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Racial/Ethnic Composition of Chicago Public Schools

by Grades============================================================================GRADE | MEMBERSHIP | % WHITE | % BLACK | % OTHER | % HISPANIC----------------------------------------------------------------------------Pre-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 than70% 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 systemwide enrollment. There are275,091 students (69.4% of systemwide enrollment) attendingschools more than 90% minority. (Stip. 152)

159. Schools with more than 70% black and/or Hispanicenrollment will increase in number in coming years, as a resultof the demographic and transfer trends described in Findings145-57. (Stip. 153)

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

% Minority K & Pre-school Enrollment

90-95% 3,130 95-99% 3,978 99%+ 22,733 ------ 29,841

Such enrollment is projected to be at least as great in schoolyear 1984-85, and will probably increase. Kindergarten studentsrepresent approximately two thirds of this total, or 20,000students. (Stip. 154)

161. In schools with more than 90% black and/or Hispanicenrollment, the number of black and Hispanic children in grades1-3 in school year 1983-84 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 schoolyear 1984-85, 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 effectsof racial segregation on minority children; the nature and typesof desegregation programs that are capable of eliminating oralleviating those effects; the design, development andimplementation of the Plan; and the ability of federal Chapter 1and State Title I eligible programs to alleviate the effects ofpast segregation. She is presently Associate Superintendent,OEEO, and has primary responsibility for implementation of thePlan. (Brady testimony)

202. Dr. Brady was one of the experts with principalresponsibility for drafting the Educational Components of thePlan. (Brady testimony)

203. In April 1981 Board adopted the Recommendations onEducational Components (prepared by its nationally known expert,Dr. Green). Those Recommendations accurately explain thejustifications for educational components:

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 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 effortsin this area. In general that portion of her testimony addressedboth the student assignment aspects of the Plan and the elementsof the educational components of the Plan as to whichimplementation has already been initiated. She also discussed theelements Board intends to implement in school year 1984-85 ifthere is sufficient available funding. More specific testimony asto the implementation status of the Curriculum, Bilingual andVocational/Technical Education components was provided by Drs.Gerald Heing, Josue Gonzales, and Philip Viso, respectively(Testimony of Brady, Heing, Gonzales and Viso)

205. Dr. Brady showed Board has experienced significantsuccesses in its implementation efforts to date. Her testimonywas supported by evaluations performed during the last two yearsat the 45 racially isolated targeted elementary schools that werefirst included in the Chicago Effective Schools Project. (Bradytestimony)

206. Dr. Brady's testimony described the process by which thePlan was designed and developed. She related how past segregationin the Chicago public schools has affected the basic learningskills achievement levels of children, particularly minoritychildren now attending, or who in the future will attend,racially identifiable minority schools. She explained eachcomponent of the Plan is (a) carefully designed to alleviate theeffects of past segregation and (b) will substantially furtherimplementation of a successful desegregation plan. She furtherexplained that, given the historic backdrop and the demographicsof Chicago, full and successful implementation of the EducationalComponents is crucial to the success of the Plan. (Bradytestimony)

207. In substantial part the Educational Components areintended to eliminate or alleviate the effects of past racialsegregation on minority children who will remain in raciallyidentifiable schools under the Student Assignment Plan and whowill attend such racially identifiable schools in the future. Inpursuit of this goal, the Plan also addresses the need forsystematic and institutional changes in the manner in which theschool system provides educational services. (Brady testimony)

208. Minority children now attending Chicago public schoolssuffer, or have been affected by, one or more of the followingeffects of racial segregation:

(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 resultingfrom racial isolation cannot be remedied only by studentassignment, even where student assignment is available. Itrequires other remedies, particularly compensatory educationalremedies, where student assignment is unavailable. (Bradytestimony)

210. OEEO, in conjunction with other Board departments andunits, developed the programs described in Board Ex. 28. OEEO wasprimarily responsible for developing the following programelements:

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 and SpecialEducation was primarily responsible for developing the SpecialEducation and Discipline program elements.Its Department of Vocational and Technical Education wasprimarily responsible for developing the Vocational and TechnicalEducation programs elements. Its Department of Curriculum andInstruction was primarily responsible for developing thecurriculum program elements. Its Department of International andMulticultural Education was primarily responsible for developingthe bilingual program. Its Department of Research and Evaluationwas primarily responsible for developing the program to evaluatethe results of Plan implementation. (Brady, Viso, Heing andGonzales testimony)

211. Board's original version of proposed Board Trial Ex. 28was provided to the United States on or about September 16, 1983.(Response to Board's Second Set of Requests to Admit, No. 28)

212. Dr. Brady reviewed each program in Board Ex. 28 andtestified each program was designed to implement the EducationalComponents of the Plan, would significantly alleviate the effectsof past segregation and was necessary for a successfuldesegregation effort in Chicago. She described how each programelement was developed, how each works or is expected to work andhow each 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. Her testimony alsoexplained how the cost of each element was calculated. This Courthas considered in detail (a) Board's proof on an item-by-itembasis (including all submitted Exhibits and this Court's ownnotes on all the testimony made during the course of the hearing,supplemented where necessary by review of the transcript), (b)the United States' specific objections (as articulated at thehearing and as filed in a post-hearing memorandum April 20, 1984)and (c) Board's detailed post-hearing response filed April 30. Inso doing this Court has applied the standards taught by theLiddell and Arthur cases discussed in the Conclusions. It haspaid close attention to drawing the line between programs thatwill materially aid successful implementation of the Plan andthose that have a more generalized primary focus of improving thequality of general education in the school system. Except to theextent reflected by these Findings and Conclusions, Board's lastresponse to the United States' argument as to "specific failuresof proof contained in the Board's presentation" is whollypersuasive, and the objections of the United States are thereforerejected.

213. In school years 1981-82 and 1982-83, implementation of thePlan's Educational Components included the introduction andimplementation of Effective Schools Project ("ESP") programs at45 specially targeted racially identifiable schools and theimplementation of certain elements of the ESP program at otherracially identifiable schools. The 45 specially targeted schoolsare:

District School

3 Schiller

4 Hay Branch

5 Lowell Morton Stowe

6 Anderson Diego LaFayette Moos Von Humboldt Yates

7 Beidler Douglass Middle Goldblatt Melody Tilton

8 Chalmers Komensky

9 Dett Dodge Herbert Medill Primary Smyth Suder

10 Frazier Henson Lawndale

11 Donoghue Douglas Einstein Williams

12 Fulton 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 comparativeneed evaluation. First, all racially identifiable schools wereranked lowest to highest based on achievement test scores inreading and math, with a double weighting for reading, over atwo-year period. In addition, attendance and student mobilitystatistics and the extent of racial isolation were taken intoconsideration in the ranking process. That process produced aranked list of the lowest-achieving most racially identifiableschools in the system, and the 45 lowest on the list were chosenas target schools. (Brady testimony)

215. For school year 1983-84 the complete ESP program wascontinued at the 45 target schools and implemented for the firsttime at the 62 additional racially identifiable schools(including 7 educational vocational guidance centers) listedbelow:

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. Nobel Elementary Piccolo Middle School Ryerson Elementary L. Ward Elementary Wright Elementary

6 Anderson E.V.G.C. Chopin Elementary Koscuiszko Elementary Otis 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 Aldridge Elementary Carver Middle School Kohn Elementary(Board Exs. 30 and 112; Brady testimony)

216. Those 62 additional schools chosen to participate in thefull ESP program in school year 1983-84 were selected through thesame means initially used to select the 45 target schools. Usingthe formula stated in Finding 214, all racially identifiableschools in the system were again listed in order in the fall of1983, with the lowest-achieving most racially identifiable schoolranked first. After the 45 targeted schools already participatedin the ESP programs were deleted from the list (as automaticcontinuing participants), the 62 lowest ranking schools remainingon 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 schoolsis possible only because of the $20 million appropriation toBoard pursuant to the Yates Bill (discussed in later Findings),which provided only a one-year appropriation of funds. Boardcurrently lacks the financial resources to continue the ESPprograms at those 62 schools in school year 1984-85. (Brady andGlasper testimony)

218. Board Exs. 28, 31, 32, 110 and 117 accurately describe thefull ESP programs implemented at 107 racially identifiableChicago public schools. Those ESP programs were implemented inschool year 1983-84 in accordance with the Plan set forth inBoard Ex. 30. (Brady testimony)

219. Implementation of the full ESP program at the 107 schoolsin school year 1983-84 has not involved duplication of otherdesegregation programs previously placed in those schools, whichBoard is continuing to implement. Implementation of the full ESPprogram at those 107 schools and at an additional 100 raciallyidentifiable Chicago public schools in school year 1984-85 willinvolve only minor duplication of already existing desegregationprograms in those schools. (Brady testimony)

220. Board's essential purpose for its ESP program is toimprove instructional effectiveness in racially identifiableschools in order to improve educational outcomes for black andHispanic children. That means improving achievement levels,attendance, discipline and the likelihood of a student'ssuccessfully moving to the next school level or into society ingeneral. This is accomplished by programmatic interventionsaddressing six major areas: instructional emphasis, includingincreased time on task; leadership; use of assessment data;parental support and involvement; general school climate; andstaff development and training. Among the elements of the ESPprogram designed to increase a student's time on task areextended-day and extended-year instruction, and full-daykindergarten instruction. (Brady testimony)

221. One of the major goals of the ESP program, as described inBoard Exs. 28, 31, 32, 110 and 117, is to reduce the gap inachievement levels between national grade level norms and theachievement levels of minority children now attending, or whowill attend, racially identifiable schools in the system. (Bradytestimony)

222. "Effective schools" as a concept is based on educationalresearch that suggests if the proper learning conditions arecreated, all children, regardless of their race and the racialcomposition of the school they attend, can learn. "Effectiveschools" as a model is an important structure for ensuringimplementation of effective educational remedies at raciallyidentifiable schools. It serves as a primary focus forimplementation of the Plan's Educational Components, particularlythose in curriculum-related areas. Board's "Effective SchoolsProject" is derived from and supported by the leading research in"effective schools" learning. (Brady testimony)

223. Board's inservice training component at each ESP school isa local, school-specific program that provides staff with thespecialized skills necessary effectively to implement the Plan'seducational remedies. Each school's teaching staff is or will bereceiving training intended to eliminate unequal treatment ofminority pupils byraising each staff's awareness of its possible racial biases andby modifying any biased attitudes, expectations and behaviorstoward the teaching of minority pupils. Each school's teachingstaff also is or will be receiving training designed to developthe specialized skills, instructional methods and educationaltechniques necessary effectively to teach and to increase theacademic achievement of minority pupils who must remain inracially identifiable schools. Each ESP school's inservicecomponent is directed toward instructing staff in meeting theparticular educational needs of minority pupils and in adaptingexisting instructional approaches to meet those needssuccessfully. (Brady testimony)

224. Board's ESP program described in Board Exs. 28, 30, 31,110 and 117, as implemented in 107 racially identifiable schoolsin school year 1983-84, materially aids the successfulimplementation of the Educational Components of the Plan. ThatESP program eliminates or alleviates the effects of racialsegregation on minority children in that it raises theachievement levels of minority children, ends the unequaltreatment of minority children in racially identifiable schoolsby teachers and administrative staff, and reduces thepsychological pressures of attending racially identifiableschools and the resulting loss of self-esteem. (Brady testimony)

225. Implementation of the ESP program in the 45 raciallyidentifiable target schools in school years 1981-82 and 1982-83has raised the median level achievement scores of minoritychildren as described in Board Exs. 36, 37 and 38 (as substitutedand modified by Board Ex. 91). (Brady testimony)

226. To close the existing gap in grade level norms andachievement levels between students in integrated schools andminority students attending racially identifiable schools, itwill be necessary to implement the full ESP program in the 45original target schools for another 3 to 5 years and in the 62additional racially identifiable schools for another 4 to 6years. (Brady testimony)

227. With adequate funding, Board would continue to implementthe full ESP program in those 107 schools in school year 1984-85.In addition, it would implement the full ESP program in the next100 lowest ranking schools as determined by the same formula("Level II schools"). (Brady testimony)

228. Board Ex. 28, as modified by Board Ex. 117 and Dr. Brady'stestimony, sets forth the projected cost of implementing a fullESP program in 207 racially identifiable schools for school year1984-85. Those cost figures are reasonable under thecircumstances shown at trial. (Brady testimony; Glaspertestimony)

229. Board Ex. 28, as modified by Board Ex. 117 and Dr. Brady'stestimony, sets forth the estimated cost in school year 1984-85of implementing certain components of the ESP program at raciallyidentifiable schools ("Level III schools") not participating inthe full ESP program. Those projected cost figures are areasonable estimate under the circumstances shown at trial. Ifthe estimate of $10 million were to prove inaccurate, the figurescould be adjusted by reducing the United States' payment to Boardin a subsequent year. (Brady testimony; Glasper testimony)

230. Board Ex. 31 sets forth the amount Board expects to spendin school year 1983-84 for implementing certain components of theESP program at the 100 Level II racially identifiable schools notcurrently participating in the full ESP program. Those projectedcost figures are reasonable under the circumstances shown attrial. (Brady testimony; Glasper testimony)

231. To implement the Educational Components of the Plan, Boardmust at a minimum implement certain components of the ESP programat both the 100 Level II schools and the Level III schools. Suchcomponents to be implemented at the nonparticipant raciallyidentifiable schools are those that require full-day kindergartenat each of those schools, the use of extended-day andextended-year instruction, and the inservice training of staff atthose schools.For the reasons stated in Finding 224, implementation of thosecomponents of the ESP program at racially identifiable schoolsnot participating in the full ESP program will materially aid thesuccessful implementation of the Educational Components of thePlan. (Brady testimony; Glasper testimony; Board Ex. 117)

232. With adequate funding, Board would implement a full ESPprogram at the 100 Level II schools. Such full implementationwould materially aid successful implementation of the EducationalComponents of the Plan for the reasons stated in Finding 224.Board's cost of such implementation in school year 1984-85 wouldbe as shown on Board Ex. 117 and would be reasonable under thecircumstances. Full implementation at those schools would reducethe 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 inAugust and September of 1983, of the cost and budget breakdown ofthe program components (and the program elements) designedmaterially to aid the implementation of the Plan (Bradytestimony). Board Ex. 117 was prepared by the OEEO staff, underthe direction and supervision of Dr. Brady, in response torequests made by the United States and this Court during thecourse of this hearing. Board Ex. 117 reflects the cost in schoolyear 1984-85 of implementation of the full ESP program at 207schools and the partial implementation of the ESP program at allother racially identifiable schools (Brady testimony). It alsoreflects:

(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 components funded inschool year 1983-84 with moneys appropriated by the Yates Bill,Board Ex. 117 contains three columns of numbers: the firstrepresenting the line-by-line budget breakdown of costs as setforth in Board Ex. 28; the second representing those portions ofprogram elements actually funded in 1983-84; and the thirdrepresenting the amount required to implement those programs inschool year 1984-85. (Brady testimony) With respect to programcomponents funded in school year 1983-84 with incremental Boardfunds, Board Ex. 117 contains four columns of numbers: the firstrepresenting the line-by-line breakdown of costs as set forth inBoard Ex. 28; the second representing those portions of programelements actually funded in school year 1983-84; the thirdrepresenting the amount required to implement those programs inschool year 1984-85 (after consideration of non-recurring costs;and the fourth representing the amount Board will not be able tofund from its own resources in school year 1984-85, despite itsgood faith efforts.) (Brady testimony)

234. Board's Trainers Institute program is intended to buildwithin the Chicago public school system the internal capacity toprovide inservice training to teachers and staff forimplementation of the Student Assignment Plan and the EducationalComponents, and generally for the education of minority childrenin racially identifiable schools. That Institute will materiallyaidsuccessful implementation of the Plan. It will eliminate oralleviate the effects of racial segregation on minority childrenin that it will assist the raising of their achievement levelsand help end the unequal treatment of minority children inracially identifiable schools by teachers and administrativestaff. (Brady testimony)

235. With adequate funding, Board would fully implement theTrainers Institute in school year 1984-85. Board Ex. 117 setsforth the projected cost of implementing the Trainers Institutein 1984-85. That cost is reasonable under the circumstances.(Brady testimony; Glasper testimony)

236. Board's Management Information System is intended toestablish and maintain a comprehensive information system tocollect, analyze, review and disseminate data related to alldesegregation activities under the Educational Components and theStudent Assignment Plan. That System materially aids successfulimplementation of the Plan by tracing and measuring progress inachieving the goals of the Plan. Board Ex. 117 sets forth theprojected cost of the System. That cost is reasonable under thecircumstances. (Brady testimony; Glasper testimony)

237. Board's Equity Compliance program described in Board Ex.28 is intended to manage program expenditures, gather OEEOstatistical data, carry out desegregation reporting functions,monitor and audit desegregation activities and establish means tomeasure and assess compliance with the Plan. Each component ofthat program will materially aid successful implementation of theEducational Components of the Plan. Certain aspects of theprogram were implemented in school year 1983-84, as detailed inBoard Ex. 31 and 117. Its cost of implementation in school year1984-85, as set forth in Board Ex. 117, is reasonable under thecircumstances. (Brady testimony; Glasper testimony)

238. Board's systemwide Staff Development program for raciallyidentifiable schools, described in Board Ex. 28, is intended toprovide staff with the information and skills necessary toimplement effectively the Plan's educational components. Throughtwelve major conferences, staff from all racially identifiableschools will receive a general overview in manydesegregation-related areas, including the requirements of thePlan, and methods of ensuring equal educational opportunity in aracially identifiable school. Specific topics encompassed inthose conferences will address multi-cultural awareness andteaching approaches, effective discipline techniques, classroommanagement and instructional strategies to raise minority pupils'academic achievement. General staff development provided throughthe program is intended to introduce staff to problems inimplementing the Plan, and to increase staff's effectiveness indealing with the problems addressed. (Brady testimony)

239. Board's Staff Development program for the raciallyidentifiable schools will materially aid successfulimplementation of the Plan. It will eliminate or alleviate theeffects of racial segregation on minority children in that itwill assist teachers in raising the achievement levels of thechildren and it will help in ending the unequal treatment ofminority children in racially identifiable schools by teachersand staff. Its consultant component is required to hirespecialists to conduct inservice training conferences. Thoseconsultants are necessary to implement the Staff Developmentprogram. Board Ex. 117 sets forth the projected cost of theprogram for school year 1984-85. That cost is reasonable underthe circumstances. (Brady testimony; Glasper testimony)

240. Board's systemwide Staff Development program forDesegregated Schools, described in Board Ex. 28, is intended toprovide staff with general information and an overview of skillsnecessary to effectively implement the Plan's student assignmentand educational components. Staff from desegregated schools willreceive training in many areas, including the requirements of thePlan, multi-cultural awareness and teaching approaches, effectivediscipline techniques and classroom management in a desegregatedsetting.That program will materially aid the successful implementation ofthe Plan. It will eliminate or alleviate the past effect ofracial segregation on minority children now attendingdesegregated schools by assisting teachers in raising theirachievement levels. It will also assist in the effectiveimplementation of the Plan by raising staff awareness of andeliminating its unequal treatment of minority pupils indesegregated schools. As set forth in Board Exs. 28 and 117, thecost of that program is reasonable under the circumstances.(Brady testimony; Glasper testimony)

241. Board's Within-School Segregation Program is intended togather information about the racial composition of classrooms andto monitor the assignment of students to classrooms withinparticular schools. That program will materially aid successfulimplementation of the Plan. It will eliminate or alleviate theracial segregation of students in classrooms through, forexample, forms of "tracking" or "ability grouping." It willaccordingly ensure that students are actually taught, insofar asis practicable, in a physically desegregated environment. BoardEx. 117 sets forth the cost of the program for school year1984-85. That cost is reasonable under the circumstances. (Bradytestimony; Glasper testimony)

242. Board's Magnet Schools programs, described in Board Ex.28, are intended to construct new magnet schools, develop andexpand special curriculum offerings at certain raciallyidentifiable schools, and provide inservice training and staffdevelopment at 150 magnet schools and magnet programs.Specialized curriculum offerings or magnet programs will beintroduced or expanded at racially identifiable "communityacademies" as part of the special educational improvements andremedies required by the Plan. Staff training and advisoryservices are necessary and will materially assist staff inplanning and developing the expanded curriculum offerings and insuccessfully introducing them in racially identifiable schools.Except as stated in Finding 243, the Magnet School programsdescribed in Board Ex. 28 will materially aid successfulimplementation of the Plan. Board Ex. 117 sets forth the cost ofthose programs for school year 1984-85. That cost is reasonableunder the circumstances. (Brady, Glasper, Viso testimony)

243. Board did not demonstrate the proposed Residential MagnetHigh School would have sufficient marginal utility (on thetestimony it would serve only about 200 students), in relation toits more than $9 million cost, so as to justify a finding theschool will materially aid successful implementation of the Plan.By way of contrast, although the proposed Agricultural MagnetHigh School is also challenged by the United States asinsufficiently related to the purposes of the Plan, the testimonyestablishes that school would meet a demonstrated need and serveminority students in a manner that meets the standard stated inFinding 242. That is also true of all the other Magnet Schoolprograms.

244. Board's Staff Development Program at the 150 magnetschools and magnet programs, as referred to in Finding 242, isintended to meet school specific needs related to the particularschool's curriculum, including maintaining the consistency of themagnet program with systemwide standards, training teachers ininstructing students in the special magnet program offering, andplanning, developing and refining the magnet program to maintainits quality. That program also will train staff in multiculturalawareness, teaching approaches and classroom management in adesegregated school. Its purpose is to enhance the likelihoodthat magnet schools and magnet programs will develop and maintainthe quality curriculum and school climate necessary to attract adesegregated student body. (Brady testimony)

245. Each component of the Staff Development Program referredto in Findings 242 and 244 is directly related to the Plan andwill materially aid its successful implementation by raisingminority pupil achievement, eliminating unequal treatment ofminority pupils, and achieving andmaintaining physical desegregation in school populations. Withadequate funding the Board would implement those components ofits magnet school program in school year 1984-85. Board Ex. 117sets forth the cost of implementing those components in schoolyear 1984-85. That cost is reasonable under the circumstances.(Brady testimony; Glasper testimony)

246. Board's Special Education/Testing program described inBoard Ex. 28 is intended to implement and, as required by thePlan, to validate procedures designed to ensurenon-discriminatory assessment and placement of students ineducable mentally handicapped classes. Consultants and inserviceprograms are necessary to provide Board staff with the skills toevaluate whether its current assessment procedures are accurateand race neutral. In addition the Special Education/Testingprogram is intended to provide transition services and specialeducational support for students who were previously placed inmentally handicapped classes, based upon potentially biasedassessment instruments, and who are now being returned to theregular classroom. Inservice training is required to provideteachers and other staff with awareness of and the skills to dealwith such students' special educational needs during the periodof their transition to the regular classroom. (Brady testimony)

247. All components of the program described in Finding 246will materially aid Board's implementation of the Plan. It willeliminate or alleviate the effects of racial segregation onminority pupils by assisting their return to regular classroomsand thus raising their achievement levels, and it will help endthe unequal assessment and placement of minority pupils inspecial education classes. Its cost for school year 1984-85, asset forth in Board Ex. 117, is reasonable under thecircumstances. (Brady testimony; Glasper testimony)

248. Board's Vocational and Technical Education Program, asdescribed in Board Exs. 28 and 116, is intended to providevocational educational information to staff and students, torecruit minority students for vocational education classes, toprovide vocational educational support services for minoritystudents, and to expand and adapt vocational education programofferings to increase the opportunity for minority students toparticipate in vocational education programs. Inservice trainingand consultant services are required to acquaint teachers withvocational education opportunities open to minority pupils, toimprove the staff's skills and capabilities effectively toprovide vocational education services to minority students, andto assist staff in planning, developing and effectively providingadditional vocational program offerings to students. Theseinservice and consulting components are directly related to thePlan and will materially assist in implementing its Vocationaland Technical Education program. (Brady testimony; Visotestimony)

249. Except as stated in Finding 250, the components of theVocational and Technical Education program will materially assistthe Board in implementing the Plan. They will alleviate oreliminate the effects of past segregation in vocational andtechnical education programs by various activities intended toend the unequal participation of minority students in theseprograms. Their respective costs for school year 1984-85, as setforth in Board Ex. 117, are reasonable under the circumstances.(Brady testimony; Viso testimony; Glasper testimony)

250. One component of the Vocational and Technical Educationprogram testified to by Dr. Viso (the Handicapped component)cannot fairly be included in the cost of the Plan for currentpurposes. On the present record it lacks a sufficient nexus tothe purposes of the Plan — as compared with the general goal ofimproving the overall quality of education. Though in itspost-hearing submission Board stated that blacks represent ahigher percentage of EMH students in the system (about 81%) thantheir percentage of total school enrollment (about 61%), notestimony established what percentage EMH students were of thetotal "Handicapped" group that could be assisted by the program.Thus the testof materiality is not satisfied. This is simply a matter ofinadequacy of proof, and to the extent such proof may besharpened in subsequent years the item may perhaps be allowable.This Court of course recognizes that most of the other Vocationaland Technical Education components also involve estimates, buteach of those estimates is sufficiently reasonable (and noteffectively challenged by the United States) to satisfy Board'sburden of proof. In any case Board will be fully accountable forits use of funds, and to the extent there may prove to be anyover-allocation as to any item based on actual experience,adjustments in the United States' payments to Board can be madein future years.

251. Board's Department of Curriculum activities related to itsPlan needs, as described in Board Exs. 28 and 114, are intendedto ensure that curriculum offerings are consistent with the goalsof the educational components and modified and refined to meetthose goals. Desegregation-related activities in the Departmentof Curriculum will include planning, developing and implementingthe special curriculum improvements required by the Plan'sEducational Components, coordinating those improvements andmonitoring their consistency with systemwide educational goals,maintaining the curriculum and course quality of the specialeducational programs required by the Educational Components. Allinservice and advisory components of those programs are necessaryto provide Board staff with the information and skills to planand provide effectively the various curriculum development andimplementation activities necessary to achieve the overall goalsof the educational components. (Brady testimony; Heing Testimony)

252. Except as stated in Finding 253, the components of theCurriculum and Instruction program will materially assist theBoard in implementing the Plan by raising the achievement levelsof minority students and maintaining or enhancing the quality ofcurriculum designed to raise the achievement of minoritystudents. Board Ex. 117 sets forth the cost of implementing thesecurriculum and instruction activities in school year 1984-85.That cost is reasonable under the circumstances. (Bradytestimony; Heing testimony; Glasper testimony)

253. "High School Renaissance," as described in Dr. Heing'stestimony, was not sufficiently distinguished from Board'sordinary goals of system-upgrading to justify inclusion of thatprogram in Plan costs. Dr. Heing referred to providing a"strengthened diploma" — of course a commendable goal, but onethat appears clearly on the other side of what is admittedly notalways a bright line distinction between (a) Plan implementationand (b) general benefits to educational goals of the schoolsystem as a whole.

254. Board's Student Discipline program, described in Board Ex.28, is intended to provide discipline managers in schools whowill enforce the Uniform Discipline Code, provide training tostaff in the provisions of the Code and behavior modificationtechniques, develop and operate in-school suspension and behaviorimprovement programs as an alternative to suspension, and monitorand report on disciplinary infractions. That program willmaterially assist the Board in implementing the Plan byeliminating or alleviating unequal disciplinary treatment ofminority pupils. Its cost for school year 1984-85, as set forthin Board Ex. 117, is reasonable under the circumstances. (Bradytestimony; Glasper testimony)

255. Board's Bilingual Education programs, as described inBoard Ex. 28, are intended to assist in achieving the nationalorigin desegregation required by the Plan. Activities that wouldbe undertaken include establishing special "immersion"educational programs to instruct pupils in their native languagesuntil they can make the transition to regular classrooms,developing a special curriculum responsive to the needs ofbilingual students, performing research on the educational needsof bilingual and limited English proficient students, andrecruiting qualified bilingualteachers. Inservice training and consulting activities arenecessary to provide staff with the skills to conduct research,plan and develop bilingual and limited English proficienteducation programs, and effectively to instruct bilingual andlimited English proficient students. (Brady testimony; Gonzalestestimony)

256. Except for Statewide Network (which was withdrawn byBoard), each component of the Bilingual Education program willmaterially assist Board in implementing the Plan. Each willalleviate or eliminate the effects of segregation on bilingual orlimited English proficient students in that it will assist theraising of their academic achievement and help end the unequaltreatment of and unequal educational opportunities available tothose children. Each component's cost for school year 1984-85, asset forth in Board Ex. 117, is reasonable under thecircumstances. (Brady testimony; Gonzales testimony; Glaspertestimony)

257. Board's Evaluation program described in Board Ex. 28 isintended to permit OEEO to collect, analyze and evaluateinformation to determine the overall effects of the Plan, asimplemented, and to indicate areas where programs must be refinedor modified to achieve the Plan's goals. Consultant and inserviceprograms are necessary to provide staff with the skills toconduct this research and evaluate the effects of the Plan. ThisProgram will materially aid the successful implementation of thePlan by providing information necessary to continue and correctimplementation of the plan and to reach the Plan's goals. BoardEx. 117 sets forth the costs of the Evaluation Program for schoolyear 1984-85. That cost is reasonable under the circumstances.(Brady testimony; Glasper testimony)

258. Inservice training and staff development programsdescribed in various of Findings 223-57 do not duplicate eachother and do not duplicate other inservice training provided byBoard. Each program-related training or staff developmentactivity will address specific needs and topics related to theprogram it will assist in implementing. Those program-specificneeds will not be addressed to the extent required effectively toimplement the programs in the Educational Components in thegeneral, systemwide desegregation related staff developmentprograms operated by OEEO, nor in any other of Board's ongoingstaff development activities. (Brady testimony)

259. All costs (with reference both to the total amount and tothe amount Board is unable to fund despite its every good faitheffort) of the program elements set forth in Board Ex. 117 arereasonable estimates of the amounts needed to implement suchprograms. (Testimony of Brady, Viso, Heing, Gonzalez and Glasper)Those costs represent appropriate modifications, where required,of costs originally reflected in Board Ex. 28. In turn, the costattributable to each program element of Board Ex. 28 was includedtherein after consultation between the Budget Office, OEEO andcentral office administrative personal responsible for thepreparation thereof. (Brady and Glasper testimony) Thoseprojected costs were reviewed and verified by Board's Office ofBudget and Financial Planning. (Glasper testimony)

260. Of the $108 million in program components identified byBoard Ex. 28, approximately $6 million is being funded by Boardresources in school year 1983-84. (Glasper testimony)

261. Another $20 million, appropriated by the Yates Bill, isbeing devoted to Board Ex. 28 program components during thesecond half of the 1983-84 school year. (Brady testimony) BoardEx. 31 sets forth those elements of the Educational Components ofthe Plan that are being funded by the $20 million appropriated bythe Yates Bill. (Brady testimony)

262. Board Exs. 31, 35, 41 and 113 accurately describe thedesegregation programs and anticipated expenditures of Boardduring school year 1983-84. Those include the approximately $57million in expenditures for programs continued from school year1982-83, the planned approximately $10million increase in desegregation expenditures for school year1983-84 (further described in Board Exs. 35 and 113), and the $20million in anticipated expenditures resulting from by the YatesBill (further described 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; Brady testimony)

263. Neither Board Ex. 28 nor Board Ex. 117 makes any provisionfor increases in employee compensation over and above the levelsin effect for the 1982-83 school year. They do not, for example,take account of the 5% salary increase agreed to by Board and theChicago Teachers' Union for the 1983-84 school year or of anysuch future salary increases that may be negotiated between Boardand its employees. (Glasper testimony)

264. Set forth after Finding 265 is a chart that reflects theadjustments to Board Ex. 28 made by Board Ex. 117 (as describedin Finding 233) and that reflects the 5% salary increase[fn5a]implemented in school year 1983-84 referred to in Finding 263.Set forth on the following seven pages are individual charts thatreflect such 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, Bilingual Educationaland Evaluation (Brady and Glasper testimony).

265. As reflected by the attached charts, the level of fundingadequate for full implementation of the Plan in school year1984-85 (as modified to reflect Findings 243, 250 and 253) isapproximately $171.631 million. Of that amount, Board has beenable to budget approximately $67.773 million, leaving anincrement of approximately $103.858 million that Board, despiteits best efforts, will not be able to fund. For planningpurposes, it can reasonably be assumed that approximately$171.631 million 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 Project, at Level I and Level As Revised to II Schools (B) Partial Reflect the As Revised by Implementation at Level III Term of the Exhibit 117 to Schools (C) Consideration of Costs Set Forth Reflect Non-Recurring Costs and (D) As Revised to Reflect the As Shown on in the Program Correction of Assumed Continuation of Effect of the 5% Salary Page 1 of Sheets Included Errors and Incremental Board Funding in Increase Implemented in Program Exhibit 28 in Exhibit 28* Duplications 1984-85 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 21,093,741

Trainers Institute 563,678 563,678 567,678 144,599 167,211

Racially Identifiable Schools - Level II 17,000,000 17,000,000 17,000,000 --- --- Level III --- --- --- 10,000,000 10,000,000

Management Information 371,230 371,230 371,230 46,230 48,079

Affirmative Action 364,475 364,475 364,475 136,666 136,666

Equity Compliance 564,808 564,808 564,808 406,562 416,107

Staff Development 2,760,495 2,760,495 1,847,519 1,474,319 1,288,390 1,535,761 1,359,021

Within School Segregation 134,425 134,425 134,425 134,425 139,592

Magnet Schools 19,678,850 19,407,350 19,407,350 19,407,350 17,967,350 19,607,895 8,916,895

Special Education/ Testing 2,017,870 2,017,870 2,017,870 563,608[fn***] 606,613

Vocational/Tech 22,648,444 Education 25,991,634 24,423,954 24,468,599[fn**] 24,018,639[fn****] 22,197,484[fn****] 24,018,639 21,547,987

Curriculum 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 7,233,940

Bilingual Education 4,514,215 4,483,257 4,478,257 4,296,153 4,136,703 4,486,323 4,321,386

Evaluation 738,747 738,747 738,747 701,226 718,513 ------------ ------------ ------------ ------------ ------------ Total $108,785,468 $106,915,330 $106,945,999 $117,362,505 $111,987,861 $120,043,270 $103,858,642

* With regard to the Magnet Schools, Vocational/TechnicalEducation and Bilingual Education components, the amount shown onp. 1 of Exhibit 28 does not equal the sum of the costs shown foreach of the program elements included therein. This columnreflects the projected total costs for these program elements, asreflected by the program budget sheets included in Exhibit 28.

[fn**] As revised by Exhibit 116 with respect to the VocationalAssessment program element (Viso Testimony) and Board Post-TrialBrief.

[fn***] Reflects consideration of $222,655 of incremental Board fundsavailable for other purposes (Special Education — ReassessmentValidation) and assumes this amount will be used to fund otherelements of the Special Education component.

[fn****] See accompanying chart for Vocational Education programelements.

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

Staff Development

Racially Identifiable School $2,181,470 $1,268,494 $895,294 $709,365 $932,012 $755,263

Staff 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

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

Magnet Schools

Residential High School $9,251,000 $9,251,000 $9,251,000 $9,251,000 -0-

School for Agricultural Sciences 3,000,000 3,000,000 3,000,000 3,006,152

Program Expansion 3,001,600 3,001,600 3,001,600 3,079,480

Staff Development 2,017,500 2,017,500 2,017,500 577,500 2,028,375 588,375

Centralized Enrollment 121,250 121,500 121,500 126,088

Bus 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

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

Special Education/Testing

Special Ed/Testing/ Transition $1,452,870 $1,452,870 $786,263 $818,963

Assessment Techniques 565,000 565,000 -222,655 -212,350 ----------- ---------- --------- --------- Total $2,017,870 $2,017,870 $563,608 $606,613

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

Vocational/Tech Education

Community Resource Data Bank $311,750 $311,750 $306,017 $305,543 $306,017 $305,543

Wn.burne Trade School 14,125,000 14,125,000 13,865,251 13,843,753 13,865,251 13,843,753

Maximizing Training Levels 30,000 30,000 29,448 29,403 29,448 29,403

Vocational Articulation 955,660 955,660 938,086 936,632 938,086 936,632

Handicapped Component 662,692 662,692 650,505 649,497 650,505 -0-

Limited English Proficient Component 989,020 989,020 970,832 969,327 970,832 969,327

Student Service Corporation 771,902 771,902 757,707 756,532 757,707 756,532

Vocational 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[fn**] 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 1984-85 areallocated proportionately among program elements.

[fn***] No revision is made to reflect 5% salary increase as a resultof the pro rata allocation of "unfunded recurring" costs amongprogram elements.

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

Curriculum

Staff — Program Planning $144,688 $144,688 $387,856* $387,856[fn**]

Computer System 15,230 15,230 * [fn**]

Staff — Program Review 198,244 198,244 198,244 201,944

High 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 196,380 196,380 196,380 206,174

Bureau of Language Arts 385,831 385,831 385,831 399,162

Intensive Writing Improvement Program 1,823,820 1,823,820 1,823,820 1,908,195

Staff — Coordination of New Programs 586,361 586,361 * [fn**]

CMLMP Handbook 47,822 47,822 47,822 50,135

Paideia Programs 998,352 998,352 554,152 583,219

Assistants — 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 reflectedin this column represents the total "unfunded recurring" costsfor all four program 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 Non- As Revised by Exhibit Recurring Costs and the As Revised to Reflect As Reflected in the 117 to Reflect the Assumed Continuation of the Effect of 5% Salary Budget Sheets Set Forth Correction of Errors Incremental Board Increase Implemented in Program in Exhibit 28 and Duplications Funding in 1984-85 1983-84

Bilingual Education

Immersion Programs $358,041 $358,041 $358,041 $372,144

Evaluation Activities 697,270 697,270 697,270 537,894 721,599 556,662

Recruitment 86,972 86,972 47,668 50,668

Statewide Network 5,000 --- --- ---

Advisory Council 3,000 3,000 3,000 3,000

Public Involvement 390,781 390,781 390,781 406,412

Translation Activities 154,544 154,544 103,781 103,707 109,611

Parent Institute 36,500 36,500 36,500 36,500

Instructional Materials 350,000 350,000 297,453 297,963

Staff Development 204,365 204,365 168,699 192,346

Gifted Programs 155,610 155,610 155,610 159,386

Haitian Bilingual Center 60,306 60,306 56,556 57,756

Curriculum Development 1,935,132 1,935,132 1,935,132 2,031,889

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

Evaluation

Native Language Assessment $36,684 $36,684 $36,684 $38,112

Local School Development Program 678,596 678,596 641,075 656,634

ESEA Title VII Bilingual Desegregation Support 23,467 23,467 23,467 23,767 -------- -------- ------- -------- Total $738,747 $738,747 $701,226 $718,513

266. Each of the various programmatic elements that, in theirentirety, make up the Student Assignment and EducationalComponents of the Plan materially aids inthe desegregation of the Chicago public schools. (Testimony ofBrady, Viso, Heing and Gonzales) Those programs work togetherwith ongoing programs first implemented in earlier school yearsto achieve the goals of the Plan's Educational Components. (Bradytestimony)

267. Prior to school year 1983-84, only certain elements of theEducational Components had been implemented at the vast majorityof racially identifiable schools and, as a result, achievement ofthe Plan's overall objectives has been limited. Even with theimplementation of additional elements this school year because ofthe increased Board budget for desegregation and theappropriation in the Yates Bill, many other elements have yet tobe implemented. (Brady testimony)

268. At this point, school year 1984-85 is the first in whichfull implementation of the Plan could occur. In the months thatfollowed the June 1983 hearing, Board had anticipated that theresources necessary to implement fully the various components ofthe Plan would be made available by the United States for the1983-84 school year, so as to make it the first year of fullimplementation. As a result, Board Ex. 28 was prepared under theassumption that each of the various program elements would beinitially implemented in 1983-84. However, only $26 million innew financial resources became available, allowing for onlylimited implementation of these program elements. (Brady andGlasper testimony)

269. Because of the passage of time, full implementation becameimpossible in school year 1983-84. Given both the schedule ofthese proceedings (including the possibility of an appeal by theUnited States) and the nature of the school year calendar,additional resources could not be received and properly devotedto implementation of the programs before the beginning of schoolyear 1984-85. It is accordingly necessary to treat school year1984-85 as the first year of full implementation. (Bradytestimony)

270. Educational Components of the Plan were intended tosupplement Chapter I programs in racially identifiable schoolswhere such programs are in effect. If Chapter I funds were usedfor desegregation programs, the aggregate effects of low incomestatus and racial segregation would not be addressed, and lowincome minority students would receive less compensatoryprogramming than contemplated by Chapter I and the Plan. (Bradytestimony; Fagan cross-examination testimony)

271. There are a substantial number of racially identifiableschools not eligible for Chapter I programs, and even in thoseschools eligible for Chapter I programs a significant number ofminority students are not qualified to participate because theirachievement levels, while below grade level, are not low enough.In short, the latter group of minority children, and those nowattending or who will attend racially identifiable schoolsineligible for Chapter I programs, would be foreclosed fromcritical remedial programs designed to alleviate the educationalimpact of past segregation that affects each of them, even ifChapter I funds were used for funding for the Plan. (Fagancross-examination testimony)

272. Diverting Chapter 1 funds to Desegregation Plan costswould divest low income, educationally deprived students of thebenefits of Chapter 1 ECIA programs in order to provide minoritystudents the benefit of the Plan's Educational Components. Thatwould offset or neutralize the benefit of the desegregationremedy and would diminish the aggregate impact of thecompensatory and desegregation programs provided by Chapter 1 andthe Consent Decree. (Brady testimony; Fagan cross-examinationtestimony)

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

1983-84 Incremental Desegregation Expenditures

301. As of September 1983 the Chicago public school systemcomprised 70 high schools, 442 elementary schools and 25branches, 25 child-parent centers and a small number of schoolsof other types (such as special education facilities, apprenticeand trade schools, adult schools and bilingual-biculturalschools). Enrollment for the 1983-84 academic year isapproximately 434,000 students. As of June 1983 Board employednearly 40,000 persons, of whom approximately 27,400 wererepresented by the Chicago Teachers' Union and approximately9,500 were members of other unions and employee groups thatnegotiate with Board. (Stip. 201)

302. Board's budget for school year 1983-84 provides forappropriations of approximately $1.455 billion for operatingexpenditures. (Stip. 202)

303. As part of the $1.455 billion budgeted for operatingexpenditures in school year 1983-84, Board budgeted approximately$67.7 million for incremental desegregation expenditures. Afterreceiving the $20 million appropriated by the Yates Bill, Boardincreased that amount to approximately $87.7 million. (Stip. 203)

304. Incremental desegregation expenditures refers to thosedesegregation expenditures which are budgeted and accounted forby Board by specific three-digit codes. Those three-digit projectcodes identify appropriations and expenditures by their source orpurpose. (Stip. 204)

305. In 1980-81, the year in which the Consent Decree wasentered, incremental desegregation expenditures consisted ofcertain student assignment programs accounted for under ProjectCode 512 (as described in Finding 306). As Board expandedimplementation of the Plan in each subsequent school year,additional project codes were established to account for thevarious programs that constituted the components of suchexpansion. (Stip. 205)

306. Incremental desegregation expenditures are budgeted andaccounted for by reference to the following three-digit projectcodes:

(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.[fn6a]

(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 incrementaldesegregation appropriations and expenditures, identified byproject codes, for school years 1980-81 through 1982-83 andincremental desegregation expenditures of $87.7 million, alsoidentified by project codes, Board has budgeted for school year1983-84. (Stip. 207; Glasper testimony; Board Ex. 41)

FOUR-YEAR DESEGREGATION ANALYSIS SUMMARY

1980-81 1981-82 1982-83

1983-84 Budget Expenditures 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 4,035,843 Supplies 13,461 11,209 19,001 11,470 12,002 8,286 16,002 Rentals 170,595 114,300 87,492 87,492 78,039 78,030 72,000 Repairs 48,641 33,338 60,411 59,071 71,363 71,078 126,576 Trans. of Students 7,341,895 6,963,492 9,177,200 9,225,468 5,265,320 6,551,234 5,395,000 Carfare 163,800 304,804 506,304 503,693 1,368,184 803,698 975,000

Other 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 10,846,644 Supplies -0- -0- 600,000 555,463 10,000 9,086 10,500 Prof. Services -0- -0- 200,000 212,945 178,000 82,694 403,000 Printing -0- -0- 25,000 26,213 44,200 31,543 54,200 Auto Reimb. -0- -0- 18,200 10,681 10,578 10,570 10,146 Trans. of Students -0- -0- 25,000 22,399 -0- -0- -0- Miscellaneous -0- -0- 850,328 461,605 -0- -0- 644,117 Other -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 8,984,764 Textbooks -0- -0- 1,943,460 1,813,482 2,797,806 1,949,908 1,168,137 Supplies -0- -0- 524,647 1,816,377 -0- 523,624 -0- Miscellaneous -0- -0- 2,184,030 257,276 4,373,701 -0- 5,177,156 Equipment -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- 488,143 477,562 280,503 206,941 487,329 Prof. Svcs. -0- -0- 35,395 15,472 47,075 32,557 25,169 Auto Reimb. -0- -0- 5,589 2,443 7,433 5,139 3,489 Textbooks -0- -0- 26,080 11,400 34,687 23,982 7,976 Printing -0- -0- 72,653 31,758 96,628 66,807 262 Supplies -0- -0- 39,121 17,100 52,030 35,973 3,050 Other -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 1,425,791 Prof. Svcs. -0- -0- 211,090 146,417 215,788 131,020 52,603 Equipment -0- -0- 66,930 46,425 68,420 41,543 6,000 Travel -0- -0- 36,040 24,998 36,842 22,370 135,000 Printing -0- -0- 5,149 3,571 5,263 3,196 17,000 Textbooks -0- -0- 82,376 57,138 84,210 51,130 270 Other -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 6,997,005 Textbooks -0- -0- -0- -0- 210,400 350,037 1,492,445 Trans. of Students -0- -0- -0- -0- 5,805,000 5,104,707 8,880,000 Supplies -0- -0- -0- -0- 350,400 372,293 95,000 Equipment -0- -0- -0- -0- 869,845 1,358,831 97,180 Other -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- 2,000,000 Trans. of Students -0- -0- -0- -0- -0- -0- 2,000,000 Expan. 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- 14,060,346 Textbooks -0- -0- -0- -0- -0- -0- 1,444,060 Supplies -0- -0- -0- -0- -0- -0- 1,220,521 Prof. Svcs. -0- -0- -0- -0- -0- -0- 733,928 Repairs -0- -0- -0- -0- -0- -0- 1,374,797 Trans. of Students -0- -0- -0- -0- -0- -0- 365,220 Equipment -0- -0- -0- -0- -0- -0- 725,095 Other -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 53,255,250 87,773,271 =============================== ============================== ========================== ===========

308. Board budgeted and spent approximately $57 million for"incremental desegregation expenditures" in school year 1982-83.Of that amount approximately$2.3 million was derived from federal resources: approximately$.5 million in funds under Title VII of ESEA to implement certainaspects of the Plan's bilingual education components, andapproximately $1.8 million in funds received by Board underChapter 2 of ECIA. This latter $1.8 million was equal to theamount of ESAA funds Board had received before the repeal of ESAAand the enactment of ECIA and thus constituted that portion ofthe ECIA Chapter 2 block grant Board determined to allocate toimplementation of the Plan. All the remaining approximately $54.5million was derived from Board resources. (Glasper testimony)

309. Resources for the $87.7 million in incrementaldesegregation expenditures budgeted for school year 1983-84 arebeing provided as follows: approximately $65.4 million from localresources and approximately $22.3 million from federal resources.(Stip. 208)

310. Of the $22.3 million in federal resources provided to fundBoard desegregation expenditures, $20 million derives from theYates Bill, $1.8 million derives from ECIA Chapter 2 funds andapproximately $.5 million derives from ESEA Title VII. (Stip.209)

311. With respect to incremental desegregation expenditures,Board resources budgeted for desegregation implementationincreased by $10 million (or approximately 18%) from the levelbudgeted for the 1982-83 school year. Desegregationimplementation was the most significant area of programmaticexpansion undertaken by Board for school year 1983-84. (Stip.211; Glasper testimony; Bacchus testimony)

312. All the increase in federal resources received by Board inschool year 1983-84 for desegregation implementation isattributable solely to the $20 million appropriated by the YatesBill. (Stip. 212)

1983-84 Ancillary Desegregation Expenditures

313. Incremental desegregation expenditures do not includeexpenditures, referred to as ancillary desegregationexpenditures, that are made by Board to implement thedesegregation plan but are not identified by specific projectcodes and not included in the $87.7 million amount set forth inFinding 307. Included within ancillary desegregation expendituresare the costs of all "quota" or "formula" teachers at magnet andmagnet-type schools. For school year 1983-84 the cost of suchteachers is approximately $20 million. Also included in ancillarydesegregation expenditures are the costs of providing the basicsystemwide (or "formula") level of supplies and instructionalequipment at magnet schools, scholastic academies andmetropolitan high schools. (Glasper testimony)

314. Also included in ancillary desegregation expenditures arethe costs related to student transportation for the Disney MagnetSchool. This cost is approximately $1.6 million for school year1983-84.

315. Also included in ancillary desegregation expenditures arevarious central office and field administrative expendituresrelating to the implementation of the Plan. (Brady testimony;Glasper testimony)

316. Ancillary desegregation expenditures are expected tocontinue at approximately the 1983-84 level in future schoolyears. (Brady testimony; Glasper testimony)

317. Board does not contend that (a) these ancillary costsshould be included in the calculation of the amount required forfull implementation of the Plan or (b) the United States shouldbe responsible for funding all or a portion of such costs.However, these costs further emphasize that Board has devoted asubstantial amount of its total resources to the implementationof the Plan.

1983-84 School Budget — Board Resources and Expenditures

318. Evidence as to Board's present and projected financialcondition was presented through the testimony of Board's chieffinancial and business officers (J. Maxey Bacchus, Board'sBusiness Manager, and Rufus Glasper, its Director of Budgetingand Financial Planning) as well as through various Board budgetdocuments.

319. Board Ex. 43 is the Board's annual school budget for1983-84, which contains summary tables of Board revenue andexpenditures for the 1983-84 school year budget. (Stip. 216)

320. Board's four primary sources of operating revenue arelocal property taxes (34.6%), state school aid (45.6%), federaleducational assistance (13.8%), personal property replacementtaxes (3.8%) and miscellaneous (2.2%). (Stip. 217)

321. Rates at which Board can levy taxes for its four generaloperating funds (education, building, textbook and playground)are prescribed by the Illinois School Code (Ill.Rev.Stat. ch.122, ¶¶ 34-1 et seq.) and determined by the Illinois GeneralAssembly and not Board. Board is presently levying taxes forthose funds at the maximum rates authorized by the GeneralAssembly. (Stip. 218)

322. State school aid received by Board is determined byvarious formulae prescribed by the School Code, as determined bythe Illinois General Assembly and not Board. (Stip. 219)

323. Federal educational assistance received by Board isdetermined by (a) the amounts appropriated by Congress forvarious educational programs and (b) the manner in which theDepartment of Education and, in certain instances, the IllinoisState Board of Education determine to allocate these resources.Board does not have control over these determinations; its roleis limited to making applications and seeking to meet applicableeligibility and competition requirements. (Stip. 220)

324. Personal property replacement tax revenues are generatedthrough an income tax on corporations, an income tax onpartnerships and a tax on the invested capital on certain publicutilities. Those tax revenues are collected by the State ofIllinois and distributed to local taxing districts, includingBoard. (Stip. 221)

325. Personal property replacement tax revenue collections area function of the rates in effect for such taxes, as prescribedby the Illinois General Assembly. Personal property replacementtax revenues distributed to Board are determined pursuant to aformula prescribed by the General Assembly. Board does not havecontrol over those decisions. (Stip. 222)

326. In sum, as this Court said in Opinion I, Board "is not themaster of its own fate". 554 F. Supp. 912, 926. Except for its owntax levy, which has no available increment, Board's revenues arewholly determined by other governmental bodies and agencies,particularly the State of Illinois and the United States. To theextent Board has limited discretion over the amount of itsrevenues, such as the discretion to levy taxes up to a maximumamount permitted by state statute, Board has exercised suchdiscretion to maximize its revenues. (Stip. 216-22; Bacchustestimony; Board Ex. 155))

327. While Board has a limited ability to generate newresources, the United States, by sharp contrast, has the fullcapability of generating new resources or increasing existingresources. However the United States has not done so (and has infact taken extensive steps to limit the availability of funds fordesegregation implementation). (Board Ex. 57; Findings 401-67)

328. Of $1.455 billion in total Board operating expendituresbudgeted for school year 1983-84, approximately $1.162 billion(or approximately 75%) is budgeted for employee compensation,including pension and fringe benefits. All elements of employeecompensation are subject to negotiation between Board and thevarious employee groups with which it engages in collectivebargaining, including the Chicago Teachers' Union. Employeecompensation levels cannot be determined unilaterally by Board.(Stip. 223)

329. Of the same $1.455 billion, approximately $91 million isbudgeted for food and utilities, approximately $33 million forrepair and rehabilitation of school buildings and approximately$23 million for payment of tuition for handicapped children whocannot be served in the public schools. That tuition rate is setby the State Board of Education, not Board. In the aggregatethe various expenditure components described in Findings 328-29represent approximately $1.309 billion, or 90% of Board'sbudgeted operating expenditures for school year 1983-84. (Stip.224)

1979-80 Financial Crisis

330. Board suffered an acute financial crisis in November 1979.Its causes were the subject of various studies and commentaries,in particular a report of the Illinois General Assembly JointHouse and Senate Chicago Board of Education InvestigationCommittee. Its most immediate cause, however, was Board'sinability to engage in short-term borrowing. As a result itsuffered a severe cash shortfall. It was forced to decide whichof its obligations would be paid in timely fashion and whichwould of necessity be delayed in payment. By the latter part ofDecember 1979 Board was virtually without any available cash.Governor Thompson convened a meeting in Springfield in earlyJanuary 1980 to address Board's financial crisis. Participants atthat meeting agreed to a multi-faceted plan, including (a)adoption of the School Finance Authority Act (the "Act"), leadingto the creation of the Chicago School Finance Authority("Authority"); (b) a three-phased financing plan to provide fundsfor 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 educationalfund tax rate from 2.11% to 1.61% of equalized assessedvaluation, (ii) the appointment of a chief financial officer whohas responsibility for preparing and supervising Board's budgetand financial plan and who reports directly to Board and (iii)the expiration on April 30, 1980 of the terms of office of allBoard members who held office on January 16, 1980. (Stip. 225)

Relationship to School Finance Authority

331. Authority is a five-member body whose members areappointed by the Mayor and Governor and are not subject toapproval by the General Assembly. It was created to serve twobasic functions: (a) to exercise financial oversight and controlover Board; and (b) to issue bonds and notes to provide financingfor Board. It is to remain in existence until one year after thedate that all bonds and notes it has issued are paid in full. Itis currently anticipated Authority's obligations will not befully paid until 2009, so that it will remain in existence until2010. However, as discussed in the last paragraph of thisFinding, it is likely many of its powers will be suspended beforethat time.

Financial Control and Oversight Powers. The most significantpowers and responsibilities (and the corresponding duties imposedupon Board) are in the following areas:

(A) Budgets: Authority must approve or reject Board's annualbudget for each fiscal year. Each budget must contain suchinformation and detail as Authority may prescribe and must bebased upon the revenue estimates Authority approves or prepares.Board must submit its budget to Authority at least 45 days beforethe beginning of the fiscal year to which the budget relates, andAuthority is required to approve or reject Board's budget within30 days of its receipt. Standards are established by the Act forAuthority's review of the budget. It states Authority shallapprove any budget it believes to be complete, reasonably capableof being achieved and consistent with the Financial Plan then ineffect. Under the Act Authority does not have line-item vetopowers over the budget — it must either accept or reject thebudget in its entirety. Following the adoption of a budget for afiscal year, Board must notify Authority of any material changein its revenue or expenditure estimates for that year. Based onsuch changes Board may submit, or Authority may require Board tosubmit, a supplemental budget, or Authority may require Board totake other actions.

(B) Balanced Budget: Board is required to have a balancedbudget in accordance with the accounting system and proceduresAuthority prescribes. Authority has promulgated regulations togovern 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 orreject Board's Financial Plans. Each Financial Plan must cover aperiod of at least three fiscal years. It must contain adescription of revenues and expenditures, provision for debtservice, cash resources and uses, and capital improvements foreach fiscal year covered. Authority has promulgated regulationssetting forth the type of information and detail that must becontained in each Financial Plan. In connection with approvingeach Financial Plan, Authority must approve, reject or amendBoard's revenue estimates. It may also review Board's operationsand obtain budgetary data and financial statements. In general,Authority has a right of access to all information in Board'spossession that it deems relevant. Authority also may issuerecommendations or directives to Board to assure compliance withFinancial Plans and may require Board to submit modifiedFinancial Plans based upon revised revenue or expenditureestimates or for any other good reason. In the absence of abudget and Financial Plan that Authority has approved, the Actprohibits Board from making any expenditures other than forpayment of its debt service obligations. Authority's regulations,as amended, require Board to submit each Financial Plan toAuthority on or before the May 1 before the first fiscal year towhich the plan relates. Thus the Financial Plan for fiscal years1984-85 through 1986-87 was due May 1, 1984.

(D) Contracts: Authority has the power to adopt and amendregulations identifying categories and types of contracts andother obligations of Board that shall be subject to Authority'sapproval and the procedures for submitting contracts forapproval. Authority shall approve those contracts if, in itsjudgment, the information required to be submitted is completeand the contract is consistent with Board's budget and FinancialPlan then in effect. Authority has adopted regulations settingforth the types of contracts for which its approval will berequired. They include collective bargaining agreements,contracts involving an amount in excess of $10 million, contractsin excess of $1 million involving the disposition of realproperty and contracts creating an obligation to repay borrowedmoney.

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

(F) Accounting and Auditing: Authority may direct Board toreorganize its financial accounts, management and budgetarysystems in whatever manner Authority deems appropriate to achievegreater financial responsibility and efficiency. Authority alsohas the power annually to approve Board's appointment ofcertified public accountants to audit Board's financialstatements.

(G) Cash Management: Authority is authorized to require Boardto establish and maintain separate cash accounts and separatebank accounts in accordance with such rules, standards andprocedures as Authority may prescribe. Authority also may assumeexclusive administration of Board's cash accounts and bankaccounts and withdraw funds from such accounts for Board's lawfulexpenditures.

Duration of Powers: Authority will retain the power to approveor reject Board's budget and the power to examine its businessrecords and audit its accounts for as long as Authority remainsin existence. However, other powers of Authority set forth above(including without limitation the power to review and approveFinancial Plans and contracts and to require Board to appoint aChief Financial Officer) become suspended upon certification tothe Mayor and Governor that Board has completed three successivefiscal years with a budget balanced in accordance with standardsprescribed by Authority. But the Act also provides the suspendedpowers will be restored upon Authority's certification that Boardhas failed to adopt a balanced budget or failed to achieve abalanced budget for two successive fiscal years. It is generallythought Board's fiscal year ended August 31, 1982 was the firstfiscal year to qualify under this statutory definition, so thatBoard has now achieved two successive years of a "balancedbudget." (Stip. 226; Board Ex. 115)

332. Authority has approved Board's budget for school year1983-84 as complete, reasonably capable of being achieved andbalanced in accordance with accounting systems and proceduresprescribed by Authority. (Stip. 227)

Projected Deficits for Future Years

333. Board has adopted, and in December 1983, Authorityapproved Board's Financial Plan for fiscal years 1984-86. ThatFinancial Plan is Board Ex. 51. (Stip. 228) It projects thefollowing deficits: for fiscal year 1984-85 — $146.7 million; forfiscal year 1985-86 — $71.9 million. (Stip. 229)

334. Board's projected deficit for fiscal year 1984-85 is basedon projected expenditures of approximately $1.490 billion andprojected revenues of approximately $1.343 billion. Board'sprojected deficit for fiscal year 1985-86 is based on projectedexpenditures of approximately $1.532 billion and projectedrevenues of approximately $1.460 billion. (Stip. 230) Thoseprojections are based on a series of assumptions set forth atpages 3-1 through 3-8 of the 1984-86 Financial Plan. (Stip. 231)

335. Among the assumptions upon which the 1984-86 FinancialPlan is based are (a) no increases in employee salaries over thelevel in effect for school year 1983-84 (except for longevity or"step" increases relating to increased years of service); (b)certain percentage increases in federal funding; (c) no expansionof educational programs funded by general Board resources (asopposed to state-mandated or federally-funded programs); (d)continued funding for incremental desegregation expenditures ofapproximately $67.7 million (that represents a continuation ofdesegregation programs budgeted from Board funds for school year1983-84, but without the $20 million one-time appropriation fromthe 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 for1984-85 (as set forth in its Financial Plan) reflect a netdecrease of approximately $13 million resulting from (a) adecrease of $20 million (reflecting the one-time nature of thefunds appropriated by the Yates Bill) and (b) a net increase ofapproximately $7 million in various other federal funds receivedby Board, including ECIA, Chapter I funds.

337. In June 1983 the Illinois General Assembly restored to2.11% the maximum rate at which Board could levy taxes for itseducational fund. It also adopted legislation that providededucational fund taxes could be extended at the 2.11% ratebeginning in calendar year 1983. Absent this additionalamendment, the extension rate for calendar 1983 would haveremained at 1.61%, and Board would not have received an increasein cash receipts resulting from the tax rate increase until its1984-85 fiscal year. In essence the "extension rate" increaseallowed Board to take immediate advantage of the educational fundtax rate increase described above by collecting taxes that hadbeen levied in the prior calendar year but could not otherwisehave been collected. (Stip. 233)

338. Board's projected deficits for fiscal years 1984-85 and1985-86 included in the 1984-86 Financial Plan derive in partfrom an Authority directive that Board project educational fundtaxes will be collected in calendar year 1984 at a rate lowerthan 2.11% of equalized assessed valuation. Board believesAuthority's position is incorrect because the 2.11% rate shouldand will be applicable to calendar year 1984 educational fund taxcollections. In summary the nature and significance of thedisagreement 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.[fn7a]

(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.[fn8a] 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. 234)

339. Board and Authority agree that if Board's position as tothe applicable educational fund tax collection rate is correct,Board's Financial Plan would still project operating deficits ofapproximately $81 million for school year 1984-85 andapproximately $91 million for school year 1985-86. (Stip. 235)

340. Board does not have sufficient revenues from presentsources to cure the projected deficits for school years 1984-85and 1985-86 (which are based on the assumptions set forth inFinding 335). In fact, it may be virtually impossible for Boardto avoid annual financial crises or attain long-term financialstability in the near future. (Bacchus testimony)

341. Because Board's budget and financial affairs are subjectto Authority's review and oversight, and because of the intensiveand rigorous scrutiny and financial oversight provided byAuthority, Board's projections as to operating deficits in futurefiscal years are entitled to 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 fiscalyear 1983-84 of approximately $200 million. That projecteddeficit was eliminated, in part, as a result of Board's receiptof additional revenues. (Stip. 236)

343. Most significant of the revenue increases that contributedto the eliminationof Board's projected deficit for school year 1983-84 were (a) anincrease of approximately $100 million in educational fund taxesand (b) an "increase" of approximately $65 million in Statedistributive fund aid. In fact, almost all of this so-called"increase" represented no more than a restoration of State aid tothe level in effect for the prior school year. Also contributingto the elimination of this projected deficit were small increasesin miscellaneous revenues and various expenditure reductionseffectuated by Board. (Stip. 237; Board Ex. 115)

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

345. Board lobbied vigorously in support of both of thelegislative measures described in Finding 344. Its lobbyingactivities included meetings among the General Superintendent,Board members, and members of the General Assembly, and theGovernor and his staff. Board also organized rallies and publicdisplays of support for those legislative measures and draftedappropriate amendments to the School Code, which enabled Board totake immediate advantage of the increase in educational fund taxrates. (Bacchus testimony)

346. Board's commitment to increase expenditures forincremental desegregation programs by $10 million is anassumption upon which the projected deficit of $200 million forfiscal year 1983-84 was based. Therefore, Board's efforts toincrease its revenues for fiscal year 1983-84 were taken in partto fulfill its commitment to increase its incrementaldesegregation expenditures. (Bacchus testimony)

347. Since the entry of the Consent Decree, Board hasrepeatedly sought to obtain funding for desegregation from theState of Illinois. As a part of its efforts, Board has draftedand proposed legislation that would provide desegregation fundingfor Chicago. Such legislation is also included as a part ofBoard's legislative program for 1984. To date Board's efforts inthis regard have been unsuccessful. (Bacchus testimony)

348. Board's budget for school year 1983-84, as approved byAuthority, was balanced only after approximately $23.6 million inexpenditure reductions from Board's original proposal (includingat least approximately $12.2 million in reductions from theexpenditure level for the 1982-83 school year). Proposeddesegregation expenditures were not reduced. (Bacchus testimony;Glasper testimony)

349. In the summer and fall of 1983, Board encountered aprolonged dispute with the collective bargaining representativesof its employees, including the Chicago Teachers' Union. Thisincluded a three-week strike of Board employees, whose principaldemand was for increased compensation. Board employee groupsspecifically and consistently demanded that Board delete itsproposed $10 million increase in desegregation expenditures anddevote those funds to increased employee compensation. Boardsuccessfully resisted that demand and preserved the proposedincrease in desegregation expenditures for its 1983-84 schoolyear budget, thereby complying with Board's previously madecommitment and determination as to its level of desegregationexpenditures in 1983-84. (Bacchus testimony)

Federal and State Funds Received by Board

350. Board submitted applications for an ESAA grant in fiscal1981 and for Title IV grants in fiscal years 1980 and 1981 aspart of those programs' regular grant review process. Board's1981 ESAA application was for approximately $23.8 million, andthe amount of the grant was $1.8 million. Board's awards of$422,800 in fiscal 1980 and $298,639 in fiscal year 1981 were thelargest 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$9 million and$13 million for funds from the Secretary's Discretionary Fund.Those applications were ranked by the Department of Education13th and 28th, respectively, out of 34 applications received inthe priority area for which they were filed. Only 10 programswere funded. (Stip. 337)

352. ECIA Chapter 2 consolidates, on a block grant basis,several programs for which Board previously received funds on acategorical basis. Among the programs consolidated are: BasicSkills (ESEA Title II); Instructional Materials and SchoolLibrary Resources (ESEA Title IV-B); Improvement in LocalEducational Practice (ESEA Title IV-C); Emergency School Aid(ESAA Title VI); and Teacher Corps (Higher Education Act. TitleV-A). As a result, Board receives approximately $5.5 to $6million annually in block grant funds (allocated and distributedby the State Board of Education) appropriated to finance avariety of educational programs, some of which are continuationsof previously funded categorical programs and some of which arenewly implemented and established programs. Board is allocatingapproximately $1.8 million — an amount equal to what it receivedunder ESAA prior to its repeal — of its Chapter 2 block grant todesegregation purposes in fiscal year 1983-84. (Stip. 210;Bacchus testimony; Glasper testimony)

353. Board received federal assistance before the ConsentDecree, and continues to receive such assistance today, under thevarious federal programs referred to by the United States.Together those funds, including ECIA Chapter I, encompass thecategorical federal educational assistance received by all schooldistricts in the United States, including Board, for essentialbasic educational programs. Those funds have been and continue tobe received by Board on the basis of criteria that are unrelatedto and do not take into account either the Consent Decree or thecosts 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:[fn9a]

(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 ofthe ECIA on urban school districts undergoing desegregation (andin particular Chicago), the Secretary has opposed efforts tore-enact ESAA or otherwise authorize special assistance fordesegregation activities. (Secretary Bell's letter to Sen. Hatch,October 18, 1983, in Board Ex. 118)

356. Amounts received by Board in school years 1978-79 through1983-84 from the Department of Education under Chapter 1 of theECIA and the antecedent program to Chapter 1 (Title I of theElementary and Secondary Education 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"reasonable expectation of the parties at the time of signing theConsent Decree" that Chapter 1 (formerly ESEA Title I) funds towhich Board was already entitled would constitute all or part ofthe United States' contribution to funding the Plan. There was noconsiderationor discussion of this subject at that time. (United States'Answers to Board's Sixth Interrogatories, No. 1.) No basis existsfor finding such an expectation.

358. Chapter 1 is intended to serve the lowest-achievingchildren within a particular attendance area. Its statutoryscheme is race neutral. It is a scheme that targets funds toschools with the highest concentration of low income children whoare Chapter 1 eligible. Within a school eligible for Chapter 1funding, however, the selection of children to be served byChapter 1 programs is determined by achievement level, regardlessof an individual child's poverty. (Fagan testimony)

359. In educators' terms an educationally deprived child is achild whose achievement is below the average achievement levelfor children of the same age. For children like those attendingthe Chicago public schools, whose achievement is measured by theIowa Testing Battery, educational deprivation refers toachievement scores below the 50th percentile. Black and Hispanicchildren are generally lower achieving than their whitecounterparts when they enter the educational system. That meansa greater preponderance of Black and Hispanic children are belowthe 50th percentile when they enter the educational system, andthe preponderance does not change as they progress through thesystem. (Fagan testimony)

360. It is a goal of the Chapter 1 statutory scheme to move alow achieving child toward grade level and sustain those gains.Removing a child from a Chapter 1 Program would threaten anyexisting achievement level gains. Removing a child from a Chapter1 program for the summer could threaten any gains that occurredduring the preceding school year. (Fagan testimony)

361. All of the approximately 40% of children in raciallyidentifiable schools who are served by Chapter 1 programs were orare projected to fall further behind grade level achievementnorms as they progress through the system. They start first gradesignificantly behind majority and minority children of the sameage who are attending the same or other schools. Chapter 1programs are intended to start those below-grade level minoritychildren closer to other children, and to keep them from fallingfurther behind as they move through the system. (Brady testimonyand inference 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 ESPprogram was implemented in the 1983-84 school year, 55 are servedby Chapter 1 programs. Of the 100 schools receiving Level IIintervention in school year 1983-84, 42 are not served by Chapter1 programs. (Based on U.S. Ex. 23 and Stip. 151 with accompanyingtables)

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's100 Level II ESP schools have a total enrollment of 67,029, ofwhich 10,866 are served by Chapter 1 programs. (Based on U.S.Exs. 23 and 37 and Stip. 151 with accompanying tables)

364. Certain of Board's Educational Components are not eligiblefor Chapter 1 funding because they are not designed to meet thespecial educational needs of educationally deprived children, donot serve low-income schools or are central or system-wide incharacter. (Fagan testimony)

365. Chapter 1 programs and Board's ESP program could worktogether to provide an extra benefit to Chapter 1 eligiblechildren in terms of closing the achievement gap between Blackand Hispanic children and the average achievement level for allchildren of the same age. (Fagan testimony)

366. Test results demonstrate the Chapter 1 and State Title Iprograms have only marginally narrowed the initial achievementgap for segregated minority children who begin first grade inracially identifiable schools, and have done no more thanmarginally reduce the rate by which they fall further behindgrade level. (Brady testimony)

367. State Title I funds received by Board as part of itsgeneral State aid, including both the systemwide and targetedportions of such funds, are intended to provide resources toBoard for the higher costs of providing basic and compensatoryeducation to low income, educationally deprived children. Thosefunds were already being received by Board at the time theConsent Decree was signed. Consent Decree § 2.2 was intended toprovide supplemental educational programs, rather than merely tomaintain programs then in existence. Simply to shift money fromState Title I programs to pay for desegregation programs wouldeliminate any supplemental character of the desegregation remedy.(Bacchus testimony)

368. Among other goals, the Educational Components weredesigned (a) to give minority children an opportunity for anequal start after decades of segregation and (b) to assist thosealready in the system who are behind and falling further behindto catch up. That achievement gap is an obvious pernicious effectof segregation, which any constitutional plan must address withviable programs. Simply to shift money from Chapter 1 and StateTitle I programs to pay for desegregation programs wouldeliminate any supplemental character of the desegregation remedy.(Based on Bacchus, Brady testimony)

Board's Good Faith Efforts

369. As of June 30, 1983 Board had already expendedapproximately $120 million in its efforts to implement fully thevarious elements and components of the Plan, and had appropriatedapproximately $67 million for this purpose in school year1983-84. Those actions were taken at a time when Board wassuffering severe financial constraints and projecting a budgetdeficit 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. Inlight of these facts, this Court found in Opinion II that fromSeptember 24, 1980 to June 30, 1983 Board had made every goodfaith effort to find and provide every available form offinancial resources adequate to pay the costs of fullimplementation of the Plan. (Findings 3-7, 567 F. Supp. at 274).

370. During the same time period (as of June 30, 1983, whenBoard had expended $120 million) the United States provided onlyabout $2.5 million in direct desegregation assistance (almost allin fiscal 1981), despite the fact it had substantial additionalfunds available that it could have provided to Board had it madeevery good faith effort. (Glasper and Bacchus testimony)

371. Board's good faith compliance with the Consent Decree inits allocation of resources among competing needs has beendetermined as a factual matter in Opinion II, Finding 3, 567F. Supp. at 274. That determination was not appealed, and it isthe law of the case. Comparable decisions made by Board in itsallocation of available resources since June 30, 1983 and for thefuture also constitute every good faith effort. (Glasper, Bradyand Bacchus testimony)

372. In light of the fact the Educational Components of thePlan were intended to provide a supplemental remedy for minoritystudents attending racially isolated schools, Board has sought,from both the United States and the State of Illinois, newresources for the Plan that are supplemental to those alreadybeing provided. As an example, Board has succeeded in obtaininga restoration of previously unavailable taxing authority from theState of Illinois. To the extent Board is unable to obtain newresources, however, Board faces a Hobson's choice between (a)inability to implement the Plan and (b) allocating funds toimplement the Plan by shifting existing resources or revenueincrements from other educational obligations and priorities. Inexercising its narrow areas of choice, Board has made every goodfaith effort to provide funds, in compliance with the ConsentDecree. (Bacchus testimony; Glasper Testimony)

373. Consent Decree § 15.1's good faith obligation does notrequire Board to reallocate unlimited amounts of its generalrevenues away from basic educational programs to the Plan. Boardis in full compliance with the Consent Decree without doing so.Nor does the good faith obligation of the Consent Decree requireBoard to reallocate more State Title I funds to pay desegregationexpenses. Board is in full compliance with the Consent Decreewithout doing so.

374. Board's decision to allocate approximately $1.8 million ofits 1983-84 ECIA Chapter 2 block grant to incrementaldesegregation expenditures constitutes "good faith efforts" underSection 15.1. (Bacchus testimony)

375. Board's decision to budget approximately $67.7 million ofits 1983-84 operating revenues (excluding the moneys appropriatedby the Yates Bill) for incremental desegregation expendituresconstitutes "every good faith effort" under Section 15.1. Underthe present circumstances, a decision to budget such amount ofoperating revenues for incremental desegregation expenditureswould also constitute "every good faith effort" for the 1984-85school year. (Bacchus testimony; Glasper testimony)

376. In light of Findings 301-75, Board has continued sinceJune 30, 1983 to make every good faith effort to find and provideevery available form of financial resources adequate to pay thecosts of full implementation of the Plan.

Addendum A to Findings 301-76

State Title I Overview

To understand the relationship between desegregationexpenditures and State Title I school aid, an overview of Stateaid to education in general and of State Title I funding inparticular is necessary. Board receives Common School Fund StateAid (often called "general State aid" or "State distributive fundaid"), distributed by the State Board of Education through theCook County Regional Superintendent of Schools. Amounts sodistributed to Board (as well as to other school districts inIllinois) are determined by a mathematical formula set forth inSection 18-8 of the School Code, Ill.Rev.Stat. ch. 122, ¶ 18-8.That formula computes the level of State aid to school districtson the basis of each pupil counted in a district's "average dailyattendance." Average daily attendance is defined as (a) the sumof all student attendance days reported over certain periodsduring each academic year divided by (b) the number of days ofinstruction held during such periods. In computing the amount ofsuch 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 CommonSchool Fund State Aid distributed to Illinois school districts isto be based on the number of economically disadvantaged childrenenrolled in each district. That portion is identified as StateTitle I aid and is based on the number of "Title I eligible"students in the district, "Title I eligible" being definedpursuant to Chapter 1 of ECIA (the Education Consolidation andImprovement Act of 1981), formerly Title I of ESEA (theElementary and Secondary Education Act of 1965). In essence a"weighting" factor is assigned to each Title I eligible studentcounted in a school district's average daily attendance so thateach Title I eligible student "counts" as more than one studentfor purposes of the average daily attendance formula describedabove. Ill.Rev.Stat. ch. 122, ¶ 18-8.1(n)

State Title I aid (and other forms of financial assistancesimilar in nature and purpose to State Title I aid) has beenreceived by Board since approximately 1968. Before the 1979-80school year, however, Board was not required to direct or"target" State Title I funds in relation to the enrollment ofState Title I eligible children. Rather those funds were includedas part of Board's general resource base and were expended withother resources (primarily local property taxes and Common SchoolFund State Aid) to fund system-wide educational programs andservices.

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 certainportion (the "targeted" portion) of State Title I aid received byBoard was to be allocated to schools in proportion to the numberof Title I eligible pupils enrolled, while the remainder (the"non-targeted" portion) was to be allocated to schools inproportion to their total student enrollment. Though theseproportions are subject to some minor fluctuation from year toyear, the targeted portion of State Title I aid is approximately55% 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 wasapplicable to one-third of the State Title I aid received thatyear. Targeting was applicable to two-thirds of State Title I aidreceived in school year 1980-81 and became fully applicable toall State Title I aid received in school year 1981-82 (and everysubsequent year).

To demonstrate compliance with the statutory targetingrequirements, Board annually submitted (and continues to submit)to the State Board of Education a plan indicating thedistribution of State Title I aid among all schools in thedistrict and the purposes for which such aid was to be used. Inother words, for each school receiving targeted State Title Iaid, Board indicated the amount of such aid and the programseligible to receive funding from such aid. All those programswere required to be "State Title I eligible programs," asdetermined by regulations promulgated by the State Board ofEducation.

In substantially all instances (except as described below forcertain desegregation programs initiated in school year 1981-82),the programs enumerated as "Title I eligible" were programspreviously established by Board and previously funded from itsgeneral resource base (which included local resources and CommonSchool Fund State Aid, including State Title I aid). They werenot, by and large, new programs established after theimplementation of the statutory targeting requirement. Statedanother way, for purposes of complying with the State Title Itargeting requirements, Board "attributed" certain of its ongoingeducational programs, previously funded from Board's generalresource base, as being funded from State Title I aid.10.

For school years 1979-80 and 1980-81 Board was able to complywith the statutory targeting requirement without any reallocationof State Title I aid among schools within the district. However,in school year 1981-82 Board was required to "reallocate"approximately $17 million of State Title I aid to ensure that asufficient amount was distributed to schools in proportion to thenumber of Title I eligible pupils enrolled (i.e., to ensure thatthe statutory targeting requirement was complied with). Thatreallocation resulted in the identification of new programs atthose schools that received the "supplementary allocation" ofState Title I aid.

Board Desegregation Expenditures

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

Project Code 946. As described above, a reallocation11. ofcertain amounts of State Title I aid received by Board for schoolyear 1981-82 caused certain schools to receive a larger amount ofState Title I funds than they had received in prior years.Schools that received the supplementary allocation of State TitleI aid were certainof the schools classified as racially isolated schools pursuantto the Plan.

Board used those "reallocated" State Title I funds in schoolyear 1981-82 to provide one source of funding for programsinitially implemented in that year as part of the Plan'sEducational Components at those racially isolated schools.12.Board was not required to use the supplemental allocation ofState Title I aid to fund desegregation purposes at theseschools. To the contrary, such funds could have been used toimplement any one or more of a myriad of "State Title I eligible"programs. However Board, in seeking to provide the necessaryfunds to implement at least a portion of the program elements ofthe Plan's Educational Components, chose to use the supplementalallocation of State Title I aid to fund certain of itsdesegregation programs.

Appropriations and expenditures attributable to thatsupplemental allocation of State Title I funds are designated byproject codes 946/947 (946 referring to employee salaries andrelated expenses and 947 referring to expenses for instructionalmaterials).

Board has continued, in schools years 1982-83 and 1983-84, touse that supplemental allocation of State Title I aid to fund aportion of the Plan's Educational Components. Again the decisionto use such funds to support desegregation programs is made byBoard, not as required by State law or regulation. As a result of(a) fluctuations in the amount of State appropriations foreducation, (b) changes in the Common School Fund State Aidformula and (c) changes in the number and attendance area of"Title I eligible" children, the total amount of the supplementalallocation has varied between $15 and $17 million per year (withthe amount allocated to each school also changing annually tosome extent).13.

Project Code 512. Desegregation expenditures attributable toProject Code 51214. are those that relate to components of thePlan initiated during and carried over from Access to Excellence— Board's prior desegregation program. When Access to Excellencewas initiated in school year 1978-79, expenditures made underthat program were designated as "512" in order to account forthem separately.

At its inception, Access to Excellence was a new program — anincrement to Board's previously existing level of appropriationsand expenditures. Moneys to fund the program were provided fromBoard's general resource base. Stated another way, the cost ofimplementing the desegregation programs initiated under Access toExcellence was met by an increase in Board's overall resourcebase, a reduction in expenditures for other programs or acombination of the two in school year 1978-79 — the year inwhich implementation was initiated.

When the "targeting requirements" for State Title I aid wereimplemented beginning in school year 1979-80, Board attributedthe funding for various of its previously established and alreadyexisting educational programs to State Title I aid. That was doneto demonstrate State Title I aid was in fact being used tosupport programs designed to meet the "educational needs ofdisadvantaged children." However the imposition of the targetingrequirement did not require that new programs be established.Instead Board wasrequired to demonstrate that it was providing a sufficient amountof educational services that the State Board of Educationconsidered as "Title I eligible." Among the programs included inthose attributable to "State Title I" aid were the desegregationprograms previously initiated under Access to Excellence.

But such attribution was no more than a record-keeping matter.It did not result in the implementation or initiation of newprograms. Board merely treated the Access to Excellence programsas being funded from State Title I aid, whereas it had previouslymade no effort to identify the source of funding for thisprogram. Again the attribution process was undertaken simply tocomply with the statutory targeting requirement established forState Title I aid.

In other words, State Title I aid funds attributed to (a)Project Code 512 desegregation programs and (b) other componentsof Board's general resource base are fungible. Board is simplyunder a statutory obligation to demonstrate it is providing therequisite amount of "State Title I funded" services at allschools in the system. It may comply with that requirement byattributing the cost of previously established programs to StateTitle I aid if those programs are considered by the State to beeligible.

Attribution of the funding for those desegregation programs(identified by Project Code 512) to State Title I aid hascontinued to the current school year. What is significant,however, is that even if those programs were hypotheticallyeliminated by Board, it is most likely that another previouslyestablished and funded program would then be attributed to StateTitle I aid, so that the funds presently budgeted for thosedesegregation programs would be available to Board for otherpurposes.

In summary, the only significance of the relationship between"Project Code 512" desegregation expenditures and the State TitleI program is that all desegregation appropriations designated as"512" appropriations are also considered as "State Title Ieligible" programs.

Summary

Project Code 512 and 946 expenditures are the onlydesegregation expenditures that are in some way "attributable" toState Title I aid, as described above. Such "attribution" of"512" expenditures to State Title I funds is simply an accountingor bookkeeping concept used in connection with the need todemonstrate compliance with the statutory targeting requirements.All desegregation expenditures (other than those funded fromfederal sources) are appropriately attributable to general Boardresources. (Board Ans. to U.S. Second Set of Interrogatories;Bacchus testimony)

Availability of Federal Funds To Implement the Chicago Desegregation Plan

Presently Available Funds

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

402. In each of fiscal years 1983 and 1984 Secretary allocated$24 million to provide grants through Title IV of the CivilRights Act of 1964, 42 U.S.C. § 2000c-2 — 2000c-4. (Opinion IIFinding of Fact No. 34, 567 F. Supp. at 277; Stip. 305)

403. There is no duty imposed on Secretary to provide fiscalyear 1984 Title IV funds for awards to continuing grantees undermulti-year grant contracts. (United States' Response to Board'sSecond Request to Admit No. 18; Stip. 305).

404. All multi-year awards of Title IV funds are subject toSecretary's regulations at 34 C.F.R. § 75.253, which statecontinuation of these grants is contingent upon Secretary'sfinding that sufficient program funds are available for thesegrants and that it is in the best interest of the United Statesto provide these continuation awards.

405. All fiscal year 1984 funds allocated for the Title IVprogram are currently unobligated. Secretary has notified allapplicants for (and his selected recipients of) 1984 Title IVfunds that all grant awards are contingent upon the outcome ofthe present litigation. (48 Fed.Reg. 56254, 56255, December 20,1983)

406. For fiscal year 1982 and subsequent years, the Departmentof Education determined the appropriation available under TitleIV of the Civil Rights Act of 1964 would be used fordesegregation assistance centers (DACs) and state educationagencies (SEAs), rather than direct grants to local educationagencies and training institutes. (Stip. 336)

407. In fiscal year 1983 Secretary provided no Title IV fundsdirectly to local educational agencies through the grant programauthorized at 42 U.S.C. § 2000c-4. (Harrison Dep. 26, 35-36;United States' Response to Board's First Request to Admit, No.15; Christensen testimony)

408. Many of the inservice and advisory programs in Board'sEducational Components were (with regard to federal fiscal year1983 funds) and are (with regard to federal fiscal year 1984funds) and are (with regard to federal fiscal year 1984 funds)eligible for Title IV race and national origin desegregationassistance through the program authorized at 42 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 andinservice training programs for Title IV funds where theycontribute, develop or disseminate information or skills thatmaterially assist in the effective implementation of adesegregation plan. Secretary has approved training, staffdevelopment and advisory services for Title IV funds where hefinds they are related to and materially assist in implementinga desegregation plan. (Board Ex. 72, Decision Memoranda Nos. 137,123, 114, 90, 49, 15; Board Ex. 72, Decision Memoranda Nos. 137,123, 114, 90, 49, 15; Board Ex. 75, Technical Review of Board's1981 Application for Title IV Assistance; Board Exs. 104, 105,106, Technical Review of Board's 1980 Application for Title IVAssistance)

410. Secretary has approved inservice training and advisoryactivities for Title IV funding in connection with programsdesigned to raise minority pupils' academic achievement wherethese programs were required educational remedies in acourt-approved desegregation plan and were supplemental to aschool district's pre-existing compensatory education or basicskills programs. (Harrison Dep. at 66)

411. Secretary has also approved for Title IV funding inservicetraining and advisory activities in connection with programsdesigned to raise minority pupils' academic achievement, wherethe inservice and advisory activities were specifically directedtoward educational techniques or instructional strategies toteach minority pupils effectively. (Harrison Dep. 65)

412. Secretary's 1981 Decision Memoranda, which constitute hisnotices of the amount and purposes for which Title IV grantawards were made to local educational agencies, accuratelydescribe the types of programs or activities for which Secretarymakes Title IV funds available. (Board Ex. 72)

413. In fiscal years 1980 and 1981 Board applied for andreceived Title IV grants in the amounts of $422,800 and $298,639,respectively. Secretary approved those grants, based upon theinservice and advisory programs described in Board'sapplications, for activities in connection with the planning andinitial implementation of Board's Educational Components. In bothfiscal years 1980 and 1981 Secretary found that all inservice andadvisory programs for which Board sought Title IV funds, asdescribed by Board in its applications, were activitiesauthorized for Title IV assistance. (Board Exs. 73, 74, Board's1980 and 1981 Applications for Title IV Application; Board Ex.75, Review of Board's 1981 Application for Title IV Assistance;Board Exs. 104, 105, 106, Review of Board's 1980 Application forTitle IV Assistance; 1980 Decision Memoranda No. 37)

414. In providing Title IV grants to local educational agenciesthrough the program authorized by 42 U.S.C. § 2000c-4, Secretaryhas not since 1978 held grant award competitions. (43 Fed.Reg.111676, 11677 and 11686, March 20, 1978; 43 Fed.Reg. 32372,32379, July 26, 1978). Instead Secretary has made Title IVassistance available at various times throughout each such fiscalyear on an application-by-application basis. (Id.;34 C.F.R. § 270.74(a)) Funding decisions with respect to individualapplications for Title IV funds were made as applications werereceived. (Id.; Harrison Dep. 61) No numerical criteria were usedto evaluate individual applications, and no rank ordering ofapplications was made. Secretary made only a recommendation toaccept or reject a particular application for Title IV funds onthe basis of the selection criteria specified at34 C.F.R. § 270.74(b)(1)-(5). (Id.; Harrison Dep. 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 relevantfactors" in awarding Title IV funds, 42 U.S.C. § 2000c-4. (Seee.g., 40 Fed.Reg. 12346, 12350, § 180.44, March 17, 1975)

416. Certain provisions of Secretary's Education DepartmentGeneral Administrative Regulations ("EDGAR"), including theprovisions at 34 C.F.R. § 75.105 that permit him to establishprogram priorities, competitive preferences and absolutepreferences, apply to the Title IV grant program. (34 C.F.R. § 75.1; 75.2, 270.02(e))

417. In each of fiscal years 1983 and 1984 Congressappropriated $28,765,000 for Secretary's Discretionary Fund,20 U.S.C. § 3851. (Stip. 309; United States' Response to Board'sFirst Request to Admit Nos. 29, 31; United States' Response toBoard's Second Request to Admit No. 23; P.L. 98-139, Title III,97 Stat. 888) Of this sum, Secretary is required to use$10,725,000 to fund the statutorily mandated programs specifiedin 20 U.S.C. § 3851(b). (United States' Response to Board'sSecond Request to Admit No. 11) Secretary was authorized infiscal years 1983 and 1984 to spend the remaining $18,040,000reserved for Secretary's Discretionary Fund for the purposes orprograms specified in 20 U.S.C. § 3851(a). (Christensentestimony)

418. That sum of $18,040,000 appropriated to Secretary'sDiscretionary Fund in fiscal year 1984 is currently unobligated.Secretary has notified all applicants for (and his selectedrecipients of) those funds that their availability to financegrant awards is contingent upon the outcome of the presentlitigation. (49 Fed.Reg. 7551, February 29, 1984; 49 Fed.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 awardsof discretionary funds are subject to Secretary's regulations at34 C.F.R. § 75.253, which state that continuation of these grantsis contingent upon Secretary's findings that program funds areavailable for these grants and that it is in the best interest ofthe United States to make these continuation awards. (Board Ex.107, exemplary grant contracts)

420. Secretary usually applies the EDGAR provisions relating tothe selection of projects for funding after a rank ordering ofall applications for grants from the Discretionary Fund. However,Secretary makes the final selection of those applications forfunding, and he may change the order in which applications willbe funded based upon any information in the application, anyother information he deems relevant to the program criteria andany priorities he has established to set aside or otherwise usehis discretionary funds. Moreover, Secretary's authority tocreate preferences and priorities subsumes those "competitive"selection procedures. He may use those preferences and prioritiesto create a program for a single applicant, reserve discretionarymoneys for that applicant without regard to the EDGAR competitiveselection 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 ofHouse or Senate Appropriations Committees "recommend" or"encourage" such financing. (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" forparticular program expenditures by language in AppropriationsCommittees' 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 $47,447,000generally to the Special Programs and Populations account tofinance the following subaccounts: Title IV; Follow Through;Territorial Teacher Training; Aid to the Virgin Islands; Women'sEducation Equity. (Stip. 304) Particular sums were notstatutorily earmarked or allocated for any of those subaccounts.(P.L. 98-139, Title III, 97 Stat. 888; United States' Response toBoard's Second Request to Admit No. 17; Christensen testimony)

424. Of the $47,447,000 appropriated in fiscal year 1984 forTitle IV and the four subaccounts in the Special Programs andPopulations account, $23,447,000 was allocated for those othersubaccounts and $24 million was allocated for the Title IVsubaccount. (Christensen testimony; Board Exs. 57 and 64)

425. Secretary could legally reprogram into the Title IVsubaccount $13,100,000 of the $23,447,000 allocated to the otherSpecial Programs and Populations subaccounts. After such areprogramming, Secretary could allocate the balance of theappropriation to the other Special Programs subaccount as hewould deem appropriate. That remaining balance would permitSecretary to fund each other Special Programs subaccount at ameaningful level. (Inference from Christensen testimony)

426. No statutes or administrative regulations addressSecretary's authority to reprogram funds between subaccounts inan appropriation account. Secretary's reprogramming policies orpractices derive from his relationship with congressionalappropriations committees and guidelines issued by thosecommittees. (Christensen testimony; Harrison Dep. 138-39)

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

428. Secretary acknowledges that, notwithstanding this policy,he has the legal authority to reprogram into the Title IVsubaccount fiscal year 1984 funds from the other Special Programsand Populations subaccounts after notifying the chairmen of thetwo congressional appropriations committees of his intention todo so. (Christensen testimony; Harrison Dep. at 138-139; BoardExs. 68, 69). Most significantly for current purposes, however,whether or not Secretary has such legal authority (or whether heviews the matter as controlled by practical considerations suchas his relationships with Congress), Secretary has made no effortwhatever to take steps to reprogram funds to honor the UnitedStates' obligations under Consent Decree § 15.1 — either byapplication to Congress or on his own, and either before or sincethe Court of Appeals' decision "provide[d] the Department anopportunity to fashion its proposed remedy for pastnon-compliance, as well as a chance to show that it intends tocomply in the future. . . ." 717 F.2d at 385.

429. From 1979 through the present, Secretary formallyrequested approval from congressional appropriations committeesfor sixteen reprogrammings of funds. Eleven of thesereprogramming requests were approved and five were disapproved.One of those reprogrammings was designedspecifically to provide for a single program (PUSH-EXCEL), whichwould have been eliminated absent the reprogramming. During thesame period Secretary also effected two reprogrammings withoutseeking congressional approval. (Christensen testimony; BoardExs. 68, 69)

430. As indicated in the grant contracts, all multi-year awardsof funds from any of the Special Programs and Populationssubaccounts 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 areavailable and that it is in the best interest of the UnitedStates to make such continuation awards. (Board Ex. 107,exemplary grant contracts)

431. All the $23,447,000 allocated to the four Special Programsand Populations subaccounts (not including Title IV) is currentlyunobligated. Secretary has notified all applicants for (and hisselected recipients of) those funds that their availability forgrant awards is contingent upon the outcome of the presentlitigation. (See e.g., 48 Fed.Reg. 53149, November 25, 1983; 48Fed.Reg. 55898, December 16, 1983)

432. Fiscal year 1982 funds not used by fiscal year 1982 FollowThrough and Title IV grantees ("carryover funds") aggregated$1,087,555, consisting of $440,300 in Follow Through funds and647,255 in Title IV funds. (United States Answer to Board'sSecond Set of Interrogatories, No. 11) Secretary had theauthority to allow the grantees to expend those funds in fiscalyear 1983, or to require that grantees return those funds to theUnited States. However, pursuant to Opinion II, those"carry-over" funds were applied by the original grantees tofiscal year 1983 programs. Accordingly an equal amount of fiscalyear 1983 funds has been set aside in the Department ofEducation's accounts. (Stip. 318) That $1,087,555 in carry-overfunds is available for expenditure in fiscal year 1984.

433. Board Ex. 88 was prepared by the United States. (UnitedStates Answer to Board's Second Set of Interrogatories, No. 9) Itsets forth the amount of funds from Department of Educationappropriations that lapsed in fiscal year 1981 and 1982. It alsoshows that $21,188,206 of non-desegregation funds from variousDepartment of Education appropriations would have lapsed infiscal year 1983, except that those funds were escrowed by thisCourt. (Stip. 315)

434. "Lapsed funds" are funds appropriated to variousnondesegregation programs of the Department of Education thathave not been obligated at the end of the fiscal year and thattherefore revert to the United States Treasury. Legislation wouldbe required to reallocate lapsing funds and make such fundslegally available for and provide them to Board. Secretary maynot provide such lapsed funds to any grantee withoutcongressional authorization. Such funds could be allocated toBoard for its desegregation activities through a congressionalreappropriation. (Stip. 314; Christensen testimony)

435. As represented in the Appendix to the President's Budgetfor fiscal year 1985, it is estimated that at the end of fiscalyear 1984 the following amounts of funds appropriated to theDepartment of Education will remain unobligated and otherwiselapse:

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

(Board Ex. 57)

436. Department of Education's Office for Civil Rights entersinto contracts with various organizations to provide technicalassistance to local educational agencies. That program isintended to assist local educational agencies in complying fullywith Title VI requirements. (S.Rep. No. 247, 98th Cong. 1st Sess.163-64 (1983)). It was created by the Office for Civil Rightspursuant to its authority to make any payments necessary to carryout 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'sSalaries and Expensesubaccount, Secretary has financed program administrationactivities, including policy analyses, special projects, advisorycommittee operations and program evaluation contracts. (Board Ex.57, Appendix to the Budget for Fiscal Year 1985, at I-I22)

438. This Court has not been advised by the United States as tothe amount, in funds or other property, currently withinSecretary's Salary and Expense subaccount, Office for Civilrights subaccount or Secretary's Gift and Bequest account.

Actions by the United States Affecting the Availability of Funds

439. As the following specific Findings in this sectionreflect, since the entry of Opinion II nearly a year ago — June30, 1983 — the United States has taken no action to providepresently available funds to Board. Rather it has engaged inconduct designed to render unavailable both existing funds andany future sources of funds that could be used for implementingBoard's Desegregation Plan. For over nine months (since the Courtof Appeals decided on September 9, 1983 the United States was indirect violation of its obligation under Consent Decree § 15.1)that course of conduct has been in direct contravention of theCourt of Appeals' granting the United States "an opportunity tofashion its proposed remedy for past non-compliance, as well asa chance to show that it intends to comply in thefuture. . . ." 717 F.2d at 385.

440. Secretary has failed or refused to provide to Board any ofthe previously restrained 1983 funds that became available fordistribution to grantees, including Board, pursuant to thisCourt's November 21, 1983 Order. (Motion of the United States toModify the June 30 Order and Supporting Memorandum, filedFebruary 2, 1984; Plan of the United States, filed November 10,1983).

441. No request whatever for funding for Title IV of the CivilRights Act of 1964 ("Title IV") was included in the Budget forthe Department of Education submitted and proposed by theExecutive Branch for federal fiscal year 1984 (the "President'sBudget"). (A2-15) (Stip. 302; Board Ex. 57)

442. From the available fiscal year 1984 funds appropriated forthe Title IV program, Secretary intends to provide no directgrants of Title IV funds to any local educational agency,including Board. (United States Response to Board's SecondRequest 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 toprovide desegregation assistance through Title IV in fiscal year1985. (Board Exs. 56 (at 107-108) and 57)

444. No request for funding the Women's Educational EquityProgram, the Follow Through Program, Aid to the Virgin Islands,and the Territorial Teacher Training Program (collectively "theother Special Programs") was included in the President's Budgetfor fiscal year 1984. (United States' Response to Board's SecondRequest to Admit, No. 16; Stip. 303) Those programs are thesubaccounts currently subject to Opinion II. (Christensentestimony)

445. Secretary does not intend to reprogram to the Title IVsubaccount any fiscal year 1984 funds appropriated for theDiscretionary Fund or allocated to the other Special Programs.Section 309 of the ECIA (enacted in 1981) had the effect oflimiting to $13,100,000 the amount of fiscal year 1984 funds theSecretary theoretically could reprogram to Title IV. There is nosuch limit for fiscal year 1985. (Stip. 313)

446. From the available fiscal year 1984 funds appropriated byCongress and allocated to the Special Programs and Populationssubaccounts, Secretary has not reprogrammed and does not intendto reprogram moneys into the Title IV subaccount. (Stip. 313)

447. Finding 429 reflects Secretary's prior efforts towardreprogrammings of funds. Secretary has never sought or requestedapproval from congressional appropriations committees for areprogramming of funds to subaccounts from which desegregationassistance could be made available to Board. (Christensentestimony)

448. As represented in the President's fiscal year 1985 Budget,the Executive Branch has requested Congress to appropriate nofunds in fiscal year 1985 to the Special Programs and Populationssubaccounts currently subject to Opinion II. (Board Ex. 56 at 77)

449. Secretary does not intend to distribute fiscal year 1984moneys from his Discretionary Fund to any local educationalagency for direct operating costs of a desegregation plan. (Stip.312)

450. Secretary does not intend to set aside federal fiscal year1984 Discretionary Fund moneys specifically to fund a portion ofBoard's desegregation program costs. However, Board may submit acompetitive application for a project that Secretary considerseligible under the Discretionary Fund. (United States' Responseto Board's Second Request to Admit, No. 27) Should such anapplication be favorably considered by the Department, it isunlikely that Board would receive an award of more than $75,000to $175,000. (Stip. 311)

451. Secretary intends in fiscal year 1984 to distribute allmoneys appropriated to the Discretionary Fund only for thestatutorily mandated programs specified at 20 U.S.C. § 3851(b) orto support projects or activities that Secretary determines willfurther a national educational priority or need. (Board Ex. 57;Justification of Appropriations Estimates for Fiscal Year 1984 at50; United States' Answer to Board's Fifth Set ofInterrogatories, No. 2; 49 Fed.Reg. 7546, February 29, 1984)Secretary will not provide from his Discretionary Fund a directgrant of financial assistance to a local educational agency,including Board, for the costs of implementing a desegregationplan. (United States' Answer to Board's Fifth Set ofInterrogatories, No. 5; Christensen testimony)

452. On February 29, 1984 Secretary promulgated proposedregulations establishing eligibility criteria for localeducational agency grants from the Discretionary Fund. (49Fed.Reg. 7546, February 29, 1984) As described in those proposedregulations, Secretary's policy is not to provide discretionaryfunds to meet "local needs." Secretary defines a program thatmeets a "local need" for purposes of awarding Discretionary Fundmoneys 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 moneyspursuant to 20 U.S.C. § 3851(a)(4) only to provide technicalassistance to a local educational agency. Applying thatregulatory policy, Secretary would find that the programs andprogram elements making up Board's educational components do notqualify for Discretionary Funds in fiscal year 1984 and in futurefiscal years. (United States' Answer to Board's Fifth Set ofInterrogatories, No. 5; Board Ex. 87)

453. Included in the President's fiscal year 1985 Budget is arequested appropriation of $43,224,000 for Secretary'sDiscretionary' Fund for fiscal year 1985. (Board Ex. 56,Justifications of Appropriations Estimates for Fiscal Year 1985at 77, 94; Board Ex. 57) Secretary intends to use $31,599,000 ofthat amount for the nonstatutorily mandated purposes or programsspecified 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 beenprovided by the United States to Board for the Plan. Nor has theUnited States sought, nor does it currently intend to seek,legislation to provide such funds to Board. (Stip. 316)

455. Secretary does not currently intend to take any steps toprovide to Board, for the purpose of financing its desegregationactivities, any fiscal year 1984 or later year funds thatotherwise will lapse in such years. (Stip. 317)

456. In addition the United States has not provided any of the"carryover funds" identified in Finding 432 to Board forimplementation of the Plan. Nor has theUnited States taken, nor does it currently intend to take, stepsto provide such funds to Board. (Motion of the United States toModify the June 30 Order, and supporting memorandum, filedFebruary 2, 1984; Stips. 318, 319)

457. Absent Opinion II, Secretary would have allowed thegrantees to expend the 1982 "carryover funds" in 1983 withoutsetting aside a corresponding amount of 1983 funds. (Id.)

458. In fiscal year 1984 the United States has not soughtauthorizing legislation or a specific appropriation to financeall or any part of Board's cost of implementing its desegregationplan. (Plan of the United States filed November 10, 1983: Reportof the United States filed July 14, 1983)

459. In the President's fiscal year 1985 Budget, the ExecutiveBranch did not propose authorizing legislation or a specificappropriation to finance all or any part of Board's cost ofimplementing its desegregation plan. To the contrary, in thatbudget the Executive Branch is seeking specific legislation tomake all funds appropriated to the Department of Educationunavailable for Board. (Board Ex. 57 at 1-124 § 309). Thatproposed legislation is intended to make all funds, other thanthose specifically appropriated for that purpose, unavailable toBoard for use in implementing its Desegregation Plan. Inclusionof that proposal within the 1985 Budget is consistent with thepolicy of the Executive Branch of the United States to denyfunding to Board for desegregation implementation. (Christensentestimony)

460. Secretary can include, in the President's budget requeststo Congress, budgetary line items that request Congress toprovide funds for particular purposes, activities or programsthat Secretary has not previously undertaken. Such a request forfunds is known as a "nonauthorized line item" or a "nonauthorizedprogram." It is Secretary's practice to transmit authorizinglegislation for such a line item simultaneously with theappropriation request. If Congress appropriates funds for andauthorizes the use of such a line item, Secretary is authorizedto spend funds for that purpose. (Christenen testimony; UnitedStates General Accounting Office, Principles of FederalAppropriations Law at 2-11, 2-12, 2-26, 2-27 (1983)

461. There is currently a line item (but without any authorizedamount) in the President's fiscal year 1985 Budget entitled"Chicago Desegregation Activities." As reflected in thePresident's fiscal year 1985 Budget, Secretary does not intend torequest that Congress provide any funds to this line item infiscal year 1985. (Board Ex. 57, Appendix to the Budget forfiscal year 1985 at I-I13; Board Ex. 64, 1985 President's Budgetat 2; Christensen testimony)

462. In the President's budget requests to Congress, Secretarycan include budgetary line items within grant programs or othertypes of accounts. Secretary may create such line items toindicate the basis for the appropriation amount requested and themanner in which he intends to allocate funds appropriated to thegrant program or account. (Christensen testimony; Board Ex. 56 at95-96; Board Ex. 58 at 48; Board Ex. 61 at 2, 3; Board Ex. 62 at2; United States General Accounting Office, Principles of FederalAppropriations Law at 2-11, 2-12, 2-26, 2-27, (1983)

463. In the President's fiscal 1985 budget, Secretary has notincluded any such line item in his Title IV, Secretary'sDiscretionary Fund or Departmental Management subaccounts thatwould allow him to reserve appropriated funds for Board'sdesegregation activities. (Christensen testimony; Board Exs. 56,57)

464. Federal fiscal year 1984 funds generally will not beexpended until the summer of 1984 and, with some exceptions, areprimarily for use in school year 1984-85. (Stip. 344)

465. In fiscal year 1984 there are minimal sources and amountsof funds available to the United States to provide desegregationassistance for Board. 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, theUnited States through Secretary has failed, and most recently hasrefused, to request from Congress in fiscal years 1982 through1985 sufficient funds to apply toward Board's desegregationneeds. It has not sought to establish funding sources thatspecifically recognize its Consent Decree obligations and are inaddition to those previously created by Congress fordesegregation assistance. It did not request sufficient fiscal1984 appropriations, and has not requested sufficient fiscal year1985 appropriations, to enable it to meet its Consent Decreeobligations, while simultaneously it has provided a significantamount of these funds to otherwise eligible applicants. On behalfof the United States, Secretary has deliberately reducedavailable funds and created competition between Board and otherapplicants for the funds from these pre-existing sources.

467. Such limited availability of fiscal year 1984 funds forprovision to Board pursuant to the Consent Decree is a directresult of the failures and refusals of the Executive Branch toseek funds for financing the Plan and, even worse, itsaffirmative efforts to render existing funds unavailable toBoard. Those actions, particularly since the Court of Appeals'affirmance of Opinion II's determination that the United Stateswas 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, fromthe first draft of the Yates Bill through the passage of theWeicker Amendment, the Executive Branch intentionally sought tosecure passage of legislation that would have earmarked the fundsrestrained by Opinion II (a restraint upheld by the Court ofAppeals, 717 F.2d at 385) to render them unavailable to Board.

502. On August 13, 1983 the President vetoed H.J.Res. 338, abill sponsored by Representative Yates, the only substantiveprovision of which was a $20 million appropriation to enableSecretary to comply with the Consent Decree. (Stip. 320)

503. Both the message of the President accompanying that veto(Board Ex. 78) and the subsequent statement of Secretary ofEducation Terrel Bell (Board Ex. 79) express the official policyof the Executive Branch, including the Department of Education,to take actions designed specifically to render funds fordesegregation assistance unavailable for Board. (Chambers Dep.57-58, 69; Christensen testimony)

504. On or about September 21, 1983, during the mark-up in theHouse Appropriations Committee of H.J. Res. 367 (a continuingresolution designed to provide temporary funding in federalfiscal year 1984 for several federal departments), RepresentativeYates added Section 111 to the proposed legislation. During thesame mark-up Representative Conte added Section 112 to theproposed legislation, a provision intended to "earmark" fundsthat had been previously restrained by order of this Court and toprovide such funds could be received only by grantees other thanBoard. Representative Conte's amendment was adopted by theAppropriations Committee. (Stip. 321)

505. Representative Conte's "earmarking" proposal was supportedby the Executive Branch. It was intended to render the fundspreviously restrained by this Court unavailable to Board.Representative Conte's amendment was not adopted by the fullHouse. (Christensen testimony; Chambers Dep. testimony; BoardExs. 78-87 and 89.)

506. On or about September 22, 1983 the House leadershipannounced that H.J.Res. 367 was overburdened with amendments andwould be redrafted. That redraft was H.J.Res. 368 (anothercontinuing resolution), which contained RepresentativeYates' Section 111 but did not contain Representative Conte'sSection 112. (Stip. 322)

507. During Congressional consideration of H.J.Res. 368,Executive Branch officials prepared an alternative to Section 111in an attempt to secure legislation that would release therestrained funds to grantees other than Board only under certainconditions. Their proposed substitute language (Board Ex. 80) wasgiven by Executive Branch officials to staff members of the Houseand Senate Appropriations Committees for inclusion in H.J.Res.368 as a substitute for Rep. Yates' Section 111. That proposedlanguage would have established a contingency fund to satisfy anyfinal court order against the United States resulting from thislitigation and would have made all other fiscal year 1983 fundsunavailable for this purpose. (Stip. 323; Chambers Dep. 49-50,60-61) It was prepared by the Department on its own initiativeand was given to the respective appropriations committees (afterRep. Conte's earmarking proposal was defeated) as theDepartment's "preferred" substitute for Representative Yates'Section 111. (Chambers Dep. 61-62)

508. On September 29, 1983 Secretary Bell testified before theSubcommittee on Education, Arts and the Humanities of the SenateLabor and Human Resources Committee. His testimony included astatement that the Office of Management and Budget had the daybefore cleared the substitute language referred to in Finding507, thus indicating official Executive Branch approval of thesubstitute. (Stip. 324; Chambers Dep. 65-66, 69, 79-81, 131)

509. Before the Congress Executive Branch officials supportedthe Executive Branch alternative to the Yates Bill (Stip. 330)and officially opposed the enactment of the Yates Bill. (ChambersDep. 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 million to enable Secretary to comply with the ConsentDecree). (P.L. 98-107) Unlike H.J.Res. 338, sponsored byRepresentative Yates, which had been a free-standing bill dealingonly with funding Board's Plan to the extent of $20 million (sothat the President could and did veto the measure withoutaffecting other legislation), H.J.Res. 368 covered a host oftemporary funding items of an emergency nature, so that a vetowould have impacted the operations of many other federaldepartments. Consequently the President's signing of H.J.Res. 368did not at all indicate the Executive Branch had altered itsopposition to providing any funds to Board to honor the UnitedStates' obligations under the Consent Decree.

511. On the contrary, as the following Findings reflect, afterthe Yates Bill thus became law the Executive Branch continued itsefforts to secure passage of a statute specifically designed torender unavailable to Board any funds other than thoseappropriated for it by the Yates Bill. Those efforts clearlyrepresented a violation of the United States' duties underSection 15.1 as declared by the Court of Appeals.

512. H.R.3913, the Labor, Health and Human Services andEducation Appropriations Bill for fiscal year 1984, wasconsidered in the Senate October 4, 1983. During Senateconsideration Senator Weicker proposed first his original andthen his modified amendment (Sec. 308) to H.R.3913. On October 4,1983, but sometime before the introduction of Senator Weicker'sproposals, a staff member of the Senate Appropriations Committeerequested technical assistance from the Department of Educationin preparing legislative language to ensure that funds, otherthan those appropriated in Section 111 of P.L. 98-107, would notbe available to fund the Consent Decree. In response to thatrequest the Department of Education prepared and transmitted twoalternatives to the staff member (Board Ex. 82), the second ofwhich alternatives was proposed by Senator Weicker as amendmentnumber 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 was later withdrawn and the language of the first alternative(which became Section 309 of P.L. 98-139) was adopted by theSenate later the same day. As enacted, the Weicker Amendmentreads:

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 1983funds in the "Special Programs" account. Cong.Rec. H7973. OnOctober 5, 1983 Representative Conte described that amendment asbeing the one he had proposed in conjunction with H.J.Res. 367but stated that he was not going to propose it "[B]ecause theSenate added an amendment dealing with this subject during theirfloor consideration of [H.R.3913] . . ." (H8017). (Stip. 327)

514. As already found, the Department of Education (throughSteven Winnick, Esq. of its Office of General Counsel, and itsDirector of Budget Services) prepared and conveyed the languageoriginally proposed by Senator Weicker. (Chambers Dep. 66-69;Christensen testimony) It specifically designed that language torender all restrained fiscal year 1983 and 1984 funds unavailableto Board to finance its desegregation activities. (Chambers Dep.69; Christensen testimony)

515. On or about October 13, 1983, in response to requests fortechnical assistance from staff members of the HouseAppropriations Committee who were preparing for the conferencecommittee on H.R.3913, the Department of Education preparedsubstitute bill language for Senator Weicker's Amendment number2277, possible report language for inclusion in the ConferenceCommittee Report and a paper entitled "Talking Points," and ittransmitted 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 werespecifically drafted and intended by the Department to renderfunds unavailable for implementing Board's Desegregation Plan.(Chambers Dep. 72-73, 76-79, 85-87) During the current hearingsbefore this Court, representatives of the Department of Educationsought to portray themselves as wholly passive respondents torequests from Congress for technical assistance, implicating nosubstantive or policy judgments by the Department. That may wellbe the usual function of the Department in connection withpossible legislation, but in light of the foregoing Findings itis totally disingenuous in the present instance. This Court doesnot credit such testimony and finds it additional confirmation ofthe findings made elsewhere as to the bad faith of the UnitedStates.

517. In the October 20, 1983 Congressional Record there is anextension of remarks by Representative Conte concerning themodified Weicker Amendment (H8470). That statement was adapted byRepresentative Conte's staff from the materials supplied by theDepartment of Education referred to in Findings 514-16 and thatconstitute Board Exs. 83-85. (Stip. 329)

518. In taking the actions described in Findings 502 through517, the Executive Branch and the Department of Education did notgive heed to the United States' Consent Decree obligations, nordid they inform congressional 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 Departmentof Education actively supported and sought passage of legislationspecifically designed to render funds unavailable to Board. It isa policy and priority of the Executive Branch and the Departmentof Education to make all funds appropriated to the Departmentunavailable to Board for implementing its Plan and to opposespecific congressional appropriations of funds to be used tocomply with the Consent Decree. Moreover, it has been andcontinues 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 andthe Court of Appeals decided the appeal from Opinion II onSeptember 9, 1983, it has been a policy of the Executive Branchof the United States, including the Department of Education, todisable itself from complying (a) with Opinion II and subsequentorders and (b) with the Court of Appeals' opinion, and to denyfunding to Board for desegregation implementation. Those actionsconstitute more than a failure to "make every good faith effort"to meet the United States' Consent Decree obligation. Rather theUnited States has actively and willfully ignored the orders ofthis Court and the Court of Appeals and has continued its badfaith efforts to evade and undermine its obligations underSection 15.1, by engaging in conduct intended specifically torender existing and future sources of funds unavailable fordesegregation assistance to Board. These findings are compelledby the earlier Findings and by the later Findings in thissection.

602. As early as the filing of its July 15, 1983 Report, theUnited States clearly indicated that despite its previouslyadjudicated liability it had no intention of altering its priorcourse of bad faith conduct. That Report was supposed to discussthe specific steps to be included in the United States' programof compliance with Opinion II. Instead the United States simplyreiterated its prior position it would not treat any funds overwhich Secretary had control as "available," nor would it seeklegislative or other action to render other funds available toBoard. That Report alone reflected continuing bad faith on thepart of the United States, as well as a willful violation of theConsent Decree and Orders of this Court.

603. Following the Court of Appeals' September 9, 1983 vacationof this Court's previously-ordered remedies, explicitly stated bythe Court of Appeals as intended to give the United States anopportunity to "fashion its own proposed remedy," the UnitedStates submitted the "Plan of the United States for Supportingthe Desegregation Plan of Board of Education of the City ofChicago." That Plan, filed November 10, 1983, sets forth all theactions the United States intends to take in school year 1983-84and for the duration of the Consent Decree to comply with itsobligations under Section 15.1. (Stip. 331-32) Althoughpurporting to satisfy the Seventh Circuit's mandate, the Planasserted the United States had no further obligations for fiscalyear 1983, or for future fiscal years, beyond the $20 millionthat had been appropriated by Congress as part of a continuingjoint resolution covering a number of needed fundingappropriations (after the President had vetoed an earlierfree-standing provision sponsored by Representative Yates thatwould have budgeted funds only for Board and its Plan). Indeedthe United States' "Plan" contained no suggestions for remedyingthe United States' past violations or for meeting its present andfuture obligations under the Consent Decree, but instead itpresented both old and new excuses for the failure to take suchactions. It reiterated arguments that had previously beenrejected by this Court and the Court of Appeals. Rather than theUnited States availing itself of the opportunity presented by theCourt of Appeals or acting in good faith pursuant to the ConsentDecree, its "Plan" and its actions taken (and not taken) pursuantto its provisions constitute bad faith conduct of the UnitedStates. Both the Plan and such action and inactionalso constitute willful violations of the Consent Decree andorders of this Court and the Court of Appeals.

604. Although the United States received the original versionof Board Ex. 28 on or about September 16, 1983, that extensivedocument was not reviewed by any officials of the Department ofEducation, other than counsel, until approximately March 1, 1984— when these hearings forced such a review. (Stip. 301; Fagantestimony; Christensen testimony; Chambers Dep.)

605. All the conduct of the United States detailed under thecaption "Actions by the United States Affecting the Availabilityof Funds" (Findings 439-67), including its promulgation ofregulations and proposals of legislation intended to render fundsunavailable to Board for use in implementing the Plan, togetherwith its prior failure and present intention not to (a) provideBoard with any of the presently or previously restrained funds,(b) seek reappropriation of any excess or "lapsing" funds, (c)seek to identify and provide any other available funds or (d)seek to render sufficient funds available through appropriationrequests and other legislative activities, constitutes both badfaith conduct and willful violations of the Consent Decree andorders of this Court and the Court of Appeals.

606. All the conduct of the United States detailed under thecaption "Actions with Respect to the Yates and Weicker Bills"(Findings 501-518), specifically designed to render presentlyavailable funds unavailable, also constitutes both bad faith andwillful violations of the Consent Decree and orders of this Courtand the Court of Appeals.

607. All the conduct of the United States referred to inFindings 401-606 was intentionally undertaken by, at thedirection of, or with the knowledge of, Secretary of EducationTerrel R. Bell, other policy level officials in the Department ofEducation (including Sally Christiansen, Gary Bauer, HunterHarrison and Steven Winnick) and other Departments of theExecutive Branch. Each of those officials was aware of theConsent Decree and orders of this Court and the Court of Appealswhen engaging in that conduct.

608. In sum, despite prior findings and opinions of this Courtand of the Seventh Circuit, the United States has shown nointention of complying with Section 15.1 of the Consent Decree.It has refused to make any serious effort to address itsobligations and has persisted in its efforts to ensure that fundsadequate for financing the Plan are unavailable to Board.

609. All the actions of the United States since Opinion II (andparticularly since the Court of Appeals' September 9 opinion)wholly fail to meet its obligation to "make every good faitheffort" and constitute affirmative bad faith conduct and willfulviolations of the Consent Decree and orders of this Court and theCourt of Appeals.

610. Careful review of the entire record demonstrates thatBoard has proved the factual matters reflected in Findings 401 to609 not only by the required preponderance of the evidence, butalso by clear and convincing evidence.

CONCLUSIONS OF LAW ("Conclusions")

Law of the Case

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).

2. Where there are alternative factual or legal grounds for aDistrict Court decision, and the Court of Appeals considers onlyone, the other grounds are not deemed "decided" (accepted orrejected by implication) for purposes of the second branch of lawof the case. Those alternative grounds do remain the law of thecase in the District Court under the first branch of thedoctrine. See, e.g., Munoz v. County of Imperial, 667 F.2d 811,817 (9th Cir. 1982); Johnson v. Board of Education of the City ofChicago, 664 F.2d 1069 (7th Cir. 1981), vacated, 457 U.S. 52, 102S.Ct. 2223, 72 L.Ed.2d 668 (1982); 1B Moore's ¶ 0.404[4.-3].

3. Because the following propositions were finally andexplicitly decided by our Court of Appeals, under the mandateaspect of the law of the case, they are not subject toreexamination 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).

4. This Court's finding that Board has made every good faitheffort to find and provide every available form of financialresources was not challenged on appeal (id. at 380 n. 1) and alsomust be considered conclusively decided. Raxton Corp. v. AnaniaAssociates, Inc., 668 F.2d 622, 624 (1st Cir. 1982). Even werethat not so, these Findings and Conclusions have reconfirmedBoard'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. Opinion III contains no explicit or implicit determinationor rejection of the propriety of this Court's detailed exposition(in Opinion II App.A Par. 1, 567 F. Supp. at 286-88) of the UnitedStates' obligations under Section 15.1, including, wherenecessary, legislative initiatives. Also none of the particularremedial obligations of the United States defined by this Court(id. Par. 2, 567 F. Supp. at 288) were rejected or considered byOpinion III other than as premature. Rather our Court of Appealsvacated the remedial portions of this Court's Order on thealternative and independent grounds that the United States shouldbe given an opportunity voluntarily "to fashion its proposedremedy for past noncompliance, as well as a chance to show thatit intends to comply in the future. . . ." Through the UnitedStates has now been given ample opportunity, it has failed —really refused — to propose even a remotely acceptable "remedy"(Finding 603). To the extent the United States is now in aposition identical to its earlier position, except for havingbeen given an appropriate opportunity to comply voluntarily withits obligation and having failed and refused to do so, thisCourt's earlier conclusions as to the scope of the obligationscontained in Section 15.1 and the nature of the United States'remedial obligations remain valid. To that extent, thoseconclusions are the law of the case.

7. In particular this Court has reviewed each of its Opinion IIFindings of Fact and Conclusions of Law. That portion ofConclusion 4 that found Section 15.1 unambiguous was a "harmlesserror" (717 F.2d at 382), and this Court's Findings andConclusions as to the amount adequate for implementation of thePlan and the remedial obligations of the United States werevacated as premature. With those exceptions, each of the OpinionII Findings and Conclusions remains the law of the case.Moreover, now that the remedial issues are no longer premature,the Conclusions concerning remedies are also law of the case.

8. Many of the Opinion II Findings and Conclusions arefirst-branch (prudential) law of the case. Thus this Court is notbarred from re-examining such earlier determinations,particularly those with regard to the scope of the obligationscontained in Section 15.1 and the nature of the United States'remedial obligations. Considering the importance of the issuespresented in this case, the presentation of further extensiveevidence and certain legislative developments discussed below,this Court has re-examined each of its Opinion II Findings andConclusions, as well as its contemporaneous Order. Uponexamination of the additional evidence and legislativedevelopments, this Court concludes there are no compellingcircumstances requiring such reconsideration. Nonetheless, in theinterest of generating a self-contained document, new Findingsand Conclusions concerning many of the same issues have beenpresented in this opinion. That does not mean any failure torestate all the prior Findings and Conclusions should be taken asa disavowal. To the contrary, each prior Finding and Conclusion,except to the extent inconsistent with these Findings andConclusions, remains the opinion of this Court.

9. Two primary issues were not previously decided and were thefocus 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 todetermine and allocate the total cost of desegregation plans inmore typical desegregation cases has already been covered by theparties and this Court in this case. In particular, the followingcritical conclusions have previously been established:

(a) Board's obligation is explicitly defined by the Consent Decree: to develop 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.

11. In any determination and allocation of the appropriatelevel of funding for a desegregation plan, the costs of programsthat "materially aid the success of the overall desegregationeffort" are properly included. Arthur v. Nyquist, 712 F.2d 809,813 (2d Cir. 1983), cert. denied sub nom. Griffin v. Board ofEducation, ___ U.S. ___, 104 S.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 that excludes themere discharge of a school board's "general educationalresponsibilities," a line that "inevitably blurs," Arthur, 712F.2d at 813. In striking a balance, a district court should give"considerable deference to the good faith representations of theschool authorities." Id.; Liddell III, 731 F.2d at 1316. Suchdiscretion normally afforded a local board is particularlyappropriate in the circumstances presented in this 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).

12. It is of course proper for the United States to seek toassure that Board does not abuse its discretion by including inthe Plan any educational programs that are not properly linked todesegregation (as Arthur, 712 F.2d at 813 put it, they are "ameans of upgrading an educational system in ways only remotelyrelated to desegregation"). In the circumstances of this case,Arthur and Liddell teach the proper standard for determiningwhether the cost of any given program is appropriately includedin the amount "adequate for implementation of the Plan" iswhether the program is a reasonable exercise of Board'sdiscretion to adopt programs that materially aid theimplementation of the Plan developed pursuant to the ConsentDecree and approved by the United States and this Court. Absolutedollar precision is not required when determining the costs of adesegregation plan, particularly when (as here) the local boardhas been acting in good faith. Arthur, 712 F.2d at 814-15.

13. By its agreement in Section 15.1 to attempt to providefinancial resources "adequate for implementation of thedesegregation plan," the United States clearly agreed to help payfor the Plan that was required by, and has since been developedand implemented pursuant to, the Consent Decree. That agreementincludes helping to pay for a plan (like the current one) thatincludes educational components in magnet schools (Section 4.12),in desegregated schools (Section 10.1 and 10.4) and particularlyin racially isolated schools (Section 2), including the followingitems 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 theparties under Section 15.1 were to apply fully to the EducationalComponents described in various sections of the Consent Decree.As for the last clause, that specifically allows affordability tobe considered in meeting the Student Assignment objective of theConsent Decree (Section 2.1). Indeed, its use of the singularform "objective" in referring to Section 2.1 reinforces thenormal reading that the same clause does not apply to the otherobjectives stated in Section 2, including particularly Section2.2 relating to the Educational Components. If any furtherconfirmation were required, Section 7 of the Consent Decreecontains a specific reference to "the objective [again used inthe singular] stated in Sec. 2.2" — demonstrating once again theConsent Decree's draftsmen were meticulous in their distinctionsand cross-references. Thus the Consent Decree's clear andunambiguous language requires no resort to extrinsic evidence onthis 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 Section2.2. Affordability is a legitimate consideration ofpracticability only with respect to Section 2.1, which requiresthat the Plan seek to establish the greatest "practicable" numberof stably desegregated schools. But that is really not critical.Even were it otherwise, to the extent affordability mayrealistically limit the type of plan that can be developed andimplemented, it does not qualify the obligation of the UnitedStates any more than it qualifies Board's obligation. Both areobligated by Section 15.1 to attempt to share the costs ofprograms that it is determined will materially aid inimplementing the Plan.

16. In response to the Arthur-Liddell analysis, the UnitedStates offers 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 andadheres to the Arthur-Liddell standards.

Standards for Determining the Share the United States Is Obligated To Attempt To Provide of the Amount "Adequate for Implementation of the Plan"

17. Section 15.1 by its terms is addressed equally to bothparties and creates a mutual obligation to attempt to find andprovide the total amount of financing adequate for the Plan. Itsays "each party" is to address the search and provision of funds"adequate for implementation of the desegregation plan," a phrasethat applies to the total amount of financing necessary — notsome severable proportion of that total amount.

18. Circumstances surrounding entry of the Consent Decreefurther demonstrate a mutual obligation, not a divisible one, wascontemplated. Its history reveals the parties had a common andoverriding goal of assuring that an effective desegregation planwas developed and implemented in Chicago (see Findings 104,108-10 and extrinsic evidence discussed in Opinion II Conclusion4, 567 F. Supp. at 282). That joint purpose was reflected inSection 15.1, where each party agreed to do everything possibleto find the necessary financing. As stated in Finding 108, theDecree "represents the only instance in which a major urbanschool system has agreed, without any litigation or determinationof liability issues, to develop and implement a systemwidedesegregation plan under court supervision". That Decreecontemplated, and the Plan has manifested, the extensive use ofexpensive compensatory educational remedies to alleviate theeffects of past discrimination. In 1980, as now, Board was facedwith massive financial deficits, and the joint funding provisionof the Consent Decree also reflected recognition that Board'sfinances were such that it could not voluntarily agree todevelop, or successfully implement, an effective desegregationplan of this type unless the federal government agreed to sharethe financial burdens.

19. Because they are in fact contracts (with the addedimprimatur of court approval), consent decrees are construedaccording to precepts of contract construction. Opinion III, 717F.2d at 382 and cases cited. Board engages in extensive legalanalysis to urge on this Court the applicability of contractprinciples, based on the law of joint and several obligations orthe law of joint ventures. Those concepts are of course born ofsomewhat different relationships than are involved here, thoughthe United States does not really counter Board's arguments withcogent analysis. But it is not necessary to decide the questionshere as though they involved strict joint and several liabilityor a joint venture in the classic sense. As Finding 110 makesplain, whether Section 15.1 is looked at in its literal terms —which do not specifically limit the amount of the United States'financial commitment — or whether some notion of reasonableexpectations is applied to that commitment, there can be noquestion the United States' undertaking is broad enough toembrace the amount represented by Board's current request (asmodified by this opinion).

20. Some light is also cast by the equitable principles thatguide the fashioning and effectuating of desegregation decrees.Milliken v. Bradley, 433 U.S. 267, 97 S.Ct. 2749, 53 L.Ed.2d 745(1977). In that respect, allocating the costs of a desegregationplan is part of the remedial power of a district court, UnitedStates v. Board of School Commissioners 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"). Courtshave 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 (6th Cir. 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 courts have frequently considered theability of the parties to provide financing for the plans.Milliken II, 540 F.2d at 246; Liddell v. Board of Education ofthe City of St. Louis, 491 F. Supp. 351, 357 (E.D.Mo. 1980), aff'dand 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, thoseequitable approaches tend to fortify the determination reached inConclusion 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 theinclusion of Section 15.1 in the Consent Decree (Findings 103-10)demonstrates the United States' obligation was not limited orqualified by the prior existence or funding levels of ESAA.Instead Section 15.1 established a general obligation on the partof both parties, to be "interpreted and applied as appropriate inwhatever future circumstances might arise" (Finding 110).

23. This is the first occasion on which the parties and thisCourt have addressed the amount "adequate for implementation ofthe Desegregation Plan" (Section 15.1). As already stated, thatdetermination is whether the programs under considerationmaterially aid the success of the Plan. There is no estoppelagainst Board arising from any earlier statements predicated onthe limited funds then currently available to it.

24. Board is not required to exhaust all its availableresources for implementation of the Plan before the United Statesbecomes obligated to find and provide resources for the Plan(Opinion II Conclusion 7, 567 F. Supp. at 283). Although Board hassubstantial general revenues (from local taxes and from generalstate aid, including State Title I aid), and those funds are notprecluded by State law from being used for desegregationexpenses, Board is not obligated to destroy the basic educationalfunction of the school system by diverting funds needed and usedfor such purposes. Nor is Board required, as the United Statessuggests, always to divert any further increment of such generalrevenues from other educational programs to pay Plan costs. Sucha standard — forcing the robbing of Peter to pay Paul — wouldrender the United States' financial obligations meaningless.

25. United States argues if a program is "necessary" for thePlan, then Board has an obligation to shift funds from itsgeneral resources to pay for the program, and if Board does notdo so, then by definition the program has been shown not to be"necessary." In either event, the asserted result is that theUnited States does not have to pay for the item. Like others ofthe United States' contentions, that one is legally bankrupt. Ofcourse, a program may materially aid success of the Plan, or benecessary for the Plan, even though Board has not had fundsavailable to be diverted from its basic educational system to payfor the program.

26. Board is not "master of its own fate" and depends onsubstantial general state and federal revenues to meet all itsobligations. Requiring Board to consider all general state andfederal revenues received by it as "available" for funding thePlan must be rejected, for it would require Board to superimposea financed Plan on a devastated school system. See, Milliken II,540 F.2d at 245-51. Any successful desegregation program,especially one containing educational components, presupposes afunctioning basic educational system. Courts that haveapportioned costs between local and state defendants have takencare to ensure there is no diminution in the quality of educationor in the allocation of existing state revenues — even staterevenues that are for compensatory education. Berry v. SchoolDistrict 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.2d227 (1983).

27. General funds received from either the State of Illinois orthe federal government must be considered part of Board's generalrevenues. Any expenditure of such funds for implementation of thePlan must be considered part of Board's contribution to financingthe Plan. See Liddell 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 ConsentDecree, and continues to receive such assistance today, undervarious federal funding programs unrelated to desegregation.Together those encompass the categorical federal educationalassistance that is available to all school districts in theUnited States, including Board, for essential educationalprograms, not for funding the incremental costs of desegregationplans. Those funds have been and continue to be received by Boardon the basis of criteria that are unrelated to and do not takeinto account either the Consent Decree or the costs ofimplementing the Plan.

29. Increases in general federal funding since September 1980,received by Board for purposes other than desegregation, neithereliminate nor derogate from the United States' obligation underSection 15.1. Neither party contemplated at the time of theDecree that federal ECIA Chapter I funds would be used to fulfillthe Section 15.1 obligations of the United States (Finding 357).Moreover, Board certainly did not agree to develop and implementa costly plan in exchange for the same level of federal fundingit would have received even had it not entered into the ConsentDecree or implemented a desegregation plan. Finally, the Court ofAppeals has already implicitly rejected such a contention(Conclusion 5(a)).

30. Other United States contentions that its obligations underSection 15.1 are somehow satisfied or eliminated by other federalfunding are equally untenable. It is unnecessary (as Board hasdone in its proposed Conclusions of Law) to dwell on the subjectat length, for Findings 350-68, Addendum A to Findings 301-76 andthe application of ordinary common sense demonstrate conclusivelythe poverty of the United States' position.

31. Section 15.1 imposes the same "good faith" standard on bothBoard and the United States. Board has been complying with thatstandard while the United States has not. That total disparity ofperformance reflects the height of irony in light of the factBoard and the United States have such differing abilities to findand provide funds and such differing competing obligations.

32. In Section 15.1 the United States made a firm commitment —it signed a contract — to make "every good faith effort to findand provide every available form of financial resources adequatefor implementation of the Plan." No "intended grantee" has acomparable claim to action on the part of the United States. Nonumber or form of Executive Branch "policy" decisions,"representations" or subsequent "commitments" can undo, overrideor diminish this contractual promise to Board — a promise thathas the extra force of embodiment in a consent decree.

33. In a sense the United States' various agreements as tofunding, dealt with in the foregoing conclusions, are variants onits most fundamental one: Its Section 15.1 promise is meaninglessand unenforceable, because it can define "every available form offinancial resources" as wholly empty by deliberately making allfinancial resources unavailable. No court is required to acceptthat distortion of contract law from any contracting party,whether sovereign or private litigant.

34. Had the United States not so ignored and subverted itsobligation under the Consent Decree, it would have retainedsubstantially greater discretion within the bounds of itscommitment than it now portrays itself as possessing. Section15.1 contemplated both (a) that the United States would havediscretion as to "how" it would meet its obligation and (b) thatit 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 (2d Cir. 1978).

35. Though the United States complains it is not being treatedequally, it is in fact only now beginning to be treated equally.To the extent the United States' present obligations may appearto be different than Board's, it is not because the standardbeing applied to the United States is any different from thatapplicable to Board. Rather it is because (a) the United Stateshas so egregiously violated that standard and (b) the very natureand identity of the parties makes their respective abilities "tofind and provide every available form of financial resources" sovery different.

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

36. Most of the programs for which Board now seeks funding aredesigned to implement the Educational Components portion of thePlan. In circumstances like those present in Chicago (seeFindings 145-61), educational components are a critical part ofa constitutional desegregation plan. Milliken II; Liddell III.Detrimental effects of years of segregation are not cured merelyby busing students to create integrated schools, Milliken II, 433U.S. at 283, 97 S.Ct. at 2758. Instead a desegregation plan mustinclude the additional programs necessary to provide equaleducational 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 sametypes of educational components contemplated by the ConsentDecree, and the same types of implementation programs for whichBoard 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.

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 and253) properly provides the desegregation remedy required by theConsent Decree, "materially aids the success of the overalldesegregation effort," and indeed is necessary for fullimplementation of the Plan. Accordingly the cost of each suchprogram is properly included in the total amount "adequate forimplementation of the desegregation plan" within the meaning ofSection 15.1. As reflected by Finding 265, the total amountadequate for implementation of the Plan for school year 1984-85is thus $171.631 million, and the share of that amount the UnitedStates is obligated to make every good faith effort to find andprovide pursuant 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 verifythe availability of certain funds, appropriated to the Departmentof Education, to be provided to Board for implementation of thePlan. This Court has now had the opportunity (see Opinion II,Conclusion 11, 567 F. Supp. at 284) to examine extensively theavailability of both 1983 and 1984 appropriations (for which therelevant statutes and regulations are nearly identical) and toreconsider the contentions of the United States with respect tothe availability of those funds. This Court hereby verifies theavailability of funds in the following conclusions.16.

39. Funds are "available" to the United States within themeaning of the Consent Decree where Congress has appropriatedthem to the Executive Branch for purposes consistent withfinancing Board's desegregation activities. To the extentCongress has given the Department of Education discretion toprovide particular funds to Board, the Consent Decree requiresthat the Executive Branch consider these funds "available."Furthermore, to the extent consistent with its statutoryauthority, the Executive Branch is required to interpret andconform its existing program regulations to meet its financialobligation to the Board under Section 15.1. Citizens for a BetterGovernment v. Gorsuch, 718 F.2d 1117 (D.C.Cir. 1983); Gautreauxv. Pierce, 690 F.2d 616 (7th Cir. 1982); Ferrell v. Pierce,560 F. Supp. 1344 (N.D.Ill. 1983).

40. As the following Conclusions reflect, fiscal year 1983funds and fiscal year 1984 funds were and currently are availableto the United States, within the meaning of Section 15.1, toassist Board in financing the Plan. This is wholly apart from,and in spite of, the efforts of the United States to render fundsunavailable — a matter dealt with in later Conclusions.

41. In fiscal years 1983 and 1984 Secretary was authorized todistribute direct grants through Title IV of the Civil Rights Actof 1964, 42 U.S.C. § 2000c, 2000c-4; Pub.L. 97-35, Title V, §509, 95 Stat. 443 (1981). As stated in Finding 402, Secretaryadministratively allocated $24 million to the Title IV program ineach of those years.

42. In fiscal years 1983 and 1984 Secretary was authorized togrant all or any part of those Title IV monies directly to localeducational agencies to finance the desegregation activitiesspecified in 42 U.S.C. § 2000c-4. In those years Board wasimplementing a court approved desegregation plan and qualified asa local educational agency eligible to receive direct Title IVrace and national origin desegregation 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,and permitted under his Title IV regulations(34 C.F.R. § 270.72), to provide 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 regulatorycriteria and are activities eligible for direct Title IV race ornational origin desegregation assistance:

(a) Effective Schools Program

(b) Racially Identifiable Schools Program

(c) Trainers Institute

(d) OEEO Systemwide Staff Development Program for Racially Identifiable Schools

(e) OEEO Systemwide 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 followingprograms designed to implement the Plan's Educational Componentsalso meet all applicable statutory and regulatory criteria andare activities eligible for direct Title IV race or nationalorigin 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 otherfactors as he finds relevant" in making Title IV grant awardspermits him to formulate additional selection criteria and,pursuant to such criteria, to establish classifications orpriorities for allocating available Title IV funds amongotherwise eligible applicants, and to reserve or set aside TitleIV funds for particular eligible applicants. Title IV's statutoryprovision that Secretary "consider" other applications for fundsdoes not subsume his authority referred to in the precedingsentence to establish priorities and to reserve or set asidefunds for particular applicants.

47. Secretary has deliberately flouted the United States'contractual obligations (one owed to no other eligible applicantfor Title IV funds) "to find and provide every available form offinancial resources" for implementation of the Plan. To honorthat obligation as he should have, Secretary was and is requiredto interpret, apply and, if necessary, modify his existing TitleIV and Educational Department General Administrative Regulations("EDGAR") to enable him to comply fully with the United States'financial commitment to Board under Section 15.1.

48. Secretary's EDGAR provisions apply to the Title IV programto the extent not expressly prohibited by Title IV's implementingregulations. Those implementing regulations, which permitSecretary to make Title IV grants at any time and on anapplication-by-application basis, do not require that he awardfunds only after a "competition" among all eligible applicantsfor those funds. 34 C.F.R. § 270.74(a).

49. EDGAR provisions requiring a competition among allapplications for a program's available funds, including awardsbased in part upon a rank ordering of all submitted applications,do not apply to grant awards through Title IV, which may be madeby Secretary at any time. 34 C.F.R. §§ 270.02(c) and (e),270.74(a). Secretary's authority to create preferences andpriorities permits him to reserve Title IV funds for oneapplicant 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,which permit him to consider as award criteria (a) theavailability of financial resources to a school district and (b)the nature and gravity of a school district's desegregationproblems, allow him to consider the Consent Decree in allocatingTitle IV funds among otherwise eligible applicants.

51. United States' legal obligation under Section 15.1, and thepolicy determinations the Consent Decree embodies, constitute"relevant factors" within the meaning of 42 U.S.C. § 2000c-4(b),the EDGAR provisions and the Title IV implementing regulations.Thus Secretary is authorized to reserve Title IV funds for Board,or otherwise to provide Title IV funds to Board, in preference toother eligible applicants for these funds.

52. All fiscal year 1984 funds allocated to the Title IVprogram are currently unobligated. No potential applicant, otherthan Board, has any legal entitlement to those Title IV funds. Tothe extent (if any) such potential applicants could have asserteddue process rights to "compete" under Secretary's regulations foravailable Title IV funds, Secretary could have obviated any suchproblem in fiscal years 1983 and 1984 by publishing a notice inthe Federal Register of Secretary's prospective intention toreserve certain Title IV 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 Title IV funds have no dueprocess right to "compete" for these funds in light ofSecretary's announcement to all applicants in the FederalRegister that any availability of those funds for a 1984 grantcompetition is contingent upon the outcome of the presentlitigation. 48 Fed.Reg. 56254, 86255 (Dec. 20, 1983).

53. In fiscal year 1983 Secretary was not legally obligated toprovide continuation awards to particular grantees, other thanBoard, from the Title IV program. It was within Secretary'sauthority to decline to finance continuation projects on theground that, as a result of his financial commitment to Board,there were no program funds "available" for continuation awardsor that it was in the United States' "best interest" to providethose funds to Board rather than to continuation projects.34 C.F.R. § 75.253(a). Secretary is not legally required to providecontinuation awards of Title IV funds in fiscal year 1984.

54. Congress did not in fiscal year 1984 direct that Title IVfunds could not be made available to provide grants to localeducational agencies. Certain committee report language describesSecretary's administrative practice of providing Title IV grantsto state educational agencies and desegregation assistancecenters. That language does not expressly prohibit Secretary fromproviding Title IV grants directly to local educational agenciesunder the program authorized at 42 U.S.C. § 2000c-4. It isinsufficient to repeal Secretary's statutory authority to providesuch grants to local educational agencies or to operate ascongressional ratification of Secretary's prior fundingpractices. TVA v. Hill, 437 U.S. 153, 189-93, 98 S.Ct. 2279,2299-2301, 57 L.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 alsoConclusion 63.

55. In sum as to Title IV funds, there were in fiscal year 1983and are in fiscal year 1984 no statutory, regulatory or otherlegal constraints that would preclude Secretary from providingall or part of the $24 million allocated to the Title IVsubaccount to Board for implementing the programs identified aseligible for direct Title IV assistance in Conclusions 44 and 45.All remaining fiscal year 1983 Title IV funds and all fiscal year1984 Title IV funds have been and currently are "available" tothe 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 amountannually to fund the statutorily mandated programs specified in20 U.S.C. § 3851(b). Secretary was authorized in each year tospend the remaining $18,040,000 reserved for the Secretary'sDiscretionary Fund for any of the purposes or programs specifiedin 20 U.S.C. § 3851(a), including research and demonstrationprojects related to the purposes of ECIA. Those purposes includeassisting local educational agencies in implementingdesegregation plans, in meeting the needs of children in schoolsundergoing desegregation and in addressing educational problemscaused by racial 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'seducational components are related to the purposes of ECIA,20 U.S.C. § 3832(3) and (7). Many of those programs could have beenfound by Secretary to qualify for discretionary funds under theplain meaning of 20 U.S.C. § 3851(a)(2) as demonstratingdesegregation techniques or educational remedies of national orgeneral significance.

58. Secretary is also authorized through the Discretionary Fundto provide grants to local educational agencies to assist them inimplementing programs under ECIA Chapter 2, including programs toassist local educational agencies in implementing desegregationplans, in meeting the needs of children in schools undergoingdesegregation and in addressing educational problems caused byracial isolation. 20 U.S.C. § 3851(a)(4); 20 U.S.C. § 3832(3) and(7). By its plain and unambiguous language,20 U.S.C. § 3851(a)(4) authorizes Secretary to provide direct grants ofdiscretionary funds to local educational agencies to supplementactivities or programs also eligible for financial assistancethrough the ECIA Chapter 2 state block grants, including20 U.S.C. § 3832(3) and (7). Nothing submitted by the United Stateshas shown a clearly expressed legislative intent contrary to theplain statutory language. American Tobacco Co. v. Patterson,456 U.S. 63, 75, 102 S.Ct. 1534, 1540, 71 L.Ed.2d 748 (1982);Consumer Product Safety Commission v. GTE Sylvania, Inc.,447 U.S. 102, 108, 100 S.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'seducational components are authorized for funding under ECIAChapter 2, 20 U.S.C. § 3832(3) and (7), and are eligible forfinancing through a direct grant of discretionary funds to Boardunder 20 U.S.C. § 3851(a)(4).

60. Secretary's proposed Discretionary Fund regulations, 49Fed.Reg. 7546 (February 29, 1984), state (a) discretionary fundsmay not be used to meet "local needs" and (b) under20 U.S.C. § 3851(a)(4) Secretary may only provide technical assistance tolocal educational agencies. Those are solely administrativeconstraints and do not implement statutorily imposed limitationson Secretary's use of discretionary funds. Given his statutoryauthority to provide discretionary funds to Board under20 U.S.C. § 3851(a)(2) and (4), Secretary is required to modify hisregulations to enable him to comply fully with the United States'financial commitment to Board under Section 15.1. Gautreaux;Gorsuch; Ferrell.

61. Secretary is authorized by statute to allocatediscretionary funds among potential applicants for those funds.It is within Secretary's regulatory authority to establishprogram priorities for the uses of those funds, to establishabsolute preferences that reserve all or part of the funds for aparticular priority, and to establish competitive preferences forapplications 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 absolutepreferences for a broad range of purposes, including recognitionof the United States' financial commitment to Board under theConsent Decree. Secretary is authorized to establish a priorityand a competitive or absolute preference in Board's favor, andthus specifically reserve all or part of non-statutorily mandatedDiscretionary Fund monies for the Plan. See, e.g., 48 Fed.Reg.50919 (November 4, 1983).

62. Secretary's EDGAR provisions relating to the selection ofprojects for funding after a rank ordering of all submittedapplications are usually used by Secretary to make grants fromthe Discretionary fund. However, Secretary makes the finalselection of applications for funding, and he is permitted by hisregulations to change the rank order in which applications wouldotherwise be selected for funding based upon any information inthe application, any other information he deems relevant to theprogram criteria, and any priorities he has established that setaside 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 permitshim to reserve discretionarymonies for one applicant and to award them to that applicantwithout regard to the EDGAR competitive selection criteria.34 C.F.R. § 75.105(c)(3).

63. In its fiscal year 1983 and 1984 appropriation actsCongress did not earmark or allocate particular sums for thenonmandated programs within Secretary's Discretionary Fund.Secretary is not legally bound by program allocations orbudgetary estimates not incorporated into the language of anappropriation act itself. Matter of LTV Aerospace Corp., 55Comp.Gen. 308, 319 (1975); Matter of Financial Assistance toIntervenors, 59 Comp.Gen. 228, 231 (1980); see also, BlackhawkHeating & Plumbing Co. v. United States, 622 F.2d 539, 547 n. 6,224 Ct.Cl. 111 (1980); United States General Accounting Office,Principles of Federal Appropriations Law 5-94 to 5-103 (1982).Notwithstanding language in congressional committee reportsrecommending or directing certain uses for Secretary'sDiscretionary Funds, Secretary did in fiscal year 1983, and doesin fiscal year 1984, have the authority to make suchdiscretionary funds available to Board to finance itsdesegregation activities.

64. All fiscal year 1984 funds reserved for the programs orpurposes specified in 20 U.S.C. § 3851(a) are currentlyobligated. No potential applicant, other than Board, has anylegal entitlement to those Discretionary Fund monies. To theextent (if any) such potential applicants could have asserted dueprocess rights to "compete" under Secretary's establishedpriorities for the use of his discretionary funds, Secretarycould have obviated any such problem in fiscal years 1983 and1984 by publishing a notice in the Federal Register of hisprospective intention to establish a priority or preferencereserving certain discretionary funds for Board pursuant to theUnited States' Consent Decree obligation.20 U.S.C. § 1232(b)(2)(A) and (B); 5 U.S.C. § 553(d)(1) and (3). In anyevent, potential applicants for fiscal year 1984 discretionaryfund monies have no due process right to "compete" for thosefunds in light of Secretary's announcements in the FederalRegister that any availability of those funds for 1984 grantcompetitions is contingent upon the outcome of the presentlitigation. 49 Fed.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 legallyobligated to provide monies from his discretionary fund forcontinuation awards to particular applicants other than Board. Itwas within Secretary's authority to decline to financecontinuation 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 UnitedStates' "best interest" to provide those funds to Board ratherthan to continuation projects. 34 C.F.R. § 75.253(a).

66. In sum as to Discretionary Funds, there were in fiscal year1983 and are in fiscal year 1984 no statutory, regulatory, orother legal constraints that would prevent Secretary fromproviding all or part of the nonstatutorily directed $18,040,000appropriated to the Discretionary Fund to Board for financing theprograms included in Board's educational components. All fiscalyear 1984 funds have been and currently are "available" to theUnited States within the meaning of Section 15.1.

67. Secretary is authorized by the Joint Funding SimplificationAct to modify his regulations where they impede financing aparticular project for which assistance is available from morethan one grant program. 31 U.S.C. § 7103(b)(3)-(4), 7103(c).Board has demonstrated it is eligible to receive desegregationassistance monies through the Title IV program and Secretary'sDiscretionary Fund. To the extent Secretary's regulations require"competition" for available Title IV or Discretionary Fundmonies, if at all, Secretary is authorized to suspend thoseregulations to permit his providing assistance for Board'sdesegregation activities. Secretary's regulations promulgatedpursuant to the Joint Funding Simplification Act also permit himto place in abeyance any applicable competitiveselection criteria where the project for which jointfinancing is sought is of the minimum quality to qualify forfunds. (34 C.F.R. § 75.219(b)); 34 C.F.R. § 75.221(c)(3) and (5).Conclusions 44, 45 and 59 establish that Board's programs meetthat minimum standard. Consistent with those joint fundingregulations and notwithstanding any Title IV or DiscretionaryFund regulations for selecting among applications for funds,Secretary is authorized to provide funds from both sourcesdirectly to Board to meet the United States' financial commitmentunder Section 15.1.

68. In fiscal years 1983 and 1984 Congress appropriated a lumpsum amount to finance Title IV and five other programs within theSpecial Programs and Populations account, and did not designateor earmark particular sums for each program. H.J.Res. 631, TitleIII; P-L 98-139, Title III, 98 Stat. 888. In both fiscal yearsSecretary administratively allocated $24 million to the Title IVprogram, leaving $28,058,000 in fiscal year 1983 funds and$23,447,000 in fiscal year 1984 funds available within the otherSpecial Programs subaccounts. Id.

69. Where several programs are financed through a lump sumpappropriation, an executive agency is authorized to "reprogram"or allocate the appropriations among the various programs as itdeems appropriate, notwithstanding program allocations orbudgetary estimates that appear in congressional reportsaccompanying the appropriations act. LTV Aerospace Corp., 55Comp.Gen. at 319; Matter of Newport News Shipbuilding and DryDock Co., 55 Comp.Gen. 812, 819-20 (1976); Blackhawk Heating &Plumbing Co., 622 F.2d at 547 n. 6; United States GeneralAccounting Office, Principles of Federal Appropriations Law 5-94to 5-103 (1982).

70. Secretary was authorized in fiscal year 1983 and isauthorized in fiscal year 1984 to reprogram available funds fromthe other Special Programs subaccounts into the Title IVsubaccount, to the extent the total amount distributed throughthe Title IV subaccount did not or does not exceed $37,100,000.P.L. 97-35, Title V § 509, 95 Stat. 443. Those reprogrammedSpecial Programs funds could thus be made available to Board tofinance any of the Title IV authorized programs or programelements described in Conclusions 44 and 45.

71. Secretary is also authorized in fiscal year 1984 toreprogram the fiscal year 1983 Special Programs carryover fundsinto the Title IV subaccount. Those carryover funds are currentlyunobligated. They may be used by Secretary for any purposes forwhich they were originally appropriated, and may be reprogrammed.20 U.S.C. § 1225. Those carryover funds were originallyappropriated in fiscal year 1883 and are not subject to the$37,100,000 limitation on Title IV expenditures in fiscal year1984.

72. Funds capable of being reprogrammed are available to meetthe United States' Consent Decree obligations notwithstandingcongressional disapproval of a reprogramming request. BlackhawkHeating; see Immigration and Naturalization Service v. Chadha,462 U.S. 919, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983).

73. All fiscal year 1984 funds allocated to those other SpecialPrograms subaccounts are currently unobligated. No potentialapplicant, other than Board, has any independent legalentitlement to those other Special Programs funds. To the extent(if any) such potential applicants could have asserted dueprocess rights to "compete" under Secretary's regulations foravailable Special Programs funds, Secretary could have obviatedany such problem in fiscal years 1983 and 1984 by publishing anotice in the Federal Register of Secretary's prospectiveintention to reprogram certain special Programs funds for Boardpursuant to 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). Inany event, potential applicants for fiscal year 1984 SpecialPrograms funds have no due process right to "compete" for thosefunds in light of Secretary's announcements in the FederalRegister that any availability of those funds for 1984 grantcompetitions 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 legallyobligated to provide continuation awards to particular grantees,other than Board, from the Special Programs subaccounts. It waswithin Secretary's authority to decline to finance allcontinuation 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 UnitedStates' "best interest" to provide those funds to Board ratherthan to continuation projects. 34 C.F.R. § 75.253(a).

75. In sum as to Special Programs funds and carryover funds,there were in fiscal year 1983 and are in fiscal year 1984 nostatutory, regulatory, or other legal constraints preventingSecretary from reprogramming such funds into the Title IVsubaccount. Those funds have been and currently are "available"to the United States within the meaning of Section 15.1.

76. To the extent fiscal year 1984 funds exist in the followingaccounts and subaccounts, have not been committed for otherpurposes and are not reasonably necessary for other Department ofEducation functions17., they too are "available" to Secretarywithin the meaning of Section 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 availablein all non-desegregation Department of Education accounts,$21,188,206 was unobligated and, absent this Court's September27, 1983 order, would have lapsed into the Treasury. Through acongressional reappropriation those funds could be made availableto Board in fiscal year 1984 to meet the United States' ConsentDecree obligation. 31 U.S.C. § 1301.

78. There are no statutory, regulatory or other legalconstraints preventing the Executive Branch from including, inthe President's budget requests to Congress, budgetary line itemsrequesting that Congress provide funds for particular purposes,activities or programs that Secretary has not previouslyundertaken. If Congress appropriated funds for such a line item,Secretary would be authorized to spend funds for that purpose.31 U.S.C. § 1301; United States General Accounting 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 budgetproposals, such a line item requesting that Congress appropriatefunds for Board's desegregation activities.

79. There are no statutory, regulatory or other legalconstraints preventing the Executive Branch from including in thePresident's budget request to Congress budgetary line itemswithin grant programs or other types of accounts. Secretary isauthorized to create such line items to indicate the basis forthe appropriation amount requested and the manner in which heintends to allocate funds appropriated to the grant program oraccount. If Congress appropriated funds for such a line item,Secretary would be authorized to reserve program funds solely forthe purpose of that line item. 31 U.S.C. § 1301; United StatesGeneral Accounting Office, Principles of Federal AppropriationsLaw at 2-11, 2-12, 2-26, 2-27 (1983). Secretary could include inhis fiscal year 1985 budget proposal, and could have included inprior budget proposals, such a line item in the Title IV,Discretionary Fund or perhaps other subaccounts that wouldfurther allow Secretary to reserve funds for provision to Board.

Meaning and Effect of the Yates Bill

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.

81. All statutory interpretation begins with the plainlanguage of the statute. American Tobacco Co. v. Patterson,456 U.S. 63, 102 S.Ct. 1534, 71 L.Ed.2d 748 (1982); Consumer ProductSafety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100S.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 aCongressional determination to appropriate $20 million to beprovided to Board pursuant to the Consent Decree, prompting theExecutive Branch to take the first step toward fulfilling itsobligations under Section 15.1. It reflects no congressionaldetermination 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 availabilityof other funds.

83. Legislative history of the Yates Bill supports that plainlanguage interpretation and further refutes any notion Congressintended to render all other funds unavailable to Board. It waspassed in its ultimate form only after alternatives that wouldhave had such an effect had been rejected. Evidence of rejectedamendments is an appropriate aid to a court considering questionsof legislative intent. Johnson v. Department of Treasury,700 F.2d 971, 974 (5th Cir. 1983).

84. In connection with the first draft of the Yates Bill,Congressman Conte submitted an "earmarking" proposal that wasintended to render the funds previously restrained by this Courtunavailable to Board. Under the Conte Amendment each of thecategories of restrained funds was to "be available only to carryout the programs and projects" authorized under the respectivelegislation creating the programs. H.J.Res. 367, § 112, ReportNo. 98-374, Part I (September 22, 1983). Although that amendmentpassed the Appropriations Committee, it was rejected by the fullHouse. Executive Branch officials later prepared an alternativeto Section 111 (the Yates Bill) of H.J.Res. 368 that would havereleased the restrained funds to grantees other than Board andwould have provided funds to Board only under certain conditions.That alternative, which was submitted to staff members of theHouse and Senate Appropriations Committees, was also ultimatelyrejected.

85. In light of his opposition to the Yates Bill and hisattempt to alter its effect, any remarks by Representative Conteare entitled to very 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, 47 L.Ed.2d 668 (1976). It is well establishedthat statements of opponents to a measure are poor evidence oflegislative intent. United States v. International Union ofOperating Engineers, 638 F.2d 1161, 1168 (9th Cir. 1979), cert.denied, 444 U.S. 1077, 100 S.Ct. 1026, 62 L.Ed.2d 760 (1980).

86. Subsequent as well as contemporaneous congressional actionalso supports the plain meaning interpretation of the Yates Bill.In its original version the Weicker Amendment, if constitutional,would have expressly achieved the precise result the UnitedStates now contends the Yates Bill had already achieved. It mustbe presumed Congress was aware of its own prior laws, UnitedStates v. Robinson, 359 F. Supp. 52, 58 (D.C.Fla. 1973), andCongress would not attempt to enact redundant and unnecessarylegislation. See, Jackson v. Kelly, 557 F.2d 735, 740 (10th Cir.1977). Because the original version of the Weicker Amendment wasintroduced October 4, 1983, a day before this Court found theUnited States' motion based on the Yates Bill to be premature,and because the Weicker Amendment was passed before this Courtultimately considered the Government's interpretation, it canhardly be said the Weicker Amendment was a congressional"response" to this Court's interpretation of the Yates Bill. Thusthe congressional intent underlying the Yates Bill is furtherconfirmed by this subsequent legislative activity.

87. In addition to being contrary to the plain language andlegislative history of the Yates Bill, the United States'proffered construction of that statute would also implicitlyreverse the prior determinations of this Court and our Court ofAppeals. Given the settled principle that a statute should beconstrued to avoid questions regarding its constitutionality,Crowell v. Benson, 285 U.S. 22, 62, 52 S.Ct. 285, 296, 76 L.Ed.598 (1932), and because the United States' interpretation wouldforce the confrontation and resolution of substantialconstitutional questions, additional reasons for rejecting theUnited States' suggested reading of the Yates Bill are present.

88. There is no indication Congress intended the Yates Bill tolimit the United States' obligation to Board to thearbitrarily-arrived-at sum of $20 million (there having been nocongressional consideration ofany of the matters dealt with at such length and painstakingly inthese Findings and Conclusions). This Court responded to theenactment of the Yates Bill by freeing up previously frozen fundspro tanto. By so doing it retained other funds as still"available" and thus lessened the degree of confrontation thatwould have been posed by a decision holding the United Statesliable for making all funds unavailable. Plain legislativelanguage cannot be overridden by the Executive Branch'sinterpretation of the Yates Bill and its assertion of generalprinciples of construction reflected in certain ComptrollerGeneral Opinions (which can only be aids to reasoning, not asubstitute for it).

Meaning and Effect of the Weicker Amendment

89. Section 309 of P.L. 98-139, 97 Stat. 895 (1983) (the"Weicker Amendment") 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 examinethe language of the legislation and ordinarily must regard thatlanguage as conclusive. On its face the language of the WeickerAmendment is not confusing or ambiguous. It is a simpledeclaration that no fiscal 1983 or 1984 funds appropriated to theDepartment of Education are to be restrained from distribution tograntees because of this Court's June 30 Order — in streetlanguage, it seeks to unfreeze previously frozen funds.19. It doesnot at all address the availability of funds to be providedpursuant to Section 15.1. It does not purport to limit "grantees"to some subset of persons or organizations eligible to receiveDepartment funding. Importantly (and obviously because ofconcerns as to constitutionality) it does provide the ConsentDecree is to remain in "full force and effect."

91. When a party argues a statute has a meaning that transcendsits explicit language, that party bears the burden of showingclear legislative intent that such a contrary meaning wasintended. Ford Motor Credit 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 contends the Weicker Amendment has somemeaning beyond the plain language of the statute, it bears thatburden. And because the doctrine disfavoring repeals byimplication has been held to apply "with full vigor" when asubsequent law is an appropriations measure, Committee forNuclear Responsibility, Inc. v. Seaborg, 463 F.2d 783, 785 (D.C.1971), the United States also faces that additional burden whenarguing the Weicker Amendment was intended substantively to alterthe statutory availability of funds to Board.

92. As the following Conclusions confirm, the legislativehistory of the Weicker Amendment does not conflict with the plainlanguage interpretation reflected in Conclusion 90. Instead thelegislative history reinforces that plain language, with itsnegation of any effort to alter the substantive rights as betweenthe United States and Board.

93. On October 4, 1983 (after the Yates Bill had become law onOctober 1) Senator Weicker offered the following provision as anAmendment to the Fiscal Year ("FY") 1984 Labor, Health and HumanServices 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 Board of Education of the City of Chicago.

Cong.Rec., S.13506.

94. That language, which would (if valid) have had an importantimpact on the rights that are at the core of this opinion, wasnever enacted into law. Instead Senator Weicker withdrew thatlanguage, and on October 4 the Senate passed the WeickerAmendment as quoted in Conclusion 89. Its sponsor, SenatorWeicker, explicitly stated his proposal "would not release theGovernment from any further liability" and "if additional fundsare 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 WeickerAmendment and its legislative history (Senator Weicker's ownstatement and the matters reflected in the following Conclusions)reflect (a) congressional ratification of the United States'Consent Decree obligation and (b) congressional recognition ofthis Court's power to determine the nature and scope of thatobligation.

95. On October 4 Representative Conte presented an amendment toH.R.3959 that contained the extremely specific language requiredfor earmarking. Cong.Rec., H.7973. Representative Conte'sproposed amendment, like the original version of the WeickerAmendment, clearly purported to render the restrained fundsunavailable to Board. Then on October 8, after the Senate hadrejected the original version of the Weicker Amendment (thusrejecting the equivalent of Congressman Conte's proposal) and hadadopted the Weicker Amendment in its ultimate form,Representative Conte decided not to propose his earmarkingamendment to the House.

96. On October 13 the FY 1983 Labor, Health and Human Servicesand Education Appropriations bill was considered in jointconference committee. Substitute bill language for the WeickerAmendment and possible report language for inclusion in theConference Committee Report were circulated by RepresentativeConte to members of the Committee. In conjunction with thosedocuments, a report called "Talking Points" was also transmittedto Committee members.

97. Those "Talking Points" urged that substitute language beinserted in the Weicker Amendment "because Section 308 literallyonly directs that the funds no longer be enjoined; it does notaddress whether the funds must be awarded to the recipientsselected by the Department of Education or to Chicago." Indeedthe same document said, "It is possible that the Court —consistent with the terms of Section 308 as currently written —could lift its injunction but then order all or part of the fundsto be awarded to Chicago." To respond to those perceived"shortcomings" Representative Conte's proposed substitute statuteread:

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 proposedlanguage for 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 WeickerAmendment passed the House in exactlythe same form that had been approved by the Senate.

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 a legislator is opposed to a measure, his remarks areentitled to very little weight. See, Ernst & Ernst, 425 U.S. at203-04 n. 24, 96 S.Ct. 1386 n. 24; International Union ofOperating Engineers, 638 F.2d at 1168. In view of RepresentativeConte's unsuccessful attempts to alter or oppose the Yates andWeicker Bills so as to render funds unavailable to Board, hisremarks are especially poor evidence of legislative intent. Bycontrast, the fact of those unsuccessful attempts is persuasiveconfirmatory evidence of legislative intent contrary to theabortive efforts.

99. In particular, no significance should be attached toRepresentative Conte's October 20 statement of his"understanding" of the Weicker Amendment. See, Cong.Rec., H.8740.That statement apparently was inserted into the CongressionalRecord by Representative Conte after the House had agreed toadopt the Senate's version of the Weicker Amendment. In view ofthat effort at revisionist history, coupled with the totalfailure of Representative Conte to obtain the modifications inCommittee that would have implemented Representative Conte's"understanding," it would be especially inappropriate now toimpute Representative Conte's "understanding" to other members ofCongress.

100. Evidence of the evolution of an enactment, of "the effectof amendments — whether accepted or rejected," is an importanttool for 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'smodification of the original October 4 version of the WeickerAmendment (which, if constitutional, would have rendered therestrained funds unavailable to Board), as well as the failure ofthe similar efforts, particularly by Representative Conte, tomodify the Weicker Amendment as passed by the Senate, stronglyconfirm the statute as passed was not intended to render therestrained funds wholly unavailable to Board.

101. Nothing daunted, the United States essays its own attemptat revisionist history. It urges this Court to construe theWeicker Amendment as if it had passed with its original proposedlanguage — or with language Representative Conte tried but failedto have enacted on several occasions. Because Congress did notaccede to the United States proposals to render the restrainedfunds unavailable to Board, however, this Court will notcircumvent the congressional rejection of these provisions, orpermit the United States to do so, by interpreting the WeickerAmendment as if those proposals had succeeded rather than failed.

102. In summary, the plain language of the Weicker Amendmentthus simply requires the Court to return control of therestrained funds to Secretary — to restore the pre-freeze statusquo — but does not dictate how any distribution of the fundsshould occur thereafter. And the foregoing examination of thelegislative history of the Weicker Amendment further supportsthis plain meaning interpretation of the statute. Essentially theWeicker Amendment reflects a legislative compromise in whichCongress specifically rejected any attempt to determine thesubstantive entitlement of Board or any other potential granteeto the restrained funds, leaving the Consent Decree in "fullforce and effect" and recognizing the determination was one thisCourt would be making. In effect the statute thus represented acongressional "separation of powers" determination that theExecutive Branch should regain control of the funds, after whichthe rights to ultimate distribution of the funds would simply bein 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 coveredby this Court's restraining order, thisCourt has concluded the restraining order can be terminated. Thatrenders moot any possible conflict between the Weicker Amendment(read properly in accordance with the foregoing Conclusions) andthe Constitution. It also responds to the salutary principle thatconstitutional questions should not be decided in advance of thenecessity to decide them. Rescue Army v. Municipal Court,331 U.S. 549, 67 S.Ct. 1409, 91 L.Ed. 1666 (1947). But because of thesharply different interpretation of the Weicker Amendment urgedby the United States (and the far more serious, substantial andcomplex questions of constitutionality that interpretation wouldraise), it remains important, for the reasons made plain in thefollowing Conclusions, to identify and discuss the relevantconstitutional questions and their significance for this opinion.

104. In general Congress has the authority to define by statutethe substantive law courts are required to apply. Accordinglywhen there has been a change in the applicable statutory lawafter judgment in the lower court but before an appellate orother final decision, the court must dispose of the caseaccording to law existing at the time of its decision. UnitedStates v. Schooner Peggy, 5 U.S. (1 Cranch) 103, 110, 2 L.Ed. 49(1801). That rule however is subject to the exception that courtswill refuse to apply the law in effect at the time a decision isrendered when to do so would result in "manifest injustice."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 theconsiderations relevant to the potential for manifest injusticeare "the nature and identity of the parties, . . . the nature oftheir rights and . . . the nature of the impact of the change inlaw upon those rights." Id. at 717, 94 S.Ct. at 2019.

105. Article III of the Constitution vests "the judicial powerof the United States" in federal courts. While Congress is vestedwith broad legislative powers under Article I, it can neither"exceed the limit of its own authority" nor "assume a power whichcould only be properly exercised by [courts] because it [is] inits nature clearly judicial." Kilbourn v. Thompson, 103 U.S. 168,192, 26 L.Ed. 377 (1880). Thus "the Constitution has investedCongress with no judicial powers; it cannot be doubted that alegislative direction to a court to find a judgment in a certainway would be little less than a judgment rendered directly byCongress." Nock v. United States, 2 Ct.Cl. 451, 457-58, (1867),quoted in United States v. Sioux Nation of Indians, 448 U.S. 371,398, 100 S.Ct. 2716, 2732, 65 L.Ed.2d 844 (1980). When Congressregulates functions of the judiciary in a pending case, it walksa line between judicial and legislative authority and exceedsthat line if it sets aside a judgment or orders retrial of apreviously adjudicated issue. Id. at 427-30, 100 S.Ct. at 2746-48(Rehnquist, J., dissenting). Consequently, legislation that"prescribed a rule of decision in a case pending before thecourts, and did so in a manner that required the courts to decidethe controversy in the Government's favor" would beunconstitutional. Id. at 404, 100 S.Ct. at 2735.

106. Separation of powers limits the exercise of judicial powerby Congress and reflects the Framers' concern for maintaining theindependence of the coordinate departments as a bulwark againsttyranny. United States v. Brown, 381 U.S. 437, 442-43, 85 S.Ct.1707, 1711-12, 14 L.Ed.2d 484 (1964); The Federalist Nos. 47 and48 (J. Madison).

107. If Congress does not purport to alter the governingprocedural and substantive law, Congress cannot force itsinterpretation of that law upon the federal courts in particularcases. L. Tribe, American Constitutional Law § 3-5, at 39 (1978).In terms of the separation of powers analysis recently applied bythe Supreme Court, such conduct would be an act by one branch ofgovernment that "prevents [another branch] from accomplishing itsconstitutionally assigned functions." Nixon v. Administrator ofGeneral Services, 433 U.S. 425, 443, 97 S.Ct. 2777, 2790, 53L.Ed.2d 867 (1977).

108. No congressional change in the law can retroactivelyeffect a judicial determination brought to final judgment beforethat change. Daylo v. Administrator of Veterans' Affairs,501 F.2d 811, 816 (D.C.Cir. 1974). To permit otherwise would destroythe finality and independence of the judicial action. Even whena judgment is not final, "the separation of powers bar a federalcourt from giving operational weight to a pronouncement byCongress . . . that what had theretofore been judicially declaredas 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 theintegrity of judical action and prevents the manifest injusticethat retroactive application can cause. Id. at 877-79; See also,Coe v. Secretary of Health, Education and Welfare, 502 F.2d 1337,1340 (4th Cir. 1974).

109. In cases involving property rights against the UnitedStates, the doctrine of separation of powers (as well asprinciples of equity) forbids application of a substantive lawpassed by Congress, pending appeal, that would effectivelyrequire a federal court to reverse a judgment entered against theUnited States. United States v. Klein, 80 U.S. (13 Wall.) 128, 20L.Ed. 519 (1872); see, also Sioux Nation of Indians.

110. Under the Fifth Amendment property may not be takenwithout the payment of just compensation. Rights that have becomevested by judgment constitute property protected from legislativeinterference. McCullough v. Virginia, 172 U.S. 102, 123-24, 19S.Ct. 134, 142, 43 L.Ed. 382 (1898); Daylo, 501 F.2d at 816.Moreover, contract rights against the United States constituteproperty protected by the Due Process Clause. Lynch v. UnitedStates, 292 U.S. 571, 579, 54 S.Ct. 840, 843, 78 L.Ed. 1434(1934). Courts have carefully distinguished situations wherecongressional action impacts only on unvested statutory rightsfrom those where vested contract rights are effected. See,deRodulfa v. United States, 461 F.2d 1240, 1257 (D.C. Cir.),cert. denied, 409 U.S. 949, 93 S.Ct. 270, 34 L.Ed.2d 220 (1972);Memorial Hospital v. Heckler, 706 F.2d 1130, 1136-37 (11th Cir.1983).

111. Any vested cause of action, whether emanating fromcontract or common law principles, constitutes property beyondthe power of the legislature to take away. deRodulfa, 441 F.2d at1257. Similarly an attachment, mortgage or other lien entitlinga creditor to resort to specific property for the satisfaction ofa claim is a property right protected 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 interpretationsof the Weicker Amendment, that statute purports to require thisCourt to dissolve its injunction, thus "reversing" a particularjudicial order in a particular case. If required to decide thisquestion, this Court might well be forced to conclude that aspectof the Weicker Amendment violates fundamental principles ofseparation of powers. Sioux Nation of Indians; Nixon v.Administrator of General Services. This Court's determination asreflected in Conclusion 103 avoids that problem.

113. However, the United States' strained interpretation of theWeicker Amendment presents serious due process issues that do notafflict Board's (and this Court's) reading. One aspect of thosedue process problems specifically regards the effect of theWeicker Amendment as interpreted by the United States on fiscal1983 funds. When those funds were appropriated they becamepotentially "available" to Board within the meaning of Section15.1. At the moment the funds so became available, the ExecutiveBranch had an obligation "to make every good faith effort to seekto 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 fixedin legal terms. Even were it assumed Congress might later alterstatutory rights as to the availability of those funds, Congresscould not, consistent with due process, abrogate Board's ConsentDecree rights that had already vested both by contract and byjudgment. See, Daylo; Cerro Metal Products; see also, BlackhawkHeating.

114. Put in a slightly different way, at the time the WeickerAmendment was enacted it was no longer within Congress' power toaffect the United States' duties under the Consent Decree as tothe restrained fiscal year 1983 funds. Pursuant to this Court'sSeptember 27, 1983 order, the United States had recorded thosefunds as obligated, with Board as an alternative contingentobligee of the Executive Branch. 31 U.S.C. § 1501(a)(6).Availability of funds for a particular purpose is determined atthe time of obligation. Once obligated, they were exempt from anylater statutory alterations of availability.

115. From still another perspective, the United States' falsereading of the Weicker Amendment also appears to run afoul of dueprocess because it would destroy Board's right to satisfy itsclaim from the funds restrained by this Court. In that sense, thefrozen funds are similar to an attachment or lien allowing one toresort to specific property for satisfaction of a claim. Suchinterests are property rights protected by the Fifth Amendment.Armstrong.

116. In addition to the substantial due process questionsraised by the United States' interpretation, its view of theWeicker Amendment also poses additional separation of powersconcerns not presented by this Court's reading. Under the UnitedStates' version, this Court would impermissibly have to giveeffect to a pronouncement by Congress that "what had theretoforebeen judicially declared as law shall be deemed never to have hadeffect." Cerro Metal Products. That would place Congress in theposition of having crossed the delicate line between legislativeand judicial functions by dictating the result in a particularcase. According to the United States the Weicker Amendmentbecomes a "substantive" determination applicable to only theChicago Board of Education and this lawsuit. While Congress hasbroad power to legislate with regard to classes of cases, itspower is far more limited with regard to individual cases. See,Sioux Nation of Indians, 448 U.S. at 430, 100 S.Ct. at 2748(Rehnquist, J., dissenting). Relatedly, the United States'proposed reading also violates the principle that Congress cannotchange the applicable law in a pending appeal to relieve theUnited States of an unfavorable judgment in a dispute involvingproperty rights. Klein; see also, Sioux Nation of Indians, 448U.S. at 404, 100 S.Ct. at 2735.

117. Finally, a retroactive application of the United States'position on the Weicker Amendment — creating the fiction that thefunds had never been available, so that there had never been aviolation — would also result in "manifest injustice" (seeConclusion 104). It would belatedly disrupt an agreed process forvindicating the constitutional rights of Chicago students andreward the contumacious actions of the Executive Branch. It wouldalso redefine Board's mature rights under the Consent Decree andsaddle Board with a substantially broader responsibility forfinancing the Plan. Under the circumstances, it would be whollyimproper 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 States'interpretation, under which the statute would be a congressionaldetermination that the restrained funds are not now and neverwere available, is incorrect because (a) it conflicts with theplain language of the Amendment, (b) it conflicts with thelegislative history of the Amendment and (c) it would render theAmendment plainly unconstitutional in a number of ways. Bycontrast the Board's interpretation — that the Weicker Amendment,if constitutional, requires this Court to vacate its restrainingorder, but does not dictate who should receive the funds — iscorrect, reflecting the plain language and legislative history ofthe Amendment. While the Amendment might nonetheless poseconstitutional problems, this Court need not reach that questionbecause it is now prepared to lift its restraining order uponissuance of an appropriate order in conformity with this opinion,thereby avoiding any potential conflict with the Amendment.

119. Accordingly neither the Yates Bill nor the WeickerAmendment renders the restrained funds unavailable to be providedto Board. Furthermore, the $20 million provided to Board pursuantto the Yates Bill does not satisfy the United States' obligationsunder Section 15.1 nor fully remedy its past violations. Thatcontention, initially made by the United States in its Motion ToDismiss filed immediately after passage of the Yates Bill, andrepeatedly reasserted up to the present, is wholly untenable. Oneprimary effect of the language and legislative histories of boththe 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 befurther considered and enforced by this Court.

Additional United States Violations of Section 15.1 and Subsequent Court Orders, and Consequent Remedial Obligations

120. All the following actions, taken by the Executive Branchin connection 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 Branchin connection with Congressional consideration of the WeickerAmendment, also constituted violations of Section 15. 1 (seeFindings 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 Courta Report in purported compliance with its reporting obligationsunder Order ¶ 2, 567 F. Supp. at 288. That Report failed topresent a discussion of specific steps to be included in theUnited States' program of compliance with the Order and was hencea willful and bad faith violation of the United States' reportingobligations.

123. In the same way, the alleged Plan of the United States forSupporting the Desegregation Plan of Board of Education of theCity of Chicago, filed with this Court November 10, 1983,contained no adequate suggestions at all for remedying the UnitedStates' past Consent Decree violations or for providing furtherfunding for the Plan. By submitting that so-called "Plan," theUnited States willfully and in bad faith violated this Court'sOctober 28, 1983 order.

124. As part of the same ongoing pattern, the United States'activities with regard to the funds restrained by this Courtconstitute further willful, bad faith violations of Section 15.1and subsequent Court orders. 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 reappropriation 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 UnitedStates continues deliberately to flout Section 15.1, the ConsentDecree and subsequent court orders by engaging in a broad courseof conduct designed to render unavailable funds that could beused, and would go part of the way toward being adequate, forimplementation of the Plan. Those actions, which are acontinuation of the conduct previously found by this Court toviolate Section 15.1, constitute additional willful and bad faithviolations 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 Educationto promulgate new Regulations — apparently in direct response tothis litigation — designed to render funds unavailable forprovision to Board for implementation of the Plan constitute anadditional and deliberate violation of Section 15.1 andsubsequent court orders. Those proposed regulations, 49 Fed.Reg.7546-51 (February 29, 1984), are designed to "interpret"statutory eligibility criteria for grants from Secretary'sDiscretionary Fund in a manner inconsistent with the intent ofCongress. In any case they are an attempt to render alreadyavailable funds unavailable for Board's use.

127. Such persistent violations of the Consent Decree andsubsequent court orders by the United States may give rise toremedial obligations that go beyond the particular obligationsinitially contemplated by Section 15.1. It is a basic equitableprinciple that a court may devise a remedy that exceeds the termsof a prior agreement between the parties if necessary to make theinjured party whole. Walters v. Marathon Oil Co., 642 F.2d 1098,1100 (7th Cir. 1981). Thus a court may impose "additionalconsistent burdens" designed "to ensure implementation of thedecree" when a party to a consent decree has failed to complywith his obligation. Brewster v. Dukakis, 675 F.2d 1, 4 (1st Cir.1982).

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'sFranchise Litigation, 689 F.2d 1150, 1159 (3d Cir. 1980); NLRB v.J.P. Stevens & Company, Inc., 563 F.2d 8 (2d Cir. 1977), cert.denied, 434 U.S. 1064, 98 S.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 to direct such action,however, is not dependent on a finding of contempt or bad 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).

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 notflout its obligations or take actions that have the effect ofdestroying or injuring the right ofthe other party to receive the benefits of the agreement.Williston on Contracts §§ 670, 1959 (3d ed. 1978). Though it isalways important to ensure accountability, that importance isheightened in the present case, where it is the United Statesthat has so persistently attempted to flout 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,like any citizen, has the "right to expect fair dealing from[the] Government." S & E Contractors v. United States,406 U.S. 1, 10, 92 S.Ct. 1411, 1417, 31 L.Ed.2d 658 (1972); see also,United States v. 119.67 Acres of Land, 663 F.2d 1328, 1333 (5thCir. 1981).

130. All the foregoing discussion creates still another doubleaspect of the United States' obligations. First, all theparticular obligations of the United States detailed in theseConclusions are required as a matter of interpretation of theConsent Decree, viewed both alone and in light of the presentcircumstances. Second, even were that not the case the UnitedStates' violations and efforts to undermine its obligations oughtto render performance of the same obligations mandatory as apurely remedial matter.

Present Obligations of the United States

131. This Court's Order ¶ 1(b) decided Section 15.1 of theConsent Decree then required the Executive Branch "to take everyaffirmative step within its legal authority to seek to `find andprovide' desegregation funding to Board, until funding adequatefor full implementation of the Plan has been provided." Order ¶2 then prescribed detailed remedial steps to ensure fulfillmentof this obligation. That remedial portion of the Order wasvacated by the Court of Appeals to give the Executive Branch anopportunity "to fashion its proposed remedy." Except for the $20million provided pursuant to the Yates Bill (over the oppositionof the Executive Branch), the United States has not takenadvantage of the opportunity provided, nor has it given theslightest indication it plans to fulfill its obligations underthe Consent Decree.

132. Consistent with Section 15.1 and the parties' JointStipulation as to their intentions when they entered into thatagreement, it is necessary 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 present circumstances it is clearthat, as a matter of construction of Section 15.1, the UnitedStates is bound to take every affirmative step within its legalauthority to find and provide adequate financing for the Plan,including steps to provide available funds and steps to renderfunds available, as detailed in these Conclusions.

133. In another mischaracterization of the issues, the UnitedStates argues Section 15.1 could not reasonably be construed todictate a substantial funding result. That contention whollymisapprehends the nature of the obligation contained in Section15.1. Section 15.1 essentially directs that a process take place,rather than assuring any particular result of that process. Itdoes not guarantee Board the United States will provide any sumcertain. Instead it requires the United States to undertake theprocess of making every good faith effort to find and providefunds, while the result to be obtained is dependent on andlimited by other circumstances — particularly the amount offunding that is or becomes available as a result of the processand the amount of funding necessary for adequate implementationof the Plan. While those circumstances limit the result to beobtained, they do not limit the nature of the process that theUnited States must undertake to attempt to achieve the result.

134. Under any circumstances, Section 15.1 imposes a seriousand substantial 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.2d 745 (5th Cir. 1980), cert. denied, 450 U.S. 1031, 101 S.Ct. 1741,68 L.Ed.2d 226 (1981). Courts have frequently set demandingstandards for action by government officials who have enteredinto consent decrees containing "best efforts" or similarcommitments. Such standards have included requiring the provisionof available funds and prohibiting or requiring various lobbyingactivities. Courts have not interpreted such commitments topermit government officials to flout or evade their duties.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 ofjustice to accept the United States' argument that such caseshave less force because they involved outrageous conduct by staterather than (as here) federal officials. See, An UndeterminedQuantity, 583 F.2d at 949.

135. There is another locution that equally illustrates thefallacy in the United States' position. Though the ExecutiveBranch certainly does not retain discretion under Section 15.1 asto whether to meet its obligation, so that it may not directlyrenege on its promise or indirectly undermine it, the ExecutiveBranch does retain broad discretion under Section 15.1 as to howto meet its obligation.

136. As to the presently available funds, the Executive Branchhas in the past totally distorted the concept of exercise of itsdiscretion. It has persistently searched for ways not to meet itsobligation to Board rather than for how to meet that obligation.As a consequence it has so reduced the availability of funds thatsufficient funding to meet its obligation is no longer"available."20. That there are now severely limited availablefunds, resulting in apparently severely limited remainingdiscretion, is the direct consequence of the Executive Branch'sdeliberate violations of Section 15.1. Nor can credence be givento the Executive Branch's contention that it continues to retaindiscretion to dispense with those funds otherwise, based on thesuperficially appealing equitable argument that numerousapplicants for those funds will otherwise be disappointed. Thoseapplicants (even though they do not have any legal entitlement tothe funds, unlike Board) may have a call on the court's equitableconscience, but the Executive Branch does not. It is theExecutive Branch that has wrongfully created these circumstances,and it cannot in good conscience invoke the equities as surrogatefor the innocent applicants. Nevertheless, under Section 15.1 theUnited States still generally retains its discretion as to how tomeet its obligation, and it need not provide the now-availablefunds to Board if it renders other adequate funds available.

137. Unless the United States so renders other adequate fundingavailable, Board is entitled under Section 15.1 to the availablefiscal 1984 funds to the extent necessary adequately to implementits desegregation programs. This result is also required becausethe United States' past and continuing violations of the ConsentDecree have eliminated all alternative sources of available fundsand because it is necessary to redress those violations. At aminimum the Executive Branch has historically allocated Title IVand Discretionary Fund moneys disproportionately in favor ofother applicants. In prior years other potential recipients ofthe fiscal year 1984 funds have benefitted from Secretary'sviolations of the Consent Decree, and the funds now remainingavailable are not even sufficient to correct that historicalimbalance. Even apart from that, Secretary has not created anyentitlement in other applicants to those funds in fiscal year1984, and no number or form of Executive Branch "policy"decisions, "representations" or subsequent "commitments" can undoor override the United States' obligations to Board and indeed tothis Court. See, Geisser; Brewster; Ricci.

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 thathad been intended was to give Board access to existing fundingsources, the verb "provide" would have done the job. "Find"imports something more: the search for funds. If the UnitedStates' obligation did not extend to activities such as seekingreappropriation or new legislation when other sources ofavailable funds prove inadequate, the word "find" would berendered meaningless. It is a cardinal principle of constructionthat each provision of an agreement should be given meaning ifpossible. Hanley v. James McHugh Construction Co., 444 F.2d 1006,1009 (7th Cir. 1972). And the linked use of the phrase "everyavailable form of financial resources" stresses a "universalsearch," which necessarily includes legislative initiatives asone aspect of the required effort.

139. Nor is Conclusion 138 speculative, though the language isclear enough. Examination of extrinsic evidence also confirms theExecutive Branch's obligation under Section 15.1 extends tolobbying activities. Language proposed as a precursor to Section15.1 in a June 19, 1980 letter from Assistant Attorney GeneralDrew Days to Board (GX 1-20) shows that the word "available"cannot be read as a term of limitation and that legislativeinitiatives were contemplated.

140. Moreover, the broad circumstances (see Findings 108-09)surrounding entry of the Consent Decree also indicate the UnitedStates' obligation in Section 15.1 extends to lobbyingactivities. Its financial commitment in Section 15.1 was theprincipal quid pro quo for Board's willingness to foregolitigation and develop the Plan. In return for its Section 15.1commitment the United States secured the full result it sought(and might not otherwise have achieved) without the expense anddelay of complex litigation.

141. It would be inequitable to construe the Consent Decree ina way that would mean Board undertook its binding and substantialobligations without any assurance the United States could notcompletely eviscerate its one obligation through lobbyingactivity or inactivity. It is a principle of contractconstruction that an agreement should not be interpreted in amanner that will place one party wholly at the will or mercy ofanother. Padbloc Co. v. United States, 161 Ct.Cl. 369, 376-77(1963). It would distort that principle to hold that while Boardis bound to its substantial obligations the Executive Branch isfree completely to undermine its obligations through lobbyingactivity or inactivity. No such totally empty promise will beimplied by this Court.

142. Viewed either alone or in the present circumstances,Section 15.1 (as a matter of construction) requires the ExecutiveBranch promptly to undertake some combination of the followinglobbying activities to the extent necessary to assure financingadequate for implementation of the Plan:

(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 reappropriation of excess 1983 funds, and, at the appropriate time, excess funds in 1984 and subsequent years;

(c) requesting reappropriation 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 unavailable for provision to Board.

143. As for Conclusion 142(a), the Executive Branch andspecifically the Department of Education are required by statuteto submit reports to Congress conveying similar information. See,20 U.S.C. § 3486; 31 U.S.C. § 1105, 1108. As for the remainingactivities described in Conclusion 142, they represent theExecutive Branch's minimum obligations with respect tolegislative initiatives consistent with the terms of Section15.1, either on its face or as interpreted in light of thepresent circumstances. Of course the Executive Branch retainsdiscretion to choose among those potential legislativeinitiatives, so long as it exercises that discretion in a mannerso as "to make every good faith effort" to "find" adequatefinancing.

Separation of Powers: Judicial Consideration of Legislative Activities

144. Separation of powers doctrine serves "to check the extentof power exercisable by any one branch of Government in order toprotect the people from oppression," Consumer Energy Council ofAmerica 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). That doctrine was adopted "not to promote efficiencybut to preclude the exercise of arbitrary power." Myers v. UnitedStates, 272 U.S. 52, 292-93, 47 S.Ct. 21, 84-85, 71 L.Ed. 160(1926) (Brandeis, J., dissenting). It does not require "threeairtight departments of government." Rather the doctrine isflexible, and the measure of conformance to its principles ispragmatic. Nixon v. Administrator of General Services,433 U.S. 425, 441-43, 97 S.Ct. 2777, 2789-90, 53 L.Ed.2d 867 (1977).

145. To determine whether an act of one branch of governmentdisrupts the proper balance between the coordinate branches, theproper inquiry focuses on the extent to which the act preventsanother branch from accomplishing its constitutionally assignedfunctions. Only if that threshold inquiry reveals the potentialfor disruption will a court then examine whether that impact isjustified by an overriding need to promote objectives within theconstitutional authority of the first branch. Id. at 443, 97S.Ct. at 2790.

146. Enforcement of the Consent Decree by foreclosing certainnarrow legislative activities by the Executive Branch, andrequiring certain others, involves no disruption of lawfulExecutive Branch activities. Nor does it disrupt the balancebetween coordinate branches, because the Executive Branch itselfproperly exercised its own constitutionally assigned power whenit chose to enter into the Consent Decree. Enforcement of theExecutive Branch's own voluntary decision is not an unwarranted"disruption" of the exercise of its powers. See, id.; Citizensfor a Better Environment v. Gorsuch, 718 F.2d 1117, 1127-30(D.C.Cir. 1983); Gautreaux v. Pierce, 690 F.2d 616, 637-38 (7thCir. 1982); Alliance To End Repression v. City of Chicago,733 F.2d 1187 at 1191 (7th Cir. 1984).

147. Enforcement of the full substance of the United States'commitment in Section 15.1 is further justified by the"overriding need" to protect the constitutional rights of Chicagostudents and the integrity of the Judicial Branch itself. Nixonv. Administrator of General Services; see also, Marbury v.Madison, 5 U.S. (1 Cranch) 137, 163, 177, 2 L.Ed. 60 (1803); AnUndetermined Quantity, Etc., 583 F.2d at 949.

148. Nor do the legislative activities of the Executive Branchin the circumstances of this case present "political questions"that may not be considered by this Court. Baker v. Carr,369 U.S. 186, 217, 82 S.Ct. 691, 710, 7 L.Ed.2d 663 (1962), defines thecriteria for evaluating the applicability of the politicalquestion 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 initiallyappear to be committed to another branch by the Constitution havebeen found not so committed and subject to review by the courts.See, Powell v. McCormack, 395 U.S. 486, 89 S.Ct. 1944, 23 L.Ed.2d491 (1969); Roudebush v. Hartke, 405 U.S. 15, 92 S.Ct. 804, 31L.Ed.2d 1 (1972).

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

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 isnot an officious intrusion upon the functions of the legislativebranch, violative of the principle of separation of powers, whenthe President proposes a program of lawmaking . . ." E. Dumbauld,The Constitution of the United States 311 (1964). 151. Article II, Section 3 addresses and clarifies a separationof powers issue not at all implicated in the present case. Itestablishes the Executive's duty and ability to recommend mattersto Congress. It does not however address the accountability ofthe Executive Branch for its failure to meet an independentobligation to do so, nor does it excuse that failure. It assuresonly that fulfillment of an obligation such as that owed to Boarddoes not violate the doctrine of separation of powers.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'sSection 15.1 commitment to Board (and to this Court as well)effectively reflects a determination that if sufficient presentlyavailable funding could not be provided, it would become"necessary and expedient" to undertake legislative initiatives.That determination represented a proper exercise of the ExecutiveBranch's discretion and a voluntary limitation on the futureexercise 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 Number82-2377 (D.C.Cir. December 21, 1982), vacated as moot, DocketNumber 82-2377 (D.C.Cir. February 1, 1983).

153. Such Executive Branch agreements to particularrestrictions on the exercise of its "executive" powers are properand can be enforced. Gautreaux v. Pierce, 690 F.2d at 637-38;Alliance To End Repression, at 141. Self-imposed restraints ofthis type do not impermissibly infringe upon Executive Branchdiscretion. Citizens for a Better Environment v. Gorsuch. Indeedthe United States' ability to restrict itself and enter intobinding commitments is a "competence attaching to sovereignty."Perry v. United States, 294 U.S. 330, 353, 55 S.Ct. 432, 436, 79L.Ed. 912 (1935), rejecting the contention (much akin to that theUnited States seeks to advance here) "that the Government cannotby contract restrict the exercise of a sovereign power."

154. Board's rights against the United States are embodied ina consent decree, a judgment that can be fully enforced by thisCourt. United States v. City of Miami, 664 F.2d 435, 439-40 (5thCir. 1981) (percuriam). Even were Section 15.1 viewed as a simple contract, theUnited States' promise would remain fully enforceable (though inthat event enforcement might be relegated to the Claims Court,28 U.S.C. § 1491(a)(1)). Litigation to enforce government contractsrecognizes both (a) the general potential for contractualliability even when the United States exercises "sovereign"powers and (b) the specific "validity of a duty to obtain funds"when the United States contracts to do so. Municipal LeasingCorp. v. United States, 1 Cl.Ct. 771, 774 n. 2 (1983); S.A. HealyCo. 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); GerhardtF. Meyne Co. 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 arepresent in this case. There are "judicially discoverable andmanageable" standards for evaluating the Executive Branch'slegislative activities. Baker v. Carr. Its specific actions tomeet its commitment to Board will be empirically verifiable, forterms such as "every good faith effort," which describes theExecutive Branch's duty, are frequently used to describe legalobligations and are routinely enforced by courts. See, UnitedStates v. McAndrew, 480 F. Supp. 1189, 1193 (E.D.Va. 1979) (orderrequiring "reasonable efforts" sufficient to support contemptfinding).

156. Enforcement of the Executive Branch's duty to makelegislative initiatives will not involve this Court "in policydecisions". Baker v. Carr. It was the Executive Branch itselfthat decided the then-contemplated litigation with Board shouldbe settled immediately on the terms embodied in the ConsentDecree. This Court's enforcement of that agreement does notinvolve it in evaluation of the policy judgments of the ExecutiveBranch. See, Citizens for a Better Environment v. Gorsuch.

157. Finally in the "political question" analysis, judicialenforcement of the Executive Branch's commitment does not showany "lack of deference" to a coordinate branch of Government.Baker v. Carr. Quite the opposite is true. Throughout theseproceedings, the considerable deference shown the ExecutiveBranch by both this Court and Board has been consistentlyexploited by the United States' obstructionism. Under thecircumstances, it is entirely proper for this Court to enforcethe full substance of the United States' obligation.

Means of Enforcement

158. At this point the rights and duties of the parties havebeen defined. It remains to address the most appropriate means ofenforcement. This opinion is not accompanied by an order forthree reasons:

(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 ofthe enforcement issues.

159. Because the United States failed to provide availablefunds or adequate funding to Board for school year 1983-84, andbecause the United States otherwise failed to comply with itsobligations for that school year under the Consent Decree and asdetermined by this Court and the Court of Appeals, the UnitedStates has not yet effectively begun to meet its fundingobligations.

160. These Findings and Conclusions have often made referenceto the Executive Branch. But the litigant here is the UnitedStates, and the Consent Decree is a bindingobligation of the United States as such, not of the ExecutiveBranch (which is after all not a legal entity). As established inthese Findings and Conclusions, the Executive Branch haspersistently sought to render funds unavailable to Board, and ithas succeeded in so limiting the current availability of fundsthat it has undermined the United States' ability to comply fullywith the obligation contained in Section 15.1. Considering thoseviolations, by which the Executive Branch has deliberatelydisabled itself from complying with Section 15.1, this Court nowdetermines the current obligation of the United States remainsone of providing Board with an amount adequate for implementationof the Plan in school year 1984-85. As Conclusion 158 indicates,considerations of comity and separation of powers dictate thatthis Court defer (briefly, to be sure) its determination as tothe means necessary to ensure that the Executive Branch willattempt to meet that obligation.

161. To be entitled to permanent injunctive relief, a plaintiffnot only must prevail on the merits of its claim but also mustcarry the burden of what "is often referred to as `balancing theequities' or as drawing the `balance of convenience.'" 7 Moore's¶ 65.18[3], at 65-136. As the Supreme Court put it in BeaconTheatres, 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 theDistrict Court considering a permanent injunction could wellapply the same criteria our Court of Appeals has consistentlyannounced as required for preliminary injunctive relief (Godinezv. Lane, 733 F.2d 1250 at 1257 (7th Cir. May 9, 1984)), of coursesubstituting actual victory on the merits for a mere reasonablelikelihood of success.

162. Application of those principles to the present casedemonstrates Board has borne its burden with regard to each ofthose 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 forpermanent injunctive relief.

1. In the law that term is most commonly used in choice-of-lawproblems, reflecting the theory of analysis with which ProfessorDavid Currie is most often associated. See, e.g., In re Air CrashDisaster Near Chicago, 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 Hampshirethe idea this Court should be appealed to because the NewHampshire affiliate of the National Diffusion Network, funded bythe United States Department of Education (the "Department") ranout of funds May 11, 1984. To date, 11 separate letters have comein about the loss of a program that (though this Court is notitself an educator) sounds highly worthwhile. If the UnitedStates will not be candid and acknowledge that this baby, and allthe other orphans created by the United States' intransigence,must be laid at its doorstep and not that of this Court, eitherthis Court 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 theConsent Decree will omit "Part I," and whenever the followingFindings and Conclusions refer to "Section —" without identifyinga document, the reference is to that section of Part I of theConsent Decree.

6. That phrase is one with an honored history in a somewhatdifferent — though this time closely-related — legal context. Itis customarily used to describe the situation of the party that,having violated a court order, is sentenced to confinement untilhe or she complies 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 carries the keys of his prison in his own pocket").Of course the parallel to the present case is too obvious torequire spelling out.

7. To the extent congressional action was required to free upfunds, but might not have been obtained because of competingconsiderations that Congress might have deemed more importantdespite a request from the administration, the United States asa litigant could not be faulted or held liable for a violation ofSection 15.1. However the United States' conduct has poisoned thewell by violating its agreement "to make every good faith effortto find and provide every available form of financial resources,"and it cannot therefore excuse itself by pointing tocongressional attitudes created by its own flouting of itscontractual obligations.

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).

[fn1a] As well as in magnet schools (§ 4.1.2) and desegregated schools(§§ 10.1 and 10.4).

[fn2a] Moreover, Stipulations 101-02 and the extrinsic evidenceoffered by the Government, in the form of its correspondencefile, reflect that in the spring of 1980, the former counselrepresenting a former Board were preoccupied with the potentialamount of an ESAA grant that might be generated if the partiescould agree on the specific parameters of a student assignmentplan. However, after a new Board took office and retained newcounsel, the negotiations took a sharply different direction,leading to agreement on a general funding principle notincorporating any previous specific discussions.

[fn3a] Two other sub-categories are also identified: (a) stable mixedschools having a small but relatively constant enrollment ofwhite children and (b) schools whose enrollment composition iscurrently racially mixed but is projected to become raciallyidentifiable.

[fn4a] All the enrollment data in Findings 130 through 134 excludespre-school and kindergarten children.

[fn5a] To reflect this increase, an appropriate adjustment was made inthe teacher salary and career service salary cost categories setforth in the budget sheets included in Board Ex. 117.

[fn6a] Part of the money budgeted by Board for incrementaldesegregation expenditures is attributable to State Title Ischool aid. State Title I aid constitutes that portion of CommonSchool Fund State Aid (or general state distributive aid)distributed to Illinois school districts based on the number ofeconomically disadvantaged or "Title I eligible" studentsenrolled in each district. Addendum A attached to these Findings(following Finding 376) describes the relationship between StateTitle I school aid and desegregation expenditures. (BacchusTestimony)

[fn7a] In recent fiscal years Board has taken a series of actions toplace its taxes on a more "cash-current" basis and reduce theamount of "levied but unbilled" taxes. Those actions have playeda significant role in reducing or eliminating budget deficitsoriginally projected for those fiscal years.

[fn8a] Regulations promulgated by the Authority regarding thedefinition and determination of a "balanced budget" essentiallyrequire that Board's proposed expenditures be supported on a cashbasis. Thus the "extension rate" amendment — which generatedapproximately $100 million in additional cash receipts for fiscalyear 1983-84 — had a significant impact on eliminating Board'soriginally projected budget deficit for this year.

[fn9a] All references are to documents in Board Ex. 118.

10. In fact the initial funding source for such programs was andis generally not determinable. Prior to the imposition of theState Title I targeting requirement, all Common School Fund StateAid, including State Title I aid, was included withoutdifferentiation in Board's general resource base.

11. Certain 946/947 expenditures are considered to have beenfunded from "reallocated" State Title I resources in the sensethat, as of the 1981-82 school year, such resources would nothave been required, pursuant to revised or modified Boardstaffing formulae, to have been spent at the schools receivingsuch resources even if such schools had received such funding orportions thereof in prior school years.

12. Board's other source of funding for those programs was aportion — approximately $10 million — of other general Boardresources. Those funds and related programs are identified by"Project Code 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 othergeneral Board resources (identified, as described above, by"Project Code 163"). Moreover, in school year 1983-84, Boardincreased its incremental desegregation appropriations by $10million (identified by "Project Code 496") — with approximately$8 million of that amount being used to expand the implementationof the Plan's Educational Components.

14. 512 refers to employee salaries and related expenses and 513refers to expenses for instructional materials. For convenience,these Findings 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. at383 n. 8). These Findings and Conclusions have foreclosed thatpossibility.

16. It was clearly the United States' obligation to do all thespadework for this purpose, consistent with its duty "to find andprovide" under Section 15.1. Here too the United States hasbreached its commitment, so it has been Board that has from theoutset scrutinized the relevant appropriations bills, statutesand regulations to identify available funds for the United Statesand that has now identified further available funds as set forthbelow.

17. This Court recognizes that (a) most of those funds areappropriated by Congress primarily for various operational orsimilar costs necessary for the functioning of the Department ofEducation and (b) just as funds necessary for Board's basicoperations and obligations are not available for the Plan (seeConclusion 26), those funds are not "available" to the extentreasonably necessary for the Department's operations. Thus thisConclusion's determination such funds are "available" isqualified by the condition that the Department may show that some(or perhaps even all) those funds are not available because theyare necessary for Department operations. In any event, theidentification of such funds by Board is a particularly aptillustration of Board's having performed a function the UnitedStates is obligated to perform under Section 15.1 and the priororders of this Court: identifying every available form offinancial resources.

18. Department of Education's Office for Civil Rights contractswith other organizations to provide technical assistance to localeducational agencies to assist them in complying fully with TitleVI requirements. S.Rep. No. 247, 98th Cong. 1st Sess. 163-64(1983). That technical assistance program was created by theOffice for Civil Rights pursuant to its authority to make anypayments necessary to carry out its compliance and enforcementfunctions. 20 U.S.C. § 3413(c)(3); P.L. 98-139, Title III, 97Stat. 895.

19. This discussion does not address any questions of validity ofsuch an enactment — only its meaning.

20. Thus, with respect to available funds, the Executive Branchhas not even afforded its obligation to Board equal status withits desires to use the funds otherwise. It has not even tried tofund Board's needs in the same proportion as it funded otherapplicants.

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