Appendix — Board of Education v. United States

Supreme Court brief1985

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Text

84-138

Court. US

IN THE FEB 28 1985

Supreme Court of the United] Mrater — stevas

CLERK

OCTOBER TERM, 1984

BOARD OF EDUCATION OF THE CITY OF CHICAGO,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Of Counsel:

HuGuH R. McComas, Jr.

DaviID NAREFSKY

DENISE L. JARRARD

ISHAM, LINCOLN & BEALE

Three First National Plaza

Suite 5200

Chicago, Illinois 6602

(312) 558-7500

C. RICHARD JOHNSON

Three First National Plaza

Suite 5200

Chicago, Illinois 60602

Counsel for Petitioner

RoBERT C. HOWARD

ROBERT M. WEISSBOURD

JAMES G. BRADTKE

HARTUNIAN, FUTTERMAN

& HowarD

55 E. Monroe

Suite 4005

«Chicago, Illinois 60603

(312) 372-6475

Pandick Midwest, Inc., Chicago ¢ 454-7600 sv

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Table of Contents

Second Opinion of the Court of Appeals (744 F.2d

1300 ( 7th Cir. 1984) ) ................ RT TERRE Te ee Ee la

Second Findings of Fact and Conclusions of Law of

the District Court (588 F.Supp. 132 (N.D. Il.

Pe lkicthctcdiciiihisinticatladandbicnidipaehscimsisanmnisientinaennhaistinnten 18a

Remedial Order of the District Court (592 F.Supp.

ee I viciicescnedincenenbescninisiherninmnanbiindanien 216a

First Findings of Fact and Conclusions of Law of the

District Court (567 F.Supp. 272 (N.D. Ill. 1983)). 234a

First Opinion of the Court of Appeals (717 F.2d 378

go FR EE ee 269a

CI i i ciininsetcinittiitincciniciabitnenisinnilingennitcneliiinntcin 282a

Judgment of the Court of jaa Qo 297a

Denial of Petition for Rehearing ........................:cee00 298a

Section 405 of Title IV of the Civil Rights Act of 1964 299a

Section 565 of the Education Consolidation and

RSI FA GE FIGS cincenrecrinvensicrrreeseetimarerntens 299a

Section 577 of the Education Consolidation and

EINER BA GE TEES winceseee reese 300a

Section 583 of the Education Consolidation and

I FUE GE BIE vnncennciterninmneceenerenesenieion 302a

Appropriations Act for the Department of Education

PR Te NE ee ecitiirccincncnniitinnnsisitinnstiiniieannitsinnaen 304a

Appropriations Act for the Department of Education

EE Ce MED stahneckeremiemannniinnieinnnenmnnnte 30Sa

Regulations for the Secretary’s Discretionary Pro-

|___REPORT Te 307a

in the

United States Court of Appeals

Zor the Seventh Cirrnit

Wo. 84-2405

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

Boarp Or EpucaTIon Or THE City OF CHICAGO,

Defendant-Appellee.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 80 C 5124—Milton I. Shadur, Judge.

ARGUED SEPTEMBER 6, 1984—DECIDED SEPTEMBER 26, 1984

Before CuMMINGS, Chief Judge, Woop and FLauM, Cir-

cuit Judges.

FLauM, Circuit Judge. This case comes before us for

eee on ae ee oe ee

court interpreting enforcing a consent decree was

executed by the United States and the Board of Educa-

tion of Chicago (“Board”). For the reasons set forth

below, we vacate the order and remand this case for an

evidentiary hearing.

2 No. 84-2405

I. FACTS

A. Events Prior to the First Appeal

As we explai in our first opinion, see United States

v. Board of Education of Chicago, 717 F.2d 378 (7th Cir.

1983), this case arises from a complaint that the United

y in vi

and titles and VI of the Civil Rights Act of 1964. On

the the a j con-

directing the United States to comply with ¢ 15.1 of the

Decree, which provides that

[elach party is obligated to make every good faith

effort to find and provide every available form of

financial resources for the implementation

of the desegregation

days i

After five of hearings, the district court entered an

order on June 30, pe Ay Ra MS ee Berd

provi

yecdige teas yeziaa Gites at

epee alee

dh ae Jaieihl Hh

5254~<. i Ecawawes bye

fl aut Te ; E F Rani a

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7 Brtanaent + 4} ral ie

. nai :

HH ull ade a3! lilt Ht

Ress EEE

ae ; i i

1 Hi

21, 1983, United States

aydaay anes peueeed the Showing tageiion

1. Congressional Activities

C. Events Subsequent to the First Appeal

ire if

fie sia

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84-2405

apap apis

ui Re

chi ba

al Hib

ante AHH bes

of the [

Conclusion of Law No. 142. Such

Cheg net gee phe

for

activities to the extent

ial if

8 No. 84-2405

After allowing the United States time to respond to its

opinion, the district court issued an order on August 13,

1984 (“1984 Remedial Order’’), declaring that, “in light

of the{ ] present circumstances. the United States has an

unconditional obligation to provide Board with $103.858

million for implementation of the [ tion] [pjlan in

school year 1984-85.” 1984 Remedial at 9. The court

further ordered that, in the event the United States failed

to provide the funds by A t 22, 1984, the United

States was permanently enjoined to take all necessary

steps to obligate for the use of the Board $17 million in

the 1984 Discretionary Fund and $11.775 million in the

1984 Title IV account. Jd. at 11-12. Furthermore, the court

declared that the United States must formulate an affirm-

ative program each year to assure that up to $103.858

million is placed in an escrow account. Such a program

would consist of the identification of available funds,

— to Congress, and lobbying activities. Id.

at 12-15.

The government now appeals the district court’s 1984

Opinion and 1984 Remedial Order, and it advances two

— ts. opie the United wg Ps pence that ~

istrict court in interpreting { 15.1 as requiring

Executive Branch to engage in legislative activity, to

iaplamiintiog Sin Meecinaioted rime end toe dams ent

implementing the tion plan and the t

the Board has budgeted for this p , and to award

Title IV funds and Discretionary Funds to the Board with-

out regard to other grantees. Second, the government

maintains that if the district court’s interpretation of

q 15.1 is correct, the Decree is unenforceable because it

violates the constitutional doctrine of separation of powers.

According to the government, the Executive Branch does

not have the authority to bargain away its discretion with

respect to its legislative activities or to commit unlimited

financial assistance to only one grantee, in contravention

of the legislative purpose of the desegregation funding

statutes.

ne ne

POT Se:

No. 84-2405 9

II. ANALYSIS

As both parties and the district court have acknowl-

edged, {15.1 is a unique funding provision in a consent

decree that constitutes an unprecedented settlement of

a school desegregation claim by the United States. Mind-

ful of the novelty of the agreement, we carefully crafted

our prior opinion so as to permit the maximum amount

of flexibility and coo ion among the participants in

the Decree as they red toward a workable resolution

of the dispute regarding funds for Chicago school

gation. Our review of the events that transpired on re-

mand convinces us that the process of dispute resolution

has failed remarkably in this case.

A. Interpretation of ¢ 15.1

As we recounted above, our prior opinion interpreted

715.1 as “{mpos{ing] a substantial obligation on the

a to provide available funds to the Board.”

mited States v. Board of Education of Chicago, 717 F.2d

at 383. Since the United States had misinterpreted { 15.1

3 Since we noted s discrepancy in the district court's 1963 Order

as to whether funds in the e IV account and in the Discre-

i Fund were available for use by the Board, we directed

penaitures required by Board to achieve the necessary threhol

i to achieve necessary

evel of furding for Educational Components in predominately

minority schools.’” Jd. at 380 n.2. Both of these district court tasks

(Footnote continued on following page)

10a

10 No. 84-2405

submitted the “Plan of the United States for Supporting

_ the er ae Plan of the Board of Education of the

City of Chicago” (“November 10 Plan’’), in which it out-

lined its position, later rejected by the district court, that

the Wei Amendment had rendered unavailable to the

Board any 1984 funds beyond the $20 million allocated

by the Yates Bil’ * However, in the November 10 Plan,

the government also stated for the first time that it was

— to give the Board priority in the distribution

of desegregation funds under existing federal programs.‘

The district court gave little weight to the November 10

Plan. In its 1984 Opinion, the court stated that the plan

“contained no adequate suggestions at all for remedying

the United States’ past Consent Decree violations or for

providing further funding for the [desegregation] ({pjlan.”

1984 Conclusion of Law No. 123.5

During the most recent oral arguments before this

court, counsel for the government answered questions

ee ay government’s system of “priority” and ex-

plained under this system, the Department of Educa-

tion will put the Board “at the top of the list” for any

;

ng ee

reese

necessary for clarification of the record and were to be car-

within the context of our carefully expressed instruction

istri afford the government an opportunity to

the means by which it would attempt to comply with

has wisely abandoned this position in its argu-

its submission of the November 10 Plan, the United

lit

ity

July 19, 1983,

the district court concluded that by submi the

vernment “willfully and in bad faith”

October 28 order directing the United

lan for its compliance with { 15.1.

sz"

lla

No. 84-2405 11

program grants that can be applied to desegregation

assistance and for which the Board is eligible. According

to the government’s counsel, “top of the list priority” for

Title IV funds not only is a tee that the Board will

receive its “equitable fair ” of funding under Title

IV criteria, but also requires that this funding be ear-

marked for Chicago and be set apart from the usual block

grant funding that is allocated to the regional desegre-

gation centers serving the Midwest. Furthermore, the

vernment’s counsel explained that, with regard to the

i — Fund, “top of the list” priority means that

if the tie tbenae salt aga dheggery ment

project aid its rips ty n efforts,

would have priority “to get what the project called for.’

is subject to the review of the district court,” the gov-

ernment would comply with our interpretation of { 15.1

and would fulfill its “substantial obligation to provide

available funds.”

A 2

[it

i: Be

;

£3

and i

jects received . See United States

to Chicago Board of Education’s Second and Third

terrogatories, at A - with Board’s Motion to Com-

Bee

aEP *

12a

12 No. 84-2405

By so ruling, we reject the district court’s conclusion

that 715.1 mandates that the government attempt to

_juathe tae Gate Wf caeeader Toten Gen toe Seed

rovi rtion of necessary

cannot sup . The district court had reached this con-

1984 hearings, which established the

earings, W e

t the Board’s

In its te 1984 Opinion, the district court noted

we had not its 1983 conclusion regard-

ap riede des obligation,® that conclusion became

of the case. 1984 Conclusions of Law Nos. 6-8.

, the district court also observed that it was not

ms *

ate

cae

are te S neiiinn

En ight of gre hyve Conclusion of Law No. Vial

t o strong indication in our prior a t

vernment’s attempts to Rigas A. its liance

a consent decree are to be preferred icially-

Meet remedies, the district court nt have acted

with optimal prudence if it had not inferred that our

silence its 1983 conclusions indicated validation,

see 1984 clusion of Law No. 6, and if it had freshly

$ he

the e work already undertaken by the district

court and the understandable frustration that attended the

13a

No. 84-2405 13

After closely examining the extrinsic evidence surround-

ing the adoption of { 15.1 into the Decree, we must con-

clude that there is inadequate support for the district

court’s interpretation. In the parties’ stipulation regarding

the negotiations leading to the adoption of { 15.1, we find

no indication that the parties had any federal fundi

sources in mind other than programs that could be used,

consistent with the intent of Congress, to fund school de-

ion efforts. To the extent that the district court

reads the June 19, 1980, letter from Assistant Attorney

Cee Sao ee, 2 Se See A See ped pe

parties con lated legislative initiatives on the part o

the Sesedies Bron to make funds available, see 1984

Conclusion of Law No. 139, we find this reading to be

clearly erroneous. The applicable wording in this letter

tracks the language in 415.1 and does not amplify or

further explain the parties’ intent.

We thus remand this case for a determination of

whether the Board is receiving the maximum level of

i sh» eee ee Se eee © grams

sbursed.

thro which funds for ion can be

In the likely event that the has financial needs that

scnask sak Et ths ¢ “der Go cna aaa Sy that

mi t it eo. to amo t

"enseriet of

yom gg had indeed made .. . available.”

April 5, 1984, at 1416. The best proof that the govern-

ment is fulfilling this duty would be the assignment of

nnel to the task of periodically reviewing federal

ding p , in the Department of Education and

in other fi agencies, for unencumbered funds that

may be used to advance the Board’s desegregation plan.

B. Bad Faith

The district court relied on its finding of governmental

bad faith, in addition to its interpretation of { 15.1, as sup-

port for its 1984 remedial ruling that the United States

had an unconditional obligation to provide $103.858 million

to the Board for the 1984-85 school year. In light of our

l4a

trict court’s determination of bad faith in the govern-

ment’s decision not to provide direct grants for school de-

ion. This policy decision applies to all school

In its most significant finding of bad faith, the district

court described lobbying activities of the Executive Branch

during the passage of the Yates Bill and the Weicker

court, see 1984 Findings of Fact Nos. 504-17, the Ex-

ecutive Branch supported a p addition to the

Yates Bill that specifically would have made unavailable

to the Board the funds that had been restrained by the

district court. Although this proposed provision was not

adopted by the House of Representatives, the Executive

Branch continued to lobby for specific language in the

Yates Bill to make the restrained funds unavailable to the

Board. Even after the Yates Bill was signed into law with-

iSa

No. 84-2405 15

out the desired language, the Executive Branch worked

toward the inclusion of such language in the Weicker

Amendment. On October 5, 1983, prior to the passage of

the Weicker Amendment, the United States

Ingitilien Uieboay storeundiner tae yenuncnsuted Weems

eB aay - vera i

Amendment indicated that no funds other than the $20

million allocated by the Yates Bill were available to the

Board and that, as a result, the court’s 1983 Order should

be dismissed. See Transcript of October 5, 1983, at 31-33.

Although the Executive Branch continued to lobby for lan-

guage in the Weicker Amendment to make funds unavail-

able to the Board, the amendment ultimately was enacted

without this language.

The United States consistently has maintained that its

legislative activities are unreviewable by the judiciary,

thus promp the Board to lain the govern-

ment’s Yates Weicker lobbying were designed to

force a constitutional issue upon the courts. Transcript of

March 20, 1984, at 36-37. We need not reach any conclu-

sion regarding the Yates-Weicker legislative activities, for

we that, even if these activities constituted bad faith

violations of che Decree, the district court abused its dis-

cretion ~~ Se a $103.858 million monetary remedy

against government. Given the clear factual and pro-

cedural background of this case, it shouid have been ap-

ee ras tee ae re cggellgnany

compelled to pay this judgment for its ith, no fed-

eral d ion money would have been available (or

would have been made available) to other school districts.

Such a result would have been unreasonable.

The proper remedy for any bad faith violations of the

Decree in connection with the Yates-Weicker activities

would have been a civil contempt citation under which

the district court could have ordered the government

either to refrain from specific efforts to make .

tion funds unavailable to the Board or to inform Congress

about the funding obligations of the government under

l6a

863

By age

= bas

if eile

Public Lave

Oct, 1984)

mane a ee SS eee =

ep ibe arecar

na Ga on

ry 4

Sit nt

Board asked the director of the

At the

17a

No. 84-2405

of the Executive Branch

below could

this case, we deem it i

reflected in the

III. CONCLUSION

IN THE UNrrep States District Court

For the Northern District of Illinois

Eastern Division

UNITED STATES OF AMERICA,

Plaintiff,

BOARD OF EDUCATION OF THE

Crry oF CHICAGO,

Defendant.

BACKGROUND

FINDINGS OF FACT (“Find-

ings”)

Adoption and A val of the

Desegregation an (the

— and the Nature of the

Consent Decree Negotiations

Development of Part I of the

Plan, Educational Com-

ponents

Statements of the United

States and this Court Relating

to the Educational Com-

ponents

Overview of the Student As-

signment Plan

Demographics of the City of

Chicago and the Chicago

Public Schools

Propriety and Cost of Programs

Proposed for Adequate

Implementation of the Plan

145-61

201-72

No. 80 C 5124

JUNE 8, 1984 OPINION—TABLE OF CONTENTS

Pages

2la-25a

26a-60a

26a-34a

34a-39a

40a-47a

47a-S4a

55a-60a

602a-89a

19a

Board's Financial Affairs and

Condition and the Financial As-

pects of School Desegregation

1983-84 Incremental Desegre-

gation Expenditures

1983-84 Ancillary Desegrega-

tion Expenditures

1983-84 School Budget—

Board Resources and

Expenditures

1979-80 Financial Crisis

Relationship to School

Finance Authority

Projected Deficits for

Future Years

Board Efforts To Find

Resources

Federal and State Funds Re-

ceived by Board

Board's Good Faith Efforts

Addendum A to Findings

Availability of Federal Funds to

Implement the Chicago

Desegregation Plan

Presently Available Funds

Actions by the United States

Affecting the Availability of

Funds

Actions with Respect to the

Yates Bill and Weicker Amend-

ment

The United States’ Non-

Compliance With Section 15.1

501-18

601-09

Pages

90a-l 15a

90a-93a

93a-94a

94a-97a

97a-98a

98a-10la

10la-105Sa

105a-106a

107a-l 13a

113a-11Sa

116a-122a

123a-139a

123a-132a

132a-13$a

139a-l44a

144a-147a

20a

Il. CONCLUSIONS OF LAW

(“Conclusions”)

Law of the Case

Standards for Determining

the Amount of Funding

“Adequate for Implementa-

tion of the Pian”

Standards for Determining the

Share the United States Is Obli-

gated To Attempt To Provide of

the Amount “Adequate for

Implementation of the Plan™

Consideration of Funding Con-

tentions of the United States

Propriety of the Programs Pro-

posed by Board for Impiementa-

tion of the Plan, and Summary

as to the Amount of United

Verification of the Current

Availability of Funds

Meaning and Effect of the Yates

Bul

Meaning and Effect of the Weic-

ker Amendment

Additional United States Viola-

tions of Section 15.1 and

1-9

10-16

17-21

22-35

Conclusions = =—_-~ Pages

147a-iSla

1Sta-iS5a

1S6a-158a

1S8a-162a

163a-165a

16Sa-18la

18la-184a

184a-196a

196a-202a

202a-208a

208a-2!2a

213a-215a

2la

IN THE UNrrep States District Court

For the Northern District of Illinois

Eastern Division

UNITED STATES OF AMERICA,

Plaintiff, |

v , No. 86C 5124

BOaRD OF EDUCATION OF THE

Crry oF CHicaco,

Defendant. |

This case has tended to be sidetracked by a “false con-

flict”"S created by the United States: By creating an artificial

limitation on funds otherwise available or potentially available

to satisfy the extensive Desegregation Plan needs of Chicago's

Board of Education (let alone the varying needs of other

claimants of funds), the United States has sought to place the

Board (and this Court) into a position as though the Board

(and this Court) were choking off deserving educational pro-

gtams."* That is simply not true. It is the United States itself

that has created and is perpetuating that regrettabie situation.

"8 In the law that term is most commonly used in choice-of-law

problems, refiecting the theory of analysis with which Professor David

Currie is most often associated. See, e.g. Jn re Air Crash Disaster

Near Chicago, lilinois on May 25, 1979, 644 F.2d 594, 605 & n.2 (7th

Cir. 1981).

*® Someone has given the educators in the State of New Hamp-

shire the idea this Court should be appealed to because the New

Hampshire affiliate of the National Diffusion Network, funded by the

United States Department of Education (the “Department”) ran out

of funds May 11, 1984. To date, |! separate letters have come in

about the loss of a program that (though this Court is not itself an

educator) sounds highly worthwhile. If the United States will not be

candid and acknowledge that this baby, and all the other orphans

created by the United States’ intransigence, must be laid at its

doorstep and not that of this Court, either this Court or someone else

ought to make that clear.

22a

This Court has held,'‘7 and our Court of Appeals has

confirmed,'® that the United States has broken its word by

refusing to keep the promise it made on the day this lawsuit was

filed, Consent Decree § 15.1, (“Section 15.1”):19

Each party is obligated to make every good faith effort to

find and provide every available form of financial re-

sources adequate for the implementation of the desegrega-

tion plan.

In a sense the United States is not like cther litigants because

the concerns created by considerations such as separation of

powers and sovereign immunity tend to prevent its promises

from being fully enforced in precisely the same way as promises

of (say) IBM or other private defendants. For that reason that

Court has previously been compelled to impose a “freeze”

order to avoid the risk its ability to order relief will arguably be

frustrated. Because the United States has deliberately violated

its original agreement to fund the Chicago Desegregation Plan,

this Court has reluctantly found it necessary to prevent the

distribution to other possible grantees of United States

educational funds, in order to preserve access to all the dollars

that would be potentially available to fund the honoring of the

United Siates’ freely-undertaken (and then freely-broken ) obli-

gation to the Board.

But as this Court has said during the course of hearings on

this issue, the United States “has the key to its cell in its own

17 567 F.Supp. 272 (N.D. Ill. 1983) (“Opinion IT’”’), followed by

the contemporaneously issued June 30, 1983 “Order,” id. at 285.

18717 F.2d 378 (7th Cir. 1983) (“Opinion III’).

19 More accurately, Section 15.1 is part of Part I of the Consent

Decree. For convenience all references in this opinion to the Consent

Decree will omit “Part I,” and whenever the following Findings and

Conclusions refer to “Section—” without identifying a document, the

reference is to that section of Part I of the Consent Decree.

23a

pocket.”’20° It could have, in the exercise of its “every good faith

effort,” assured that all the needed funds would be potentially

available to the Board by (1) shifting available dollars to the

Board to the fullest extent possible without congressional

approval or (2) going to Congress with a request to allow the

shifting of dollars that were already available to the Depart-

ment of Education, but required reallocation because they were

not in fact going to be used for the purposes that had been the

subject of the original allocation.2' It could have done both

those things if necessary. Instead the United States has chosen

to pit deserving applicants for funds one against the other, and

to put the issue before Congress as though the Board and this

Court—rather than the United States as the breaker of its own

voluntary 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

consent decree, it has a twofold aspect.22 It is of course a

20 That phrase is one with an honored history in a somewhat

different—though this time closely-related—legal context. It is

customarily used to describe the situation of the party that, having

violated a court order, is sentenced to confinement until he or she

complies with that order. Gompers v. Buck’s Stove & Range Co., 221

U.S. 418, 442 (1911) (“he carries the keys of his prison in his own

pocket”). Of course the parallel to the present case is too obvious to

require spelling out.

21To the extent congressional action was required to free up

funds, but might not have been obtained because of competing

considerations that Congress might have deemed more important

despite a request from the administration, the United States as a

litigant could not be faulted or held liable for a violation of Section

15.1. However the United States’ conduct has poisoned the well by

violating its agreement “to make every good faith effort to find and

provide every available form of financial resources,” and it cannot

therefore excuse itself by pointing to congressional attitudes created

by its own flouting of its contractual obligations.

22 United States v. City of Miami, 664 F.2d 435, 439-40 (Sth Cir.

1981).

24a

contract—and as a contract, it is enforceable to require the

contracting parties to perform their voluntarily undertaken

duties. Because unlike most contracts the parties have chosen

to submit it for the stamp of court approval, it is also a court

-order—and as such, it is enforceable like any other court order,

by contempt if need be.29

On the sorry record reflected by the matters detailed in this

long opinion, a private litigant that did what the United States

has done would unquestionably be held in contempt—with the

potential for being subjected to a fine or imprisonment as well

as to an order for civil compliance. But for the United States a

contempt fine is meaningless—after all it is the public interest

(and not the injured opposing party) that is vindicated by a

fine, with the money going to the United States itself as

surrogate for the public. Thus imposition of a fine against the

United States would just transfer money from one federal

pocket to the other. Similarly imprisonment of the United

States as such is impossible, and any possible imprisonment of

defiant ranking government officials would be unseemly at best.

For those reasons voluntary adherence by the United States to

its solemnly undertaken responsibilities becomes all the more

important, and its deliberate flouting of those responsibilities

becomes all the more unpardonable.

Now the legal rights of the litigants have to be evaluated.

This opinion has not been drafted in response to the United

States’ conduct just referred to, but that conduct may have

made the issues more clouded than would otherwise have been

the case.

This Court now has before it the evidence developed in

extensive hearings on remand from the Court of Appeals’

decision (“Opinion III,” see n.4) confirming the United States’

23 EEOC v. Liberty Trucking Co., 695 F.2d 1038, 1043 (7th Cir.

1982).

25a

violation of Section 15.1. Although the Court of Appeals did

that, it also vacated 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

affirmative program to preserve the availability of funds poten-

tially available to fulfill its obligations under the Decree. As the

Court of Appeals put it (717 F.2d at 384), this Court had “acted

with excessive dispatch” in doing so. This Court of course had

shared the respect for separation of powers that underlay the

Court of Appeals’ opinion. This Court’s fault, if it was one, was

in a skepticism (grounded in prior conduct by the United

States, not in mere surmise) as to whether the United States

would in fact “fashion its proposed remedy for past non-

compliance, as well as...show that it intends to comply in the

future...” (717 F.2d at 385).

As the following findings of fact (“Findings”) and con-

clusions of law (“Conclusions”) will reflect, this Court’s

anticipatory doubts were unfortunately all too justified. Now

the Department of Education has been given the opportunity

mandated by the Court of Appeals, and it has failed its charge

dismally. In accordance with Fed. R. Civ. P. (“Rule”) 52(a),

this Court sets forth the Findings and Conclusions that con-

stitute the grounds of its action referred to in this lengthy

opinion. es

26a

FINDINGS OF FACT (“Findings”)

Adoption and Approval of the Desegregation

Plan (the “Plan”), and the Nature of the Plan

Consent Decree Negotiations

101. Chicago’s Board of Education (“Board”) operates

the third largest public school system in the United States, In

the 1980-81 school year Board operated 634 schools, including

495 elementary schools, 66 high schools and 73 special needs

schools of various types. In October of that school year Board

had 458,497 students, whose racial/ethnic makeup was as

follows:

White Non-Hispanic ..................:00008 85,292 18.6%

Black Non-Hispanic ...................css000 278,726 60.8%

tii isceics dareiniidhdetcnsenieanshadnevennanaies 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 is the largest employer in Chicago and the

second largest in Illinois. (Stip. 101)

102. After protracted and complex negotiations, the

United States and Board entered into a Consent Decree, which

was filed with 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 the

former Department of Health Education and Welfare and the

former representatives of Board had proved unsuccessful, the

United States Department of Justice notified former Interim

Superintendent of Schools Caruso on April 21, 1980, that if

further negotiations were not successful, the United States

would initiate a desegregation lawsuit against Board. (GX1-27

27a

{Government Exhibit 1, June 1983 hearing, Document 27!)

Ensuing negotiating sessions between the Department of Justice

and former Board representatives primarily addressed whether

the parties could agree on specific racial percentages for a

student assignment plan and on the specific amount and timing

of the Emergency School Aid Act (ESAA) funds that the Board

would receive to implement such a plan. (GX1-21,22) Board

counsel indicated that if the negotiations failed and {itigation

commenced, Board would present counterclaims against

agencies of the federal government. (GX1-39) There was no

significant progress in those negotiations. (GX1-21, GX1-22)

(Stip. 103)

104. During those negotiations a new Board was appoint-

ed and took office. (GX1-22) That new Board formed a

Desegregation Committee (GX1-21) and indicated to the

United States it would bring fresh approaches to the negotia-

tions (Jd. ) Thereafter Board was represented by its new

leadership and by new counsel. (GX1-16) Negotiations then

progressed rapidly, leading to a draft agreement within a few

weeks (GX1-16) and to consummation of the Consent Decree

within another six weeks. (GX1-14,15) That progress resulted

from an altogether different focus. Rather than seeking to

negotiate the specific terms (or even somewhat more general-

ized terms ) of a student assignment plan, the parties instead

agreed to general principles that would guide subsequent

development of a plan. (Consent Decree, Part I) Correspond-

ingly with respect to funding, the parties negotiated a general

principle applicable to both parties. Those negotiations con-

cerning the general funding provision have been described in a

Joint Stipulation of the parties as follows:

At a relatively early stage in the negotiations leading to the

Consent Decree, the parties discussed the question of

financial support from the United States for the Board’s

desegregation activities. It was the Government’s position

28a

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 Trans-

portaion, 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 De-

cree. 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 de-

signed 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 adea’:ate 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

29a

desegregation plan consistent with the principles set forth

in §§ 2-14, and is not a basis for postponement, cancella-

tion or curtailment of implementation of the plan after it

has been finally adopted, but is one legitimate consid-

eration of practicability in meeting the objective stated in

§ 2.1.

(Stip. 104)

105. On September 24, 1980 four events occurred to make

the Consent Decree fully operative:

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

(b) execution and filing of the Consent Decree;

Compiaint, the Consent Decree and the United States’

Memorandum of Law, approval by the Court of the

Consent Decree and its entry by the Court; and

(d) Board’s non-filing of any counterclaim against the

United States.

(Stip. 105)

106. Among the general principles set forth in the Consent

| Decree to guide subsequent development of a desegregation

plan were the following:

| - § 2. Basic Objectives

2.1 Desegregated Schools. The plan will provide for

the establishment of the greatest practicable num-

ber 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,

§ 7.

2.3

2.4

30a

the plan shall provide educational and related

programs for any Black or Hispanic schools

remaining segregated.

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.

Fair Allocation of Burdens. The plan shall ensure

that the burdens of desegregation are not im-

posed on any racial or ethnic group.

Compensatory Programs in Schools Remaining Segre-

gated. To accomplish the objective stated in § 2.2, the

plan will include specific programs for Black or His-

panic schools remaining segregated, in the following

areas among others:

7.1

7.2

7.3

7.4

7.5

7.6

Remedial and compensatory educational pro-

prams.

Improved curricula and instructional and eval-

uative techniques (including the utilization of

tests that validly measure student achievement)

for academic, vocational and _ alternative

educationai studies.

Pre-service and in-service instruction for adminis-

trators, principals, teachers and other school per-

sonnel.

Selection, and evaluation of the performance of,

principals and supporting leadership staff.

Testing, counseling, guidance and student wel-

fare.

Physical facilities, safety and security.

3la

7.7 Supportive relationships between such schools

and groups and institutions in the community and

in government.

(Stip. 106)

107. Thus in agreeing in Section 15.1 to find and provide

financial resources “adequate for implementation of the

desegregation plan,” the United States was agreeing to help

pay for a plan that would include educational components in

racially isolated schools (§2.2)24 covering the subject matter

outlined in §7, in the development of which the Board would

exercise discretion (§3.1). (Stipulations 101-06)

108. Circumstances surrounding entry of the Consent

Decree indicate that a joint and mutual obligation was con-

templated. The Consent Decree represents the only instance in

which a major urban school system has agreed, without any

litigation or determination of liability issues, to develop and

implement a system-wide desegregation plan under court su-

pervision. It contemplated that because of the demographics of

the Chicago school system, a substantial number of minority

children would inevitably remain in racially isolated schools,

requiring the extensive and expensive use of compensatory

educational remedies to alleviate the effects of past segregation.

In 1980 (as now) Board was faced with massive financial

deficits, and the joint funding provision of the Consent Decree

reflected recognition that Board’s finances were such that it

could not voluntarily agree to develop, or successfully to

implement, an effective desegregation plan of this type unless

the federal government were sharing the financial burdens.

(Stipulations 101-56; June 1983 Findings and Plan/ADR data

on Board finances )

24As well as in magnet schools (§ 4.1.2) and desegregated

schools ( §§ 10.1 and 10.4).

32a

109. Stated simply, the parties had a common and over-

riding goal of assuring that an effective desegregation plan was

developed and implemented in Chicago. This joint purpose,

with respect to financing, included a requirement that the

parties provide the total mmount of funds adequate for

implementation of the Plan. In Section 15.i each party agreed

to do everything possible to supply the necessary funding.

(Stipulations 101-56; June 1983 Findings and Plan/ADR data

on Board finances) The United States’ financial commitment

under Section 15.1 was the principal guid pro quo for Board's

willingness to forego litigation and develop the Plan. In return

for that commitment, the United States secured the full result it

sought (and may not otherwise have achieved) without the

expense and delay of complex litigation. The United States

also avoided potential liability for a number of counterclaims

that would have been brought against it. ( Findings 103, 105)

110. With respect to “what the parties reasonably ex-

pected at the 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 ase.

All the extrinsic evidence concerning this issue does not support

any notion that there was a recognized specific dollar /imitation

incorporated in Section 15.1, based on the amount of previous

ESAA grants or otherwise. Indeed the Joint Stipulation reflects

the parties had been discussing “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

BEST AVAILABLE COPY

33a

the Department of Housing and Urban Development.”?5 As

points to an obligation to conduct a “universal search” (567 F.

Supp. at 282 n.6), not a limited examination of what ESAA

funding was theoretically availabie to Board. (Stipulations

101-06; Government Exhibits | and 2 in the June 1983

hearing ) This does not of course mean the parties contemplated

issuance of a blank check to Board by the United States. But

given the circumstances of the negotiations, Board’s known

financial difficulties, its inability to generate funds without the

approval of other governmental agencies, the known major

problems (and hence major costs) of implementing a desegre-

gation plan in a school system as large as Chicago's (and with

its racial mix), and other relevant factors, the parties’ reason-

able expectations should certainly have embraced the potential

need for the United States regularly “to find and provide” sums

of the magnitude represented by Board's proof at the current

hearing. Although this Court ruled in limine (prior to the

current hearings) certain areas of proof by the United States

would be excluded, this Court has nevertheless given full

consideration to (a) the United States’ offer of proof suggested

by this Court as the means to complete the record and (b)

Board's post-hearing response to that offer of proof. Even

taking that offer of proof fully into account ( rather than treating

it as excluded) this Court finds nothing in the United States’

proof or proposed proof persuasively refutes the reasonableness

28 Moreover, Stipulations 101-02 and the extrinsic evidence

offered by the Government, in the form of its correspondence file,

reflect that in the spring of 1980, the former counsel representing a

former Board were preoccupied with the potential amount of an

ESAA grant that might be generated if the parties could agree on the

specific parameters of a student assignment plan. However, after a

a sharply different direction, leajing to agreement on a general

funding principle not incorporating any previous specific discussions.

34a

of the expectations referred to in this Finding. Given the

parties’ Joint Stipulation that Section 15.1's “general obligation

... would be interpreted and applied as appropriate in whatever

future circumstances might arise,” this Court finds the current

circumstances make the interpretation of that obligation to

embrace the Board's current request (as modified by this

opinion) to be wholly appropriate for funding by the United

States.

111. The Consent Decree in this case is the only instance

in which the United States has entered into a desegregation

settlement containing the same or substantially similar lan-

guage to that in Section 15.1. (Stip. 107)

Development of Part I of the

Pian, the Educational Components

112. To develop the Educational Components of the Plan,

Board retained a team of independent, nationally recognized

consultants. Dr. Robert L. Green was the Lead Consultant,

with principal overall responsibility for the process. Dr. Green

(now the President of the University of the District of Colum-

bia) was then Dean of the College of Urban Development,

Michigan State University. He was a leading national expert on

desegregation plans, especially the aspect of desegregation that

emphasizes educational programs to provide equal and effec-

tive education for urban and minority children. Dr. Green had

participated in many desegregation cases and desegregation

plans, traditionally as an expert for the plaintiffs in such

litigation, and frequently on behalf of the NAACP. (Stip. 108)

In addition to Dr. Green, five other education experts from

outside the school system were retained on a full-time basis to

work on the Educaticnal Components, along with 24 part-tine

“national consultants.” Professor Ronald Edmonds (who has

since died) was the primary national consultant in the area of

curnculum. While on the faculty of the Harvard Graduate

35a

School of Education, Dr. Edmonds had directed the well-

known major research project, Search for Effective Schools:

The Identification and Analysis of City Schools That Are

Instructionally Effective for Poor Children. Professor Edmonds

had also implemented his “effective schools” design as the

principal instructional officer for the New York City schools,

with the title of Senior Assistant for Instruction.

113. Board's complete list of desegregation project con-

sultants is 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

Judson Hixson, M.A., Staff Associate

Educational Director on Leave

Chicogo Urban League

Chicago, Mlinois

Jodi Martinez-Martin, Ed.D., Consultant

Teacher Education Specialist

Illinois State Office of Education

Springfield, Iinois

36a

Frances S. Thomas, Ph.D., Consultant

Assistant Professor

College of Urban Development

Michigan State University

East Lansing, Michigan

Primary National Consultants

Curriculum:

Staff Development:

Professor Ronald Edmonds

Senior Assistant to the

Chancellor for Instruction,

NYC Public Schools

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

Stanford University

Stanford, CA

Ms. Norma Barnes

Norma Bamies Assoc.

Chicago, IL

Dr. Sainuel Bstances

Northeastern Illinois

University

Ciicago, IL

Dr. Duane Brown

University of North Carolina

Chapel Hill, NC

Dr. Josue Gonzalez

Office of Education

Washington, DC

Dr. Robert J. Griffore

Michigan State University

East Lansing, MI

Dr. James Hawkins,

Superintendent

Benton Harbor Public Schools

Benton Harbor, MI

Ms. Maureen Larkin

Milwaukee Public Schools

Milwaukee, WI

Dr. Robert Crain

Johns Hopkins University

Baltimore, MD

Ms. Jane Creeden Dore

Freelance Editor/ Writer

Chicago, IL

Dr. Joseph Darden

Michigan State University

East Lansing, MI

Dr. Harold Dent

Westside Community Mental

Health Center

San Francisco, CA

Dr. Edgar Epps

University of Chicago

Chicago, IL

Dr. Reynolds Farley

University of Michigan

Ann Arbor, MI

Dr. Walter Farrell

University of Wisconsin

Milwaukee, WI

(Stip. 109)

37a

Dr. Jane Mercer

University of California

Riverside, CA

Dr. Margaret Parsons

Michigan State University

East Lansing, MI

Ms. Rachel Patrick, J.D.

American Bar Association

Chicago, IL

Dr. Diana Pearce

Center for National Policy

Review

Washington, D.C.

Mr. Joseph Rosen

Educational Consultant

Chicago, iL

Dr. Charles Thomas, Supt.

School District #64

North Chicago, IL

Ms. Rebecca Yarlott

Minneapolis Public Schools

Minneapolis, MN

114. During the development of the Educational Com-

ponents from November 1980 through March 1981, Board

submitted monthly progress reports to the Department of

~— Justice, as required by the Consent Decree. (Stip. 110)

115. Dr. Green submitted his Recommendations on

Educational Components to Board April 3, 1981. Two weeks

38a

later the Recommendations were adopted by Board as Part I of

the Desegregation Plan: Educational Components. Part I’s

content is summarized by its Table of Contents:

A. Introduction

B. Educational components

Curriculum and Instruction—Elementary Schools

Curriculum and Instruction—High Schools

Magnet Schools

Vocational and Technical High schools

Special Education and Testing

Bilingual Education

Within-School Segregation

Student Discipline

rrr PP He}

Staff Development

D. Other Components

1. Public Participation

2. Metropolitan Initiatives

3. Faculty Desegregation and Affirmative Action

4. Evaluation

5. Monitoring

E. Appendix

(Stip. 111)

116. The following statements about Plan costs appeared

at pages 17 and 19 of the “Financial Aspects” section in Part II

of the Plan, adopted in April 1981:

1. Cost and Funding of the Plan. Due to the relatively

short time available under the Consent Decree for devel-

opment 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.

39a

2. It has not yet been possible to determine the

financial feasibility of the programs i.e., the administrative

details of the programs, the exact costs associated with the

various elements of the plan, the extent to which these

costs can be met from existing resources or require new

funding, and the availability of such new funding.

~ * *

While the exact costs of the educational components

. are not yet known, the Board believes that the core level of

funding required to make reasonably effective those

educational components directed to Black and Hispanic

schools remaining racially isolated is $40 million annually

in fiscal years 1982 and 1983, and $20 million annually

thereafter (although additional funding would be strongly

desirable ).

(Stip. 112)

117. Before the Consent Decree, Board’s desegregation

programs were administered by a staff of three persons. Shortly

after the initial adoption of the Educational Components,

Board created a special Office of Equal Educational Opportu-

nity (“OEEO”) to coordinate the implementation of the Plan.

OEEO is presently headed by Dr. Nelvia Brady, Associate

Superintendent, who was a member of Dr. Green’s original

desegregation planning staff. OEEO’s office staff has expanded

continuously since 1981 and presently comprises 53 persons, of

whom eight are clerical staff, eight are teachers (who are

district-assigned ), 13 are school-committee representatives and

24 are teachers (7) and administrators (17) assigned to the

central office. Twenty-nine of the 40 education professionals

(72.5%) have their principal responsibilities in the area of

implementing the Educational Components of the Plan.

(Stip. 113)

40a

Statements of the United States and this

Court Relating to the Educational Components

118. On June 3, 1981 Attorney General William French

Smith delivered an address before the American Law Institute.

In discussing the policy of the United States as to desegregation

remedies, 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 opportu-

nity. Mandatory busing is not an effective educational

remedy, and in many cases it has also proven counter-

productive. 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 reas-

signment 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 Desegre-

gation Plan, filed in July 1981, the United States made the

following comments 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):

4la

This principle is based squarely on common sense

and Supreme Court holdings. The method of com-

pliance with this objective is largely within the dis-

cretion of the Board, which has the expertise in

educational methods.

(b) After a brief summary of the Educational Com-

ponents, the United States stated (at 22) that “the

Government endorses” them.

the United States said (at 32-33):

The Educational Components have been more

fully developed than the student assignment prin-

ciples. 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 work-

ability of voluntary desegregation techniques and that

they will contribute to bringing about equality of

educational opportunity in the one-race schools which

remain under the final plan.

(Stip. 115)

120. On August 28, 1981 the United States and Board

submitted their Joint Statement to the Court as to the devel-

opment of the Plan. With respect to the Educational Com-

ponents, the Joint Statement (at 5) informed the Court that

the Board and the United States are in agreement in these

general respects: ... (2) the Educational Components are

an integral and necessary aspect of the Board’s Plan. They

are consistent with the Consent Decree and the Con-

stitution. The United States fully endorses the Educational

Components from a legal perspective, although it views the

42a

particular educational policy choices as within the Board’s

discretion.

(Stip. 116)

121. On September 27, 1981 Assistant Attorney General

William Bradford Reynolds delivered a speech to the Educa-

tion Commission of the States, meeting in Chicago. In dis-

cussing the policy of the Department of Justice concerning

desegregation remdies, 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 curricu‘um 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 educatio-

nal 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 prog-

rams to enhance the quality of education provided in those

schools in order t© guarantee equal educational opportu-

nity 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 educatio-

nal quality in the schools, and implementation of those

plans began this fall.

43a

By concentrating our attention and resources on teach-

ers 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 coopetative and

united effort can be mounted to rid our Nation’s public

schools of the tragic legacy of racial discrimination, I am

confident that, in time, we will be able to review that effort

against the test of experience, and say with pride “it

worked.”

(Stip. 117; Bd. Ex. 77)

122. In school year 1981-82 Board submitted quarterly

progress reports to the United States and to the Court, detailing

the process of implementing the Plan, including the Educatio-

nal Components. (Stip. 118)

123. In February and March 1982, following the adoption

of Board’s Comprehensive Student Assignment Plan, the Court

entertained briefs concerning the compliance of the total Plan

with both constitutional requirements and the Consent Decree.

The United States Assessment of the Plan commented on the

Educational Components as described in Finding 139. The

Chicago Urban League’s Assessment of the Plan expressed

strong concern about the need to provide significant extra

funding for implementation of the Educational Components in

racially isolated schools:

The provision of extra funds — and therefore re-

sources — to schools which are to remain racially isolated

is a form of compensation intended to make up in part for

44a

the system’s failure to remedy all manifestations of segre-

gation. This component of the Plan is extraordinarily

important because the majority of the system’s schools are

to-remain segregated under the Board’s proposal ....

The Chicago Urban League believes the notion of

compensatory funding requires that racially isolated

schools receive extra funding above and beyond what

other schools may be receiving ....

The Urban League went on to express concern that Board had

only committed itself to provide “Milliken II relief” to the

extent that funds are available. NAACP’s July 1981 memo-

randum on the Plan stated “we have no specific objection to the

content of these programs.” NAACP’s March 1982 brief did

not comment further on the Educational Components. (Stipu-

lations 119, 133)

124. On January 6, 1983 this Court issued its opinion

(“Opinion I,” 554 F. Supp. 912) approving Board’s Plan as

being clearly within the broad range of constitutionally accept-

able plans. With respect to the Educational Components and

funding, Opinion I stated (id. at 926):

Educational Components. As already indicated, the

Educational Components of the Plan were in definitive

form well anna 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 organi-

zations 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 constitution

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

4Sa

master of its own fate. If and to the extent other

governmental bodies and agencies that control the pursest-

rings 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 con-

frontation, will occur.

(Stip. 120)

125. Board’s 1983 Annual Desegregation Review, Part I

(filed April 15, 1983) contained a section on “Financial

Aspects” at 402-23, 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,

nding specifically budgeted for this component of the

gregation 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 desir-

able 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 expensitures for 1983-84

described above, additional resources would also be highly

desirable to maximize the effectiveness of the Desegrega-

tion Plan. Such additional funding would help to strength-

en 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

46a

educational programs, initiation of interdistrict transfer

programs, to name only a few.

Resources. The resources necessary to fund desegre-

gation 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 appropria-

tions for 1983-84 of at least $57 million — a continuation

of the amounts it re geno for the current school year. To

the extent addition are made available, the

pean carling my them to bring the aggregate levels of

nditures for racially identi 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 tly premature.

However, it may be fairl > hag that for 1983-84 the

— faces budget problems of an extremely serious

agnitude. Preliminary projections eee | it is facing a

calee deficit in the range of $200 million

In an death tb Bead SEDI te Rin ton

instance, obligation to provide these additional re-

sources 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

ing 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 forthcom-

ing.

(Stip. 121)

126. Board's statements as to the desired expenditure of at

least $40 million on the Educational Components in racially

isolated schools and on the desired expenditure of additional

amounts for these purposes, including the statements described

in Findings 116 and 125, do not reflect any determination by

47a

Board either that the expenditure of $40 million would be

“adequate” for that aspect of the Plan (ia terms of Section

15.1) or that the expenditure of additional amounts for that

aspect of the Plan would not materially aid its success or would

not be necessary for its full implementation. (Stipulations 101-

21; Parts I, II and III of the Pian)

127. In August 1983 Board filed Part II of its 1983 Annual

Desegregation Review, a 416 page document that reported in

detail on the implementation of the Educational Components

(“ADR II"). After the filing of ADR II this Court provided the

United States and the amici curiae the opportunity to file

comments. Neither the United States nor any of the amici filed

comments with the Court. (Stip. 122)

128. As the preceding review of the record reflects, the

United States (a) strongly supported (indeed, insisted upon the

inclusion of) Board's Educational Components as the devel-

opmental process moved from the Consent Decree principles to

the April 1981 Educational Components Plan to approval by

this Court and (b) raised no subsequent objection as Board

proceeded to add programmatic details to those initial docu-

ments. Only when called upon to fulfill its financial responsi-

bility did the United States begin to renege on its approval.

(Stips. 101-22, 133)

Overview of the Student Assignment Plan

129. Under the Consent Decree Board agreed to adopt a

system-wide desegregation plan with two basic objectives.

Section 2.1 called for creating the greatest practicable number

of stably desegregated schools, considering all the circum-

stances in Chicago. As already described, the second objective

was to provide educational and related programs for schools

that remained racially isolated. (Stip. 123)

. | its Comprehensive

Student Assignment Pian, all schools in the

school system into four broad categories. First of those

30%.* As of October 1981 those three types of schools emcom-

passed 67 schools with an enrollment of $2,067 students?’

(Stip. 124)

131. Next the Plan considers the category of the desegre-

gated school: one whose enroil/ment includes at least 30% white

established primarily by student assignment techniques under

the Plan. That category includes both (a) schools that have

previously achieved stably desegregaied status through the

implementation of various student assignment measures (as of

1981, 42 schools with 20,329 students) and (b) schools that in

1981 were yet to achieve desegregated status, through pre-

viously existing and newly adopted student assignment tech-

niques (in 1981, 33 schools with 17,541 students). Such

techniques include voluntary transfer programs and magnet

and magnet-type programs within schools. (Stip. 125)

2* Two other sub-categories are also identified: (a) sable mixed

schools having a small but relatively constant enrollment of white

children and (b) schools whose enrollment composition is currently

racially mixed but is projected to become racially identifiable.

*? All the enrollment data in Findings 130 through |34 excludes

pre-school and kindergarten children.

49a

132. In addition the Plan describes various magnet-type

schools, which are established primarily in minority commu-

nities and are designed to promote desegregation by special

educational offerings and programs. Each such school has a

target enrollment composition, generally 15-35% white, 65-85%

minority. In 1981 such schools included 41 magnet schools,

28,824 students. (Stip. 126)

133. Finally the Plan also considers schools projected to

remain racially identifiable ( with an enrollment of greater than

70% minority children, less than 30% white children). In 1981

there were 354 such schools, enrolling 275,794 students. After

describing why those schools cannot practicably be desegre-

gated, the Plan describes the compensatory educational

arrangements that will be provided for at those schools and the

various voluntary transfer arrangements ir which students

enrolled at those schools may participate. (Stip. 127)

50a

134. This table summarizes the school types identified in

the Plan, and the number and enrollment of the schools:

1981

Number Enr.2

Integrated Schools:

Stably integrated ................ccsesceesseeeseees 42 31,791

Integrated schools stable but projected

to become MiIXed ...............cceseeeseeeees 11 7,697

Integrated schools with potential for

IID ecccisanciensipnneinnnsntsinshtenrssenesianiains 14 12,579

DIN istiisitintinniccicinsinccncvendbadinbidiniadeinnhs 67 52,067 :

Schools Desegregated and To Be Desegre- :

gated: |

Schools presently desegregated ........... 42 20,269 :

Schools to be desegregated .................. 33 17,541 |

Magnet schools .............csccssssssssseseseseees 29 16,765 :

Scholastic Academies - 1982 ..............+ 6 2,406 |

Metropolitan High Schools - 1982 ....... 6 9,653 :

pn EE aN eur neeOeOEe 116 66,634 :

Predominantly Minority Schools: :

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

Mixed with potential for racial

CE siiscctinnnnnciinnntnninnvinsinammmnangmnies 20 14,695

Schools more than 85% minority ......... 320 249,618

II sinisctihinsensinsinteitiatdttilinitcnmninninets 354 275,794

Special Needs/Special Admissions:

Physically handicapped, apprentice,

adult education, bilingual centers,

juvenile detention and pregnant stu-

GE ccenienvernnpaeinnatinniiinithinigimns: 43 9,173

p ERROR TRIE EM Met sen oats Cea PIF nee ee 580 403,668

(Stip. 128)

28 All enrollments excluding 39,221 preschool and kindergarten

children. Twenty-five child-parent centers omitted.

Sla

135. Two mandatory requirements were established by the

Plan. One was that every school achieve by October 1983 a

minority enrollment of at least 30%. Under the other, by

October 1983 the school system as a whole had to achieve a

minimum total enrollment in all integrated and desegregated

schools (including magnet schools). This latter requirement is

generally referred to as the “desegregation index” requirement.

(Stip. 129)

136. Additionally the Plan sets forth other student assign-

ment provisions to be applied throughout the school system to

provide and maintain the maximum practicable desegregation

and to ensure that the Plan will not initiate or authorize any

segregative actions. Among such provisions are those con-

cerning school closings, boundary adjustments and within-

school segregation. (Stip. 130)

137. In a separate volume, the Student Assignment Plan

contains school-by-school analyses for each school in the sys-

tem. Those analyses describe in summary terms the work and

consideration that went into developing a desegregation strate-

gy for each school. They also provide a detailed statement as to

why it is not practicable to desegregate a large number of

schools remaining racially identifiable. (Stip. 131)

138. Detailed evaluation of the student assignment com-

ponent of the Plan, including analysis of enrollment comi-

position and prescription of specific actions for over 200

individual schools, is undertaken every year. Each such

evaluation is reported on in an Annual Desegregation Re- view

(“ADR”). (Stip. 132)

139. After the adoption of the Comprehensive Student

Assignment Pian in January 1982, the United States filed its 33-

page Assessment of the Plan. It explained the United States’

belief that the Plan is constitutional and consistent with the

Consent Decree. In conclusion the United States stated:

52a

We believe that, for the reasons stated in these

comments, once the plan has been thoroughly imple-

mented and the Educational Components completed, the

Board will have: (a) provided a system-wide remedy with

compensatory programs at remaining segregated schools,

(b) established the greatest practicable number of stably

desegregated schools, (c) insured that all racial and ethnic

groups participate and (d) distributed the benefits and

burdens of the plan on a fair basis.

(Stip. 133)

140. In Opinion I (554 F. Supp. 914-15) this Court

incorporated the Board’s summary of its extensive and effective -

activities in the 18 months from the entry of the Consent Decree

to the adoption of Part III of the Desegregation Plan. This

Court further noted it had deferred ruling on the Plan for

several months, so that the promises of the Plan could be

“test{ed] in the crucible of reality.” In light of the fall 1982

implementation results, this Court found “nothing in the execu-

tion of the Plan has been shown to disprove the premises on

which it was designed” (id. at 915). Finally, having reviewed

the Plan in detail, this Court approved it as being “clearly

within the broad range of constitutionally acceptable plans”

(id. at 928). (Stip. 134)

141. In April 1983 the Board’s Annual Desegregation

Review (Part I, Student Assignment) (“ADR I’) showed that

(a) implementation of the Plan during school year 1982-83 was

a considerable success and (b) to a very significant degree its

projections of student assignment outcomes had been realized.

ADR I was also candid in its assessment of shortcomings and in

adopting measures to address them. (Stip. 135)

142. In its May 1983 response to ADR I, the United States

favorably evaluated the Board’s substantive implementation

process (at 1-2, 4-5):

The Chicago School Board’s April 19, 1983, filing on

its first Annual Desegregation Review is an extremely well-

53a

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 clari-

fication, for ail invoived, 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 thinx 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 other-

wise fail to take the steps necessary to fulfill the plan’s

promise, the plan’s present constitutional sufficiency would

suffer. At this point, we have no reason even to suspect

that this is a possibility.

(Stip. 135)

143. As Finding 135 reflects, the mandatory requirements

of the Student Assignment Plan became applicable as of

October 1983. While the formal evaluation of the results of the

Plan in the 1983-84 school year is not yet due to be filed, Board

filed a Report Concerning Preliminary Fall 1983 Enrollment

Data on November 2, 1983, informing this Court that the

requirement of 30% minimum minority enrollment in all

schools had been met. (Stip. 137)

144. For comparison with Finding 134, the following table

shows fall 1983 data as to the number and total enrollment of

the various school types identified in the Plan. Those data are

comparable with Finding 134, but it should be noted that there

has been some recategorization of schools to reflect the ex-

perience of the past two years. As in Finding 134, the figures

54a

exclude kindergarten students; therefore the total enrollment

shown is for grades 1-12, 41,260 students less than systemwide

enrollment.

1983

Number Enr.2°

Integrated Schools:

Stably integrated ....................cccccscccseeees 47 36,569

Integrated schools stable but projected

IIS ccccnincmnseencienens 4 2,009

Integrated schools with potential for

I i sieitacienchintnnirtarnincstentiennttonins 4 5,033

iii tihnnrneicancatesdettaniaannaitiemenananannninnt 55 43,611

Schools Desegregated and To Be

Desegregated:

Schools presently desegregated ........... 77 42,382

Schools to be desegregated .................. 0

Magnet schools ..................scccceeseseeeseeees 33 19,155

Scholastic Academies 5 3,092

Metropolitan High Schools .................. 6 10,302

RENE EEE ES: eee 121 74,931

Predominantly Mixority Schools:

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

Mixed with potential for racial

IE plschidensienintiuteenpinatnninbehshaniinsinnanens 10 8,065

Schools more than 85% minority ......... 334 =248,161

Subtotal ... ane 361 268,909

Special Needs/Special Admissions:

Physically handicapped, apprentice,

adult education, bilingual centers,

juvenile detention and pregnant stu-

IB aiicitecciciicnnbiinesibllicinhlitindnsicchibteaniabinniiinies 43 5,331

WE aidan thaniaibeshinntstadnpatiniatinitaicitinighienniienathadaaan 580 392,782

(Stip. 138)

29 All enrollments excluding 39,221 preschool and kindergarten

children. Twenty-five child-parent centers omitted.

55a

Demographics of the City of Chicago

and the Chicago Public Schools

145. Extensive demographic information is presented in

both the Comprehensive Student Assignment Plan (at 8-39)

and in 1983 ADR I (at 20-23). (Stip. 139)

146. Racial composition of the total population of the City

of Chicago from 1940 to 1980 is summarized in the following

table:

White Non-White Total

Year No, ® No. q 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

schools from 1970 through 1983 is presented in the following

table:

Chicago Public Schools

Racial/Ethnic Composition 1970-1983

See chart in Supplemental Appendix, p. S-1

(Stip. 141)

148. One principal reason the proportion of minorities is

higher among public school students than among the overall

city population is that a large number of children (more than

half of whom are white) attend nonpublic schools in Chicago,

especially the Catholic parochial schools. Their metropolitan-

area enrollment of nearly 190,000 students makes the Catholic

schools the fifth largest school system of any kind in the United

S6a

States. Within Chicago the Catholic schools as of 1982 had 226

schools enrolling 114,299 students, of whom 56% were white,

25% black, 16% Hispanic and 3% Asian. (Stip. 142)

149. Total membership in the Chicago public schools has

leveled off this year after 15 years of decline that were often

characterized by very substantial drops. This year’s decline in

total membership is only about 1800 (0.4%), compared with

almost 19,000 (3.9%) in 1980. As a historic matter, enrollment

was 372,278 in 1952. Student membership increased quite

dramatically in 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 greatest declines between

1977-81 (over 15,000 students, or 3-4%, per year). In 1982 the

decline was 1.6% (7046 students ), as contrasted 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 since

adoption of the Plan. From 1977-81 white enrollment declined

at 9-11% per year (or 10,000-12,000 students). In 1982 white

enrollment declined 6% (4,941 students) and in 1983, 5%

(3,342 students). (Stip. 144)

151. Black students now number 263,163 (60.6% system-

wide). As with total enrollment and with white students, 1983

decline in black enrollment of 1,367 students (0.5%) is signifi-

cantly lower than declines of 2-4% in the preceding “ve years.

(Stip. 145)

152. In contrast to white and black enrollment, Hispanic

enrollment 1. the school system has been increasing steadily

since 1970, at the rate of 3-6% annually. Hispanic students now

number 91,763 (21.2% systemwide). (Stip. 146)

57a

153. Board's demographers believe the enrollment

changes summarized in Findings 149-52 can be attributed to

the following factors:

Demographics: continued effects of changes in the number

of births, in- and out-migration, and the patterns of student

distribution among grades.

Economics: recent high unemployment rates which have

curtailed ability to pay tuition for private schools and

reduced job opportunities for potential high school drop-

outs; 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; increas-

es in achievement scores; and greater parental and commu-

nity involvement through programs such as report card

pick-up and Adopt-A-School.

(Stip. 147)

154. During the past two years of relatively stable enroll-

ments, an important factor contributing to changes is the

transfer rate between public and nonpublic schools. As the

following table reflects, the Chicago public schoo!s have been

gaining 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

| | 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)

58a

155. It appears the recent trend of enrollment decline in

the Chicago public schools has ended this year. Gradual

increases can be expected to begin next year, if the general

demographic trends ( particularly migration and transfer rates )

experienced in the recent past continue in the years to come.

Such a development would point to increased demand for

teachers and school facilities. As to racial/ethnic composition,

the school system is expected to increase in minority enrollment.

This is partly because of the greater proportion of whites in the

upper grades, combined with continued outflow, and the higher

birth rates for minority groups ( particularly Hispanics ) coupled

with continued immigration of Hispanics.

(Stip. 149)

156. Racial/ethnic composition of the elementary and

secondary levels of the school system as of October 1983 is

detailed in the first table following Finding 157. These data are

briefly summarized as follows:

See tables, Supplemental Appendix p. S-2 and S-3.

(Stip. 150)

157. Racial/ethnic composition of the Chicago public

schools by grades is detailed in the second table following this

Finding. In brief summary the data reflect higher proportions

of minority students in the lower grades. For example, minority

enrollment is 75-80% in grades 11 and 12, and 85-86% in first

grade and kindergarten. (Stip. 151}

See table, Supplemental Appendix p. S-4.

59a

158. There are presently 407 schools with enrollments

more than 70% black and/or Hispanic (excluding magnet

schools ):

No. of Total

ai __ = =

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

are 275,091 students (69.4% of systemwide enrollment) attend-

ing schools more than 90% minority. (Stip. 152)

159. Schools with more than 70% black and/or Hispanic

enrollment will increase in number in coming years, as a result

of the demographic and transfer trends described in Findings

145-57. (Stip. 153)

160. In schools with enrollments more than 90% black

and/or Hispanic, 1983-84 total kindergarten and pre-school

enrollment is as follows:

Ké&

% Minority 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 school

year 1984-85, and will probably increase. Kindergarten stu-

dents represent approximately two thirds of this total, or 20,000

students. (Stip. 154)

60a

161. In schools with more than 90% black and/or Hispa-

nic enrollment, the number of black and Hispanic children in

grades 1-3 in school year 1983-84 is approximately as follows:

Grate | — 1 ..—_]

l 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 $1,512 13,383 64,895

Those numbers are projected to be at least as great in school

year 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 effects

of racial segregation on minority children; the nature and types

of desegregation programs that are capable of eliminating or

alleviating those effects; the design, development and

implementation of the Plan; and the ability of federal Chapter |

and State Title I eligible programs to alleviate the effects of past

segregation. She is presently Associate Superintendent, OEEO,

and has primary responsibiliy for implementation of the Plan.

( Brady testimony )

202. Dr. Brady was one of the experts with principal

responsibility for drafting the Educational Components of the

Plan. (Brady testimony)

203. In April 1981 Board adopted the Recommendations

on Educational Components ‘ prepared by its nationally known

expert, Dr. Green). Those Recommendations accurately ex-

plain the justifications for educational components:

The rationale for this approach lies in the notion that

the desegregation of a school system involves much more

6la

than the reassignment of students. Too often, desegrega-

tion 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 pre-

occupation 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

——. tion of students by race and ethnic

always accompanied by disparities in

the “educational "services provided minority “and

nonminority students, and by significant g in the

achievement of minority stud¢ ots, particularly 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 ee Sas = goa Se she Se

educational desegregation of individual students. The

educational disadvantages from past ra-

cial/ethnic isolation —- or any such isolation that may have

to continue — must be remedied. a

this plan is to address minority students’ educa nev ds

arising from the tion of the public schools. The

method being is through improving achievement

in all schools, emphasis on those schools

with the greatest and attended by children who have

been the most disadvantaged.

( Brady testimony )

204. Dr. Brady described elements of the Plan that have

been implemented to date and provided an evaluation of

Board's efforts in this area. In general that portion of her

testimony addressed both the student assignment aspects of the

Plan and the elements of the educational components of the

Plan as to which implementation has already been initiated.

She also discussed the elements Board intends to implement in

school year 1984-85 if there is sufficient available funding.

62a

More specific testimony as to the implementation status of the

Curriculum, Bilingual and Vocational/Technical Education

components was provided by Drs. Gerald Heing, Josue Gon-

zales, and Philip Viso, respectively (Testimony of Brady,

Heing, Gonza!*s and Viso)

205. Dr. Brady showed Board has experienced significant

successes in its implementation efforts to date. Her testimony

was supported by evaluations performed during \*> last two

years ai the 45 racially isolated targeted elementary schools that

were first included in the Chicago Effective Schools Project.

( Brady testimony )

206. Dr. Brady’s testiniony described the process by which

the Plan was designed and developed. She related how past

segregation in the Chicago public schools has affected the basic

‘earning skills achievement levels of children, particularily mi-

nority children now attending, or who in the future will attend,

racially identifiable minority schwols. She explained each com-

ponent of the Plan is (a) carefully designed to alleviate the

effects of past segregation and (b) will substantially further

implementation of a successful desegregation plan. She further

graphics of Chicago, full and successful implementation of the

Educational Components is crucial to the success of the Plan.

( Brady testimony )

207. In substantial part the Educationai Components are

intended to eliminate or alleviate the effects of past racial

segregation on minority children who will remain in racially

who will attend such racially identifiable schools in the future.

In pursuit of this goal, the Plan also addresses the need for

systemic and institutional changes in the manner in which the

school system provides educational services. (Brady testi-

mony )

63a

208. Minority children now attending Chicago public

schools suffer, or have been affected by, one or more of the

following effects 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;

identifiable schools by teachers and administrative

staff,

(d) less access for minority children to vocational and

technical educational programs;

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

(f) the psychological pressures of attending racially iden-

tifiable 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 environ-

ment in which they must ultimately compete;

(i) lack of interpersonal learning experiences derived

from open association with other students of varying

(j) lack of access to majority culture, which is ref ed in

the standards that determine success in society.

(Stip. 155, Brady testimony. )

209. This broad spectrum of inequalities and injuries

resulting from racial isolation cannot be remedied only by

student assignment, even where student assignment is available.

It requires other remedies, particularly compensatory educa-

64a

t.onal remedies, where student assignment is unavailable.

( Brady testimony )

210. OEEO, in conjunction with other Board departments

and units, developed the programs described in Board Ex. 28.

OEEO was primarily responsible for developing the following

program eiements:

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 Personne! Services and Special

Education was primarily responsible for developing the Special

Education and Discipline program elements. Its Department of

Vocational and Ter’inical Education was primarily responsible

for developing the Vocational and Technical Education pro-

grams elements. Its Department of Curriculum and Instruction

was primarily responsible for developing the curriculum pro-

gram elements. Its Department of International and Multicul-

tural Education was primarily responsible for developing the

bilingual program. Its Department of Research and Evaluation

was primarily responsible for developing the program to eval-

vate the results of Plan implementation. (Brady, Viso, Heing

and Gonzales testimony )

Zil. Board’s original version of proposed Board Trial Ex.

28 was provided to the United States on or about September

16, 1983. (Response to Board’s Second Set of Requests to

Admit, No. 28)

65a

212. Dr. Brady reviewed each program ix Board Ex. 28

and testified each program was designed to implement the

Educational Components of the Plan, would significantly alle-

viate the effects of past segregation and was necessary for a

successful desegregation effort in Chicago. She described how

each program element was developed, how each works or is

expected to work and how each relates to one or more of the

Plan’s Educational Components. She testified each of those

program elements materially aids successful implementation of

the Plan by alleviating the effects of past segregation. Her

testimony also explained how the cost of each element was

calculated. This Court has considered in detail (a) Board’s

proof on an item-by-item basis (including all submitted Exhib-

its and this Court’s own notes 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 the hearing and as filed in a post-

hearing memorandum April 20, 1984) and (c) Board’s detailed

post-hearing response filed April 30. In so doing this Court has

applied the standards taught by the Liddell and Arthur cases

discussed in the Conclusions. Ii has paid close attention to

drawing the line between programs that will materially aid

successful implementation of the Plan and those that have a

more generalized primary focus of improving the quality of

general education in the school system. Except to the extent

reflected by these Findings and Conclusions, Board’s last

response to the United States’ argument as to “specific failures

of proof contained in the Board’s presentation” is wholly

persuasive, and the objections of the United States are therefore

rejected.

213. In school years 1981-82 and 1982-83, implemestation

of the Plan’s Educational Components included the in-

troduction and implementation of Effective Schools Project

(“ESP”) programs at 45 specially targeted racially identifiable

schools and the implementation of certain elements of the ESP

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program at other racially identifiable schools. The 45 specially

targeted schools are:

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

10 Frazier

ll Donoghue

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District School

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)

2i4. Those target schools were selected from among all

racially identifiable schools in the system on the basis of a -

comparative need evaluation. First, all racially identifiable

schools were ranked lowest to highest based on achievement

test scores in reading and math, with a double weighting for

reading, over a two-year period. In addition, attendance and

student mobility statistics and the extent of racial isolation were

taken into consideration in the ranking process. That process

produced a ranked list of the lowest-achieving most racially

identifiable schools in the system, and the 45 lowest on the list

were chosen as target schools. (Brady testimony )

215. For school year 1983-84 the complete ESP program

was continued at the 45 target schools and implemented for the

first time at the 62 additional racially identifiable schools

(including 7 educational vocational guidance centers) listed

below:

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Gale Academy

Marti Bilingual Education Center

Byrd Academy

Jenner Elementary

Mulligan Elementary

Howe Elementary

Avondale Elementary

Norton E.V.G.C.

Nobel Elementary

Piccolo Middle School

Ryerson Elementary

L. Ward Elementary

Wright Elementary

Anderson E.V.G.C.

Chopin Elementary

Koscuiszko Elementary

Otis Elementary

M. Clark Middle School

DePriest Elementary

Ericson Elementary

Roetgen E.V.G.C.

Spencer Elementary

Bethune Elementary

Hammond Elementary

Howland Elementary

Lathrop Elementary

Pope Elementary

Spry Elementary

Brown Elementary

Grant —

Irving Elementary

McKinley E.V.G.C.

Medill Intermediate &

Upper Grades

dies fs a Tee

69a

School

Gregory Elementary

C. Hughes Elementary

McCormick Elementary

Webster Elementary

Abbott Elementary

Drake E.V.G.C.

Mayo Elementary

Copernicus Elementary

Fulton Elementary

Dyett Middle

Hope Community Academy

Ross Elementary

Terrell Elementary

Dulles Elementary

Mollison Elementary

Price Elementary

Woodson North Elementary

O’Toole Elementary

Bass Elementary

Goethals E.V.G.C.

Kershaw Elementary

Low Upper Cycle

Bryn Mawr Elementary

Revere Elementary

J.N. Thorp Elementary

J.N. Thorp E.V.G.C.

Aldndge Elementary

Carver Middle School

Kohn Elementary

(Board Exs. 30 and 112; Brady testimony)

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216. Those 62 additional schools chosen to participate in

the full ESP program in school year 1983-84 were selected

through the same means initially used to select the 45 target

schools. Using the formula stated in Fnding 214, all racially

identifiable schools in the system were again listed in order in

the fall of 1983, with the lowest-achieving most racially identi-

fiable school ranked first. After the 45 targeted schools already

participating in the ESP programs were deleted from the list (as

automatic continuing participants), the 62 lowest ranking

schools remaining on the list were selected for implementation

of the full ESP program in school year 1983-84. (Brady

testimony )

217. Implementation of the full ESP program at those 62

schools is possible only because of the $20 million appropria-

tion to Board pursuant to the Yates Bill (discussed in later

Findings), which provided only a one-year appropriation of

funds. Board currently lacks the financial resources to continue

the ESP programs at those 62 schools in school year 1984-85.

(Brady and Glasper testimony)

218. Board Exs. 28, 31, 32, 110 and 117 accurately

describe the full ESP programs implemented at 107 racially ,

identifiable Chicago public schools. Those ESP programs were

implemented in school year 1983-84 in accordance with the

Plan set forth in Board Ex. 30. ( Brady testimony)

219. Implementation of the full ESP program at the 107

schools in school year 1983-84 has not involved duplication of

other desegregation programs previously placed in those

schools, which Board is continuing to implement. Implementa-

tion of the full ESP program at those 107 schools and at an

additional 100 racially identifiable Chicago public schools in

school year 1984-85 will involve only minor duplication of

already existing desegregation programs in those schools.

( Brady testimony )

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220. Board’s essential purpose for its ESP program is to

improve instructional effectiveness in racially identifiable

schools in order to improve educational outcomes for black and

Hispanic children. That means improving achievement levels,

attendance, discipline and the likelihood of a student’s success-

fully moving to the next school level or into society in general.

This is accomplished by programmatic interventions addressing

six major areas: instructional emphasis, including increased

time on task; leadership; use of assessment data; parental

support and involvement; general school climate; and staff

development and training. Among the elements of the ESP

program designed to increase a student’s time on task are

extended-day and extended-year instruction, and full-day kin-

dergarten instruction. (Brady testimony )

221. One of the major goals of the ESP program, as

described in Board Exs. 28, 31, 32, 110 and 117, is to reduce the

gap in achievement levels between national grade level norms

and the achievement levels of minority children now attending,

or who will attend, racially identifiable schools in the system.

( Brady testimony )

222. “Effective schools” as a concept is based on educa-

tional research that suggests if the proper learning conditions

are created, all children, regardless of their race and the racial

composition of the school they attend, can learn. “Effective

schools” as a model is an important structure for ensuring

implementation of effective educational remedies at racially

identifiable schools. It serves as a primary focus for implemen-

tation of the Plan’s Educational Components, particularly those

in curriculum-related areas. Board’s “Effective Schools Pro-

ject” 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 is a local, school-specific program that provides staff with

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the specialized skills necessary effectively to implement the

Plan’s educational remedies. Each school’s teaching staff is or

will be receiving training intended to eliminate unequal treat-

ment of minority pupils by raising each staff's awareness of its

possible racial biases and by modifying any biased attitudes,

expectations and behaviors toward the teaching of minority

pupils. Each school’s teaching staff also is or will be receiving

training designed to develop the specialized skills, instructional

methods and educational techniques necessary effectively to

teach and to increase the academic achievement of minority

pupils who must remain in racially identifiable schools. Each

ESP school’s inservice component is directed toward instructing

staff in meeting the particular educational needs of minority

pupils and in adapting existing instructional approaches to meet

those needs successfully. (Brady testimony )

224. Board’s ESP program described in Board Exs. 28, 30,

31, 110 and 117, as implemented in 107 racially identifiable

schools in school year 1983-84, materially aids the successful

implementation of the Educational Components of the Plan.

That ESP program eliminates or alleviates the effects of racial

segregation on minority children in that it raises the achieve-

ment levels of minority children, ends the unequal treatment of

minority children in racially identifiable schools by teachers and

administrative staff, and reduces the psychological pressures of

attending racially identifiable schools and the resulting loss of

self-esteem. (Brady testimony )

225. Implementation of the ESP program in the 45 racially

identifiable target schools in school years 1981-82 and 1982-83

has raised the median level achievement scores of minority

children as described in Board Exs. 36, 37 and 38 (as substi-

tuted and modified by Board Ex. 91). (Brady testimony)

226. To close the existing gap in grade level norms and

achievement levels between students in integrated schools and

Leone Ell <r

Up ae ae

73a

minority students attending racially identifiable schools, it will

be necessary to implement the full ESP program in the 45

original target schools for another 3 to 5 years and in the 62

additional racially identifiable schools for another 4 to 6 years.

( Brady testimony )

227. With adequate funding, Board would continue to

implement the full ESP program in those 107 schools in school

year 1984-85. In addition, it would implement the full ESP

program in the next 100 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’s testimony, sets forth the projected cost of implementing

a full ESP program in 207 racially identifiable schools for

school year 1984-85. Those cost figures are reasonable under

the circumstances shown at trial. (Brady testimony; Glasper

testimony )

229. Board Ex. 28, as modified by Board Ex. 117 and Dr.

Brady’s testimony, sets forth the estimated cost in school year

1984-85 of implementing certain components of the ESP pro-

gram at racially identifiable schools (“Level III schools”) not

participating in the full ESP program. Those projecied cost

figures are a reasonable estimate under the circumstances

shown at trial. If the estimate of $10 million were to prove

inaccurate, the figures could be adjusted by reducing the United

States’ payment to Board in a subsequent year. (Brady

testimony; Glasper testimony )

230. Board Ex. 31 sets forth the amount Board expects to

spend in school year 1983-84 for implementing certain com-

ponents of the ESP program at the 100 Level II racially

identifiable schools not currently participating in the full ESP

program. Those projected cost figures are reasonable under the

circumstances shown at trial. (Brady testimony; Glasper

testimony )

74a

231. To implement the Educational Components of the

Plan, Board must at a minimum implement certain components

of the ESP program at both the 100 Level II schools and the

Level III schools. Such components to be implemented at the

nonparticipant racially identifiable schools are those that re-

quire full-day kindergarten at each of those schools, the use of

extended-day and extended-year instruction, and the inservice

training of staff at those schools. For the reasons stated in

Finding 224, implementation of those components of the ESP

program at racially identifiable schools not participating in the

full ESP program will materially aid the successful implemento-

tion of the Educational Components of the Plan. (Brady

testimony; Glasper testimony; Board Ex. 117)

232. With adequate funding, Board would implement a

full ESP program at the 100 Level II schools. Such full

implementation would materially aid successful implementa-

tion of the Educational Components of the Plan for the reasons

stated in Finding 224. Board's cost of such implementation in

school year 1984-85 would be as shown on Board Ex. 117 and

would be reasonable under the circumstances. Full implemen-

tation at those schools would reduce the cost of implementing

certain ESP components at racially identifiable schools not

participating in the full ESP program to approximately $10

million. (Brady testimony; Board Ex. 117)

233. Board Ex. 28 represents an initial estimate, prepared

in August and September of 1983, of the cost and budget

breakdown of the program components (and the program

elements) designed materially to aid the implementation of the

Plan (Brady testimony). Board Ex. 117 was prepared by the

OEEO staff, under the direction and supervision of Dr. Brady,

in response to requests made by the United States and this

Court during the course of this hearing. Board Ex. 117 reflects

the cost in school year 1984-85 of implementation of the full

ESP program at 207 schools and the partial implementation of

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the ESP program at all other racially identifiable schools

( Brady testimony). It also reflects:

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

(b) consideration of the fact that the detailed line-by-line

budget breakdown by cost category for certain of the

program elements differs slightly from that initially set

forth in Board Ex. 28;

ments set forth in Board Ex. 28 were funded in part in

school year 1983-84 by Board incremental desegrega-

tion 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 in school year 1983-84 with moneys appropriated by

the Yates Bill, Board Ex. 117 contains three columns of

numbers: the first representing the line-by-line budget break-

down of costs as set forth in Board Ex. 28; the second

representing those portions of program elements actually

funded in 1983-84; and the third representing the amount

required to implement those programs in school year 1984-85.

(Brady testimony) With respect to program components

funded in school year 1983-84 with incremental Board funds,

Board Ex. 117 contains four columns of numbers: the first

representing the line-by-line breakdown of costs as set forth in

Board Ex. 28; the second representing those portions of prog-

ram elements actually funded in school year 1983-84; the third

783

representing the amount required to implement those programs

in school year 1984-85 (after consideration of non-recurring

costs; and the fourth representing the amount Board will not be

able to fund from its own resources in school year 1984-85,

despite its good faith efforts. ( Brady testimony)

234. Board's Trainers Institute program is intended to

build within the Chicago public school system the internal

capacity to provide inservice training to teachers and staff for

implementation of the Student Assignment Plan and the

Educational Components, and generally for the education of

minority children in racially identifiable schools. That Institute

will materially aid successful implementation of the Plan. It

will eliminate or alleviate the effects of racial ser gation on

minority children in that it will assist the raising of their

achievement levels and help end the unequal treatment of

minority children in racially identifiable schools by teachers and

administrative staff. ( Brady testimony )

235. With adequate funding, Board would fully imple-

ment the Trainers Institute in school year 1984-85. Board Ex.

117 sets forth the projected cost of implementing the Trainers

Institute in 1984-85. That cost is reasonable under che circum-

stances. ( Brady testimony; Glasper testimony )

236. Board's Management Information System is intended

to establish and maintain a comprehensive information system

to collect, analyze, review and disseminate data related to all

desegregation activities under the Educational Components and

the Student Assignment Plan. That System materially aids

successful implementation of the Plan by tracing and measuring

progress in achieving the goals of the Plan. Board Ex. 117 sets

forth the projected cost of the System. That cost is reasonable

under the circumstances. (Brady testimony; Glasper testi-

mony )

77a

237. Board's Equity Compliance program described in

Board Ex. 28 is intended t\ .manage program expenditures,

gather OEEO statistical data, carry out desegregation reporting

lish means to measure and assess compliance with the Plan.

Each component of that program will materially aid successful

implementation of the Educational Components of the Plan.

Certain aspects of the program were implemented in school

year 1983-84, as detailed in Board Ex. 31 and 117. Its cost of

implementation in school year 1984-85, as set forth in Board

Ex. 117, is reasonable under the circumstances. ( Brady testi-

mony; Glasper testimony )

238. Board's systemwide Staff Development program for

racially identifiable schools, described in Board Ex. 28, 5

intended to provide staff with the information and skills

necessary to implement effectively the Plan's educational com-

ponents. Through twelve major conferences, staff from all

racially identifiable schools will receive a general overview in

many desegregation-related areas, including the requirements

of the Plan, and methods of ensuring equal educational

opportunity in a racially identifiable school. Specific topics

encompassed in those conferences will address mulu-cultural

awareness and teaching approaches, effective discipline tech-

niques, classroom management and instructional strategies to

raise minority pupils’ academic achievement. Ceneral staff

development provided through the program is intended to

introduce staff to problems in implementing the Plan, and to

increase staff's effectiveness in dealing with the problems ad-

dressed. (Brady testimony)

239. Board's Staff Development program for the racially

identifiable schoois will materially aid successful :mplementa-

tion of the Plan. It will eliminate or alleviate the effects of

racial segregation on minority children in that it will assist

78a

teachers in raising the achievement levels of the children and it

will help in ending the unequal treatment of minority children

in racially identifiable schools by teachers and staff. Its

consultant component is required to hire specialists to conduct

inservice training conferences. Those consultants are necessary

to implement the Staff Development program. Board Ex. 117

sets forth the projected cost of the program for school year

1984-85. That cost is reasonable under the circumstances.

( Brady testimony; Glasper testimony )

240. Board’s systemwide Staff Development program for

Desegregated Schools, described in Board Ex. 28, is intended to

provide staff with general information and an overview of skills

necessary to effectively implement the Plan’s student assign-

ment and educational components. Staff from desegregated

schoois will receive training in many areas, including the

requirements of the Plan, multi-cultural awareness and teaching

approaches, effective discipline techniques and classroom man-

agement in a desegregated setting. That program will mate-

rially aid the successful implementation of the Plan. It will

eliminate or alleviate the past effect of racial segregation on

minority children now attending desegregated schools by assist-

ing teachers in raising their achievement levels. It will also

assist in the effective implementation of the Plan by raising staff

awareness of and eliminating its unequal treatment of munority

pupils in desegregated schools. As set forth in Board Exs. 28

and 117, the cost of that program is reasonable under the

circumstances. (Brady testimony; Glasper testimony )

241. Board’s Within-School Segregation Program is in-

tended to gather information about the racial composition of

classrooms and to monitor the assignment of students to

classrooms within particular schools. That program will mate-

rially aid successful implementation of the Plan. It will

eliminate or alleviate the racial segregation of students in

classrooms through, for example, forms of “tracking” or “‘abili-

ty grouping.” It will accordingly ensure that students are

79a

actually taught, insofar as is practicable, in a physically desegre-

gated environment. Board Ex. 117 sets forth the cost of the

program for school year 1984-85. That cost is reasonable under

the circumstances. (Brady testimony; Glasper testimony )

242. Board’s Magnet Schools programs, described in

Board Ex. 28, are intended to construct new magnet schools,

develop and expand special curriculum offerings at certain

racially identifiable schools, and provide inservice training and

staff development at 150 magnet schools and magnet programs.

Specialized curriculum offerings or magnet programs will be

introduced or expanded at racially identifiable “community

academies” as part of the special educational improvements

and remedies required by the Plan. Staff training and advisory

services are necessary and will materially assist staff in planning

and developing the expanded curriculum offerings and in

successfully introducing them in racially identifiable schools.

Except as stated in Finding 243, the Magnet School programs

described in Board Ex. 28 will materially aid successful

implementation of the Plan. Board Ex. 117 sets forth the cost

of those programs for school year 1984-85. That cost is

reasonable under the circumstances. (Brady, Glasper, Viso

testimony )

243. Board did not demonstrate the proposed Residential

Magnet High School would have sufficient marginal utility (on

the testimony it would serve only about 200 students), in

relation to its more than $9 million cost, so as to justify a

finding the school wiil materially aid successful implementation

of the Plan. By way of contrast, although the proposed

Agricultural Magnet High School is also challenged by the

Unisxed States as insufficiently related to the purposes of the

Fian, the testimony establishes that school would meet a

demonstrated need and serve minority students in a manner

that meets the standard stated in Finding 242. That is also true

of all the other Magnet School programs.

80a

244. Board’s Staff Development Program at the 150

magnet schools and magnet programs, as referred to in Finding

242, is intended to meet school specific needs related to the

particular school’s curriculum, including maintaining the con-

sistency of the magnet program with systemwide standards,

training teachers in instructing students in the special magnet

program offering, and planning, developing and refining the

magnet program to maintain its quality. That program also will

train staff in multicultural awareness, teaching approaches and

classroom management in a desegregated school. Its purpose is

to enhance the likelihood that magnet schools and magnet

programs will develop and maintain the quality curriculum and

school climate necessary to attract a desegregated student body.

( Brady testimony )

245. Each component of the Staff Development Program

referred to in Findings 242 and 244 is directly related to the

Plan and will materially aid its successful implementation by

raising minority pupil achievement, eliminating unequal treat-

ment of minority pupils, and achieving and maintaining physi-

cal desegregation in school populations. With adequate fund-

ing the Board would implement those components of its magnet

school program in school year 1984-85. Board Ex. 117 sets

forth the cost of implementing those components in school year

1984-85. That cost is reasonable under the circumstances.

( Brady testimony; Glasper testimony )

246. Board’s Special Education/Testing program de-

scribed in Board Ex. 28 is intended to implement and, as

required by the Plan, to validate proce durzs designed to ensure

non-discriminatory assessment and placement of students in

educable mentally handicapped classes. Consultants and in-

service programs are necessary to provide Board staff with the

skills to evaluate whether its current assessment procedures are

accurate and race neutral. In addition the Special Educa-

tion/Testing program is intended *> provide transition services

;

8la

and special educational support for students who were pre-

viously placed in mentally handicapped classes, based upon

potentially biased assessment instruments, and who are now

being returned to the regular classroom. Inservice training is

required to provide teachers and other staff with awareness of

and the skills to deal with such students’ special educational

needs during the period of their transition to the regular

classroom. (Brady testimony )

247. All components of the program described in Finding

246 will materially aid Board’s implementation of the Plan. It

will eliminate or alleviate the effects of racial segregation on

minority pupils by assisting their return to regular classrooms

and thus raising their achievement levels, and it will help end

the unequal assessment and placement of minority pupils ‘n

special education classes. Its cost for school year 1984-85, as set

forth in Board Ex. 117, is reasonable under the circumstances.

( Brady testimony; Glasper testimony )

248. Board’s Vocational and Technical Education Prog-

ram, as described in Board Exs. 28 and 116, is intended to

provide vocational educational information to staff and stu-

dents, to recruit minority students for vocational education

classes, to provide vocational educational support services for

minority students, and to expand and adapt vocational educa-

tion program offerings to increase the opportunity for minority

students to participate in vocational education programs. In-

service training and consultant services are required to acquaint

teachers with vocational education opportunities open to minor-

ity pupils, to improve the staff's skills and capabilities effec-

tively to provide vocational education services to minority

students, and to assist staff in planning, developing and effec-

tively providing additional vocational program offerings to

students. These inservice and consulting components are

directly related to the Plan and will materially assist in

implementing its Vocational and Technical Education program.

( Brady testimony; Viso testimony )

82a

249. Except as stated in Finding 250, the components of

the Vocational and Technical Education program will mate-

rially assist the Board in implementing the Plan. They will

alleviate or eliminate the effects of past segregation in vocatio-

nal and technical education programs by various activities

intended to end the unequal participation of minority students

in these programs. Their respective costs for school year 1984-

85, as set forth in Board Ex. 117, are reasonable under the

circumstances. (Brady testimony; Viso testimony; Glasper

testimony )

250. One component of the Vocational and Technical

Education program testified to by Dr. Viso (the Handicapped

component) cannot fairly be included in the cost of the Plan for

current purposes. On the present record it lacks a sufficient

nexus to the purposes of the Plan — as compared with the

general goal of improving the overall quality of education.

Though in its post-hearing submission Board stated that blacks

represent a higher percentage of EMH students in the system

(about 81%) than their percentage of total school enrollment

(about 61%), no testimony established what percentage EMH

students were of the total “Handicapped” group that could be

assisted by the program. Thus the test of materiality is not

satisfied. This is simply a matter roof, and to the extent such

.«#proof may be sharpened in subsequent years the item may

“perhaps be allowable. This Court of course recognizes that

most of the other Vocational and Technical Education com-

ponents also involve estimates, but each of those estimates is

sufficiently reasonable (and not effectively challenged by the

United States) to satisfy Board’s burden of proof. In any case

Board will be fully accountable for its use of funds, and to the

exteut there may prove to be any over-allocation as to any item

based on actual experience, adjustments in the United States’

payments to Board can be made in future years.

83a

251. Board’s Department of Curriculum activities related

to its Plan needs, as described in Board Exs. 28 and 114, are

intended to ensure that curriculum offerings are consistent with

the goals of the educational components and modified and

refined to meet those goals. Desegregation-related activities in

the Department of Curriculum will include, planning, devel-

oping and implementing the special curriculum improvements

required by the Plan’s Educational Components, coordinating

those improvements and monitoring their consistency with

systemwide educational goals, maintaining the curriculum and

course quality of the special educational programs required by

the Educational Components. All inservice and advisory

components of those programs are necessary to provide Board

staff with the information and skills to plan and provide

effectively the various curriculum development and implemen-

tation activities necessary to achieve the overall goals of the

educaiional components. ( Brady testimony; Heing Testimony )

252. Except as stated in Finding 253, the components of

the Curriculum and Instruction program will materially assist

the Board in implementing the Plan by raising the achievement

levels of minority students and maintaining or enhancing the

quality of curriculum designed to raise the achievement of

minority students. Board Ex. 117 sets forth the cost of

implementing these curriculum and instruction agtivities in

school year 1984-85. That cost is reasonable under the

circumstances. (Brady testimony; Heing testimeny; Glasper

testimony )

253. “High School Renaissance,” as described in Dr.

Heing’s testimony, was not sufficiently distinguished from

Board’s ordinary goals of system-upgrading to justify inclusion

of that program in Plan costs. Dr. Heing referred to providing

a “strengthened diploma” — of course a commendable goal,

but one that appears clearly on the other side of what is

84a

admittedly not always a bright line distinction between (a)

Plan implementation and (b) general benefits to educational

goals of the school system as a whole.

254. Board’s Student Discipline program, described in

Board Ex. 28, is intended to provide discipline managers in

schools who will enforce the Uniform Discipline Code, provide

training to staff in the provisions of the Code and behavior

modification techniques, develop and operate in-school suspen-

sion and behavior improvement programs as an alternative to

suspension, and monitor and report on disciplinary infractions.

That program will materially assist the Board in implementing

the Plan by eliminating or alleviating unequal disciplinary

treatment of minority pupils. Its cost for school year 1984-85,

as set forth in Board Ex. 117, is reasonable under the circum-

stances. (Brady testimony; Glasper testimony )

255. Board’s Bilingual Education programs, as described

in Board Ex. 28, are intended to assist in achieving the national

origin desegregation required by the Plan. Activities that would

be undertaken include establishing special “immersion”

educational programs to instruct pupils in their native lan-

guages until they can ake the transition to regular classrooms,

developing a special curriculum responsive to the needs of

bilingual students, performing research on the educational

needs of bilingual and limited English proficient students, and

recruiting qualified bilingual teachers. Inservice training and

consulting activities are necessary to provide staff with the skills

to conduct research, plan and develop bilingual and limited

English proficient education programs, and effectively to in-

struct bilingual and limited English proficient students. (Brady

testimony; Gonzales testimony )

256. Except for Statewide Network (which was with-

drawn by Board), each component of the Bilingual Education

program will materially assist Board in implementing the Plan.

Each will alleviate or eliminate the effects of segregation on

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bilingual or limited English proficient students in that it will

assist the raising of their academic achievement and help end

the unequal treatment of and unequal educational opportunities

available to those children. Each component’s cost for school

year 1984-85, as set forth in Board Ex. 117, is reasonable under

the circumstances. (Brady testimony; Gonzales testimony;

Glasper testimony )

257. Board’s Evaluation program described in Board Ex.

28 is intended to permit OEEO to collect, analyze and evaluate

information to determine the overall effects of the Plan, as

implemented, and to indicate areas where programs must be

refined or modified to achieve the Plan’s goals. Consultant and

inservice programs are necessary to provide staff with the skills

to conduct this research and evaluate the effects of the Plan.

This Program will materially aid the successful implementation

of the Plan by providing information necessary to continue and

correct implementation of the plan and to reach the Plan’s

goals. Board Ex. 117 sets forth the costs of the Evaluation

Program for school year 1984-85. That cost is reasonable under

the circumstances. ( Brady testimony; Glasper testimony )

258. Inservice training and staff development programs

described in various of Findings 223-57 do not duplicate each

other and do not duplicate other inservice training provided by

Board. Each program-related training or staff development

activity will address specific needs and topics related to the

program it will assist in implementing. Those program-specific

needs will not be addressed to the extent required effectively to

implement the programs in the Educational Components in the

general, systemwide desegregation related staff development

programs operated by OEEO, nor in any other of Board’s

ongoing staff development activities. ( Brady testimony )

259. All costs ( with reference both to the total amount and

to the amount Board is unable to fund despite its every good

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faith effort) of the program elements set forth in Board Ex. 117

are reasonable estimates of the amounts needed to implement

such programs. (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 cost attributable to each program element of Board

Ex. 28 was included therein after consultation beteween the

Budget Office, OEEO and central office administrative personal

responsible for the preparation thereof. (Brady and Glasper

vestimony ) Those projected costs were reviewed and verified by

Board’s Office of Budget and Financial Planning. (Glasper

testimony )

260. Of the $108 million in program components identi-

fied by Board Ex. 28, approximately $6 million is being funded

by Board resources in school year 1983-84. (Glasper testi-

mony )

261. Another $20 million, appropriated by the Yates Bill,

is being devoted to Board Ex. 28 program components during

the second half of the 1983-84 school year. ( Brady testimony )

Board Ex. 31 sets forth those elements of the Educational

Components of the Plan that are being funded by the $20

million appropnated by the Yates Bill. ( Brady testimony)

262. Board Exs. 31, 35, 41 and 113 accurately describe the

desegregation programs and inticipated expenditures of Board

during school year 1983-84. Those include the approximately

$57 million in expenditures for programs continued from school

year 1982-83, the planned approximately $10 million increase

in desegregation expenditures for school year 1983-84 ( further

described in Board Exs. 35 and 113), and the $20 million in

anticipated expenditures resulting from by the Yates Bill ( fur-

ther described in Board Ex. 31). Each of the programs

described in those Exhibits is for adequate implemen-

tation of the Plan and maten aids in the implementation of

the Plan. (Glasper testimony; Brady testimony )

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263. Neither Board Ex. 28 nor Board Ex. 117 makes any

provision for increases in employee compensation over and

above the levels in effect for the 1982-83 school year. They do

not, for example, take account of the 5% salary increase agreed

to by Board and the Chicago Teachers’ Union for the 1983-84

school year or of any such future salary increases that may be

negotiated between Board and its employees. (Glasper testi-

mony )

264. Set forth after Finding 265 is a chart that reflects the

adjustments to Board Ex. 28 made by Board Ex. 117 (as

described in Finding 233) and that reflects the 5% salary

increase*®® implemented in school year 1983-84 referred to in

Finding 263. Set forth on the following seven pages are

individual charts that reflect such adjustments made for each of

the program components for which there is more than one

program element: Staff Development, Magnet Schools, Special

Education/Testing, Vocational/Technical Education, Curricu-

lum, Bilingual Educational and Evaluation ( Brady and Glasper

testimony ).

265. As reflected by the attached charts, the level of

funding adequate for full implementation of the Plan in school

year 1984-85 (as modified to reflect Findings 243, 250 and

253) is approximately $171.631 million. Of that amount,

Board has been able to budget approximately $67.773 million,

leaving an increment of approximately $103.858 million that

Board, despite its best efforts, will not be able to fund. For

planning purposes, it can reasonably be assumed that approxi-

mately $171.631 million will be necessary for adequate

implementation of the Plan in subsequent school years. ( Brady

testimony )

See charts, Supplemental Appendix pp. S-5—S-11.

% To reflect this increase, an appropriate adjustment was made

in the teacher salary and career service salary cost categories set forth

in the budget sheets included in Board Ex. 117.

266. Each of the various programmatic elements that, in

their entirety, make up the Student Assignment and Educatio-

nal Components of the Plan materially aids in the desegrega-

tion of the Chicago public schools. (Testimony of Brady, Viso,

Heing and Gonzales) Those programs work together with

Ongoing programs first implemented in earlier school years to

achieve the goals of the Plan’s Educational Components.

( Brady testimony )

267. Prior to school year 1983-84, only certain elements of

the Educational Components had been implemented at the vast

majority of racially identifiable schools and, as a result,

achievement of the Plan's overall objectives has been limited.

Even with the implementation of additional elements this

school year because of the increased Board budget for desegre-

gation and the appropriation in the Yates Bill, many other

elements have yet to be implemented. ( Brady testimony)

268. At this point, school year 1984-85 is the first in which

full implementation of the Plan could occur. In the months that

followed the June 1983 hearing, Board had anticipated that the

resources necessary to implement fully the various components

of the Plan would be made available by the United States for

the 1983-84 school year, so as to make it the first year of full

implementation. As a result, Board Ex. 28 was prepared under

the assumption that each of the various program elements

would be initially implemented in 1983-84. However, only $26

million in new financial resources became available, allowing

for only limited implementation of these program elements.

(Brady and Glasper testimony )

269. Because of the passage of time, full implementation

became impossible in school year 1983-84. Given both the

schedule of these proceedings (including the possibility of an

appeal by the United States) and the nature of the school year

calendar, additional resources could not be received and prop-

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erly devoted to implementation of the programs before the

beginning of school year 1984-85. It is accordingly necessary to

treat school year 1984-85 as the first year of full implementa-

tion. ( Brady testimony)

270. Educational Components of the Plan were intended

to supplement Chapter I programs in racially identifiable

schools where such programs are in effect. If Chapter I funds

were used for desegregation programs, the aggregate effects of

low income status and racial segregation would not be ad-

dressed, and low income minority students would receive less

compensatory programming than contemplated by Chapter I

and the Plan. (Brady testimony; Fagan cross-examination

testimony )

271. There are a substantial number of racially identi-

fiable schools not eligible for Chapter I programs, and even in

those schools eligible for Chapter I programs a significant

number of minority students are not qualified to participate

because their achievement levels, while below grade level, are

not low enough. In short, the latter group of minority children,

and those now attending or who will attend racially identifiable

schools ineligible for Chapter I programs, would be foreclosed

from critical remedial programs designed to alleviate the

educational impact of past segregation that affects each of

them, even if Chapter I funds were used for funding for the

Plan. (Fagan cross-examination testimony )

272. Diverting Chapter | funds to Desegregation Plan

costs would divest low income, educationally deprived students

of the benefits of Chapter | ECIA programs in order to provide

minority students the benefit of the Plan's Educational Com-

ponents. That would offset or neutralize the benefit of the

desegregation remedy and would diminish the aggregate im-

pact of the compensatory and desegregation programs provided

by Chapter | and the Consent Decree. (Brady testimony;

Fagan cross-examination testimony )

90a

Board's Financial .\flairs and Condition,

and the Financial Aspects of School Desegregation

1983-84 Incremental Desegregation Expenditures

301i. As of September 1983 the Chicago public school

system compnised 70 high schools, 442 elementary schools and

oh Seieslis Wi iodine aeaie Gi eahes enaken of

schools of other types (such as special education facilities,

apprentice and trace schools, adult schools and bilingual-

bicultural schools). Enrollment for the 1983-84 academic year

is approximately 434,000 students, As of June 1983 Board

employed nearly 40,000 persons, of whom approximately

27,400 were represented by the Chicago Teachers’ Union and

approximately 9,500 were members of other unions and em-

ployee groups that negotiate with Board. (Stip. 201)

302. Board's budget for school year 1983-84 provides for

appropnations of approximately $1.455 billion for operating

expenditures. (Stip. 202)

303. As part of the $1.455 billion budgeted for operating

expenditures in school year 1983-84, Board budgeted approxi-

mately $67.7 million for incremental desegregation ex-

penditures. After receiving the $20 million appropriated by the

Yates Biil, Board increased that amount to approximately $87.7

million. (Stip. 203)

304. Incremental desegregation expenditures refers to

accounted for by Board by specific three-digit codes. Those

’ tigi ; ies identify a ae om.

penditures by their source or purpose. (Stip. 204)

305. In 1980-81, the year in which the Consent Decree

was entered, incremental desegregation expenditures consisted

of certain student assignment programs accounted for under

Project Code 512 (as described in Finding 306). As Board

expanded implementation of the Plan in each subsequent

Sila

school year, additional project codes were established to ac-

count for the various programs that constituted the components

of such expansion. (Stip. 205)

306. Incremental desegregation expenditures are budgeted

and accounted for by reference to the following three-digit

project codes:

(a) Project Code 512 lations and expenditures

refer to = + ~ consisting of those initial

elements Options for Knowledge student t

peoprame ther were initiated before’ the Conseat Decrec

and are sometimes referred to as the continued “Access to

Excellence” programs. Generally those are magnet schools

and programs and voluntary waneler programs.

(b) Code 163 lations and e¢x-

sie to compenenes

ese ee initially estab-

1981-82, relating to

ised in schol, yea 1981-82, pmany relating 1

racially isolated schools (and in part in 1981-82 to certain

student assignment programs established in that year).

6 aS er sheen =< semen

ton of the Educational t Yo aa

tion of tional Components at racially isola

sheets, Ghee initially established in school 981-82

wey Ps hp a ben wey he State Title I

funds.?"

year 1981-82.

3' Part of the money budgeted by Board for incremental desegre-

gation expenditures is attributable to State Title | school aid. State

Title I aid constitutes that portion of Common School Fund State Aid

(or general state distribuuve aid ) distmbuted to Illinois school distncts

based on the number of economically disadvantaged or “Title |

eligible” students enrolled in each district. Addendum A attached to

these Findings (foilowing Finding 376) descnbes the relauonship

between State Title I school aid and desegregation expenditures.

( Bacchus Testimony )

92a

(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 tr?ining, recruitment,

evaluation acd 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 ex-

penditures refer to components of the Pian funded by the

$10 million increase in Board resources for desegregation

implementation in school year 1983-84.

(h) Project Code 400 appropriations and ex-

penditures 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 Com-

ponents at racially isolated schools. (Stip. 206)

(Bacchus Testimony )

307. Set forth on the following page are incremental

desegregation appropriations and expenditures, identified by

project codes, for school years 1980-81 through 1982-83 and

incremental desegregation expenditures of $87.7 million, also

identified by project codes, Board has budgeted for school year

1983-84. (Stip. 207; Glasper testimony; Board Ex. 41)

Four-Year Deseg Analysis Summary

See tables, Supplemental Appendix pp. S-12—S-14.

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 certain aspects of

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the Plan’s bilingual education components, and approximately

$1.8 million in funds received by Board under Chapter 2 of

ECIA. This latter $1.8 million was equal to the amount of

ESAA funds Board had received before the repeal of ESAA

and the enactment of ECIA and thus constituted that portion of

the ECIA Chapter 2 block grant Board determined to allocate

to implementation of the Plan. All the remaining approxi-

mately $54.5 million was derived from Board resources. (Glas-

per testimony )

309. Resources for the $87.7 million in incremental

desegregation expenditures budgeted for school year 1983-84

are being provided as follows: approximately $65.4 million

from local resources and approximately $22.3 million from

federal resources. (Stip. 208)

310. Of the $22.3 million in federal resources provided to

fund Board desegregation expenditures, $20 million derives

from the Yates Bill, $1.8 million derives from ECIA Chapter 2

funds and approximately $.5 million derives from ESEA Title

VII (Stip. 209) !

311. With respect to incremental desegregation ex-

penditures, Board resources budgeted for desegregation

implementation increased by $10 million (or approximately

18%) from the level budgeted for the 1982-83 school year.

Desegregation implementation was the most significant area of

programmatic expansion undertaken by Board for school year

1983-84. (Stip. 211; Glasper testimony;, Bacchus testimony )

312. All the increase in federal resources received by

Board in school year 1983-84 for desegregation implementation

is attributable solely to the $20 million appropriated by the

Yates Bill. (Stip. 212)

1983-84 Ancillary Desegregation Expenditures

313. Incremental desegregation expenditures do not in-

clude expenditures, referred to as ancillary desegregation ex-

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penditures, that are made by Board to implement the desegre-

gation plan but are not identified by specific project codes and

not included in the $87.7 million amount set forth in Finding

307. Included within ancillary desegregation expenditures are

the costs of all “quota” or “formula” teachers at magnet and

magnet-type schools. For school year 1983-84 the cost of such

teachers is approximately $20 million. Also included in ancil-

lary desegregation expenditures are the costs of providing the

basic systemwide (or “formula”) level of supplies and instruc-

tional equipment at magnet schools, scholastic academies and

metropolitan high schools. (Glasper testimony )

314. Also included in ancillary desegregation expenditures

are the costs related to student transportation for the Disney

Magnet School. This cost is approximately $1.6 million for

school year 1983-84.

315. Also included in ancillary desegregation expenditures

are various central office and field administrative expenditures

relating to the implementation of the Plan. (Brady testimony;

Glasper testimony )

316. Ancillary desegregation expenditures are expected to

continue at approximately the 1983-84 level in future school

years. (Brady testimony; Glasper testimony )

317. Board does not contend that (a) these ancillary costs

should be included in the calculation of the amount required for

fuil implementation of the Plan or (b) the United States should

be responsible for funding all or a portion of such costs.

However, these costs further emphasize that Board has devoted

a substantial amount of its total resources to the implemenia-

tion of the Plan. .

1983-84 School Budget— Board Resources and Expenditures

318. Evidence as to Board’s present and projected finan-

cial condition was presented through the testimony of Board’s

chief financial and business officers (J. Maxey Bacchus, Board’s

95a

Business Manager, and Rufus Glasper, its Director of Budg-

eting and Financial Planning) as well as through various Board

budget documents.

319. Board Ex. 43 is the Board’s annual school budget for

1983-84, which contains summary tables of Board revenue and

expenditures for the 1983-84 school year budget. (Stip. 216)

320. Board’s four primary sources of operating revenue

are local property taxes (34.6%), state school aid (45.6%),

federal educational assistance (13.8%), personal property re-

placement taxes (3.8%) and miscellaneous (2.2%). (Stip.

217)

321. Rates at which Board can levy taxes for its four

general operating 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 General Assembly and not Board. Board is presently

levying taxes for those funds at the maximum rates authorized

by the General Assembly. (Stip. 218)

322. State school aid received by Board is determined by

various formulae prescribed by the School Code, as determined

by the Illinois General Assembly and not Board. (Stip. 219)

323. Federal educational assistance received by Board is

determined by (a) the amounts appropriated by Congress for

various educational programs and (b) the manner in which the

Department of Education and, in certain instances, the Illinois

State Board of Education determine to allocate these resources.

Board does not have contro! over these determinations; its role

is limited to making applications and seeking to meet appli-

cable eligibility and competition requirements. (Stip. 220)

324. Personal property replacement tax revenues are

generated through an income tax on corporations, an income

tax On partnerships and a tax on the invested capital on certain

public utilities. Those tax revenues are collected by the State of

96a

Illinois and distributed to local taxing districts, including Board.

(Stip. 221)

325. Personal: property replacement tax revenue collec-

tions are a function of the rates in effect for such taxes, as

prescribed by the Illinois General Assembly. Personal property

replacement tax revenues distributed to Board are determined

pursuant to a formula prescribed by the General Assembly.

Board does not have control over those decisions. (Stip. 222)

326. In sum, as this Court said in Opinion I, Board “‘is not

the master of its own fate”. 554 F. Supp. 912, 926. Except for

its own tax levy, which has no available increment, Board’s

revenues are wholly determined by other governmental bodies

and agencies, particularly the State of Illinois and the United

States. To the extent Board has limited discretion over the

amount of its revenues, such as the discretion to levy taxes up to

a maximum amount permitted by state statute, Board has

exercised such discretion to maximize its revenues. (Stip. 216-

22; Bacchus testimony; Board Ex. 155))

327. While Board has a limited ability to generate new

resources, the United States, by sharp contrast, has the full

capability of generating new resources or increasing existing

resources. However the United States has not done so ( and has

in fact taken extensive steps to limit the availability of funds for

desegregation implementation). (Board Ex. 57; Findings 401-

67)

328. Of $1.455 billion in total Board operating ex-

penditures budgeted for school year 1983-84, approximately

$1.162 billion (or approximately 75%) is budgeted for employ-

ee compensation, including pension and fringe benefits. Aill

elements of employee compensation are subject to negotiation

between Board and the various employee groups with which it

engages in collective bargaining, including the Chicago Teach-

ers’ Union. Employee compensation levels cannot be deter-

mined unilaterally by Board. (Stip. 223)

97a

329. Of the same $1.455 billion, approximately $91 mil-

lion is budgeted for food and utilities, approximately $33

million for repair and rehabilitation of school buildings and

approximately $23 million for payment of tuition for handi-

capped children who cannot be served in the public schools.

That tuition rate is set by the State Board of Education, not

Board. In the aggregate the various expenditure components

described in Findings 328-29 represent approximately $1.309

billion, or 90% of Board’s budgeted 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 Joint House and Senate Chicago Board of Education

Investigation Committee. Its most immediate cause, however,

was Board’s inability to engage in short-term borrowing. As a

result it suffered a severe cash shortfall. It was forced to decide

which of its obligations would be paid in timely fashion and

which would of necessity be delayed in payment. By the latter

part of December 1979 Board was virtually without any

available cash. Governor Thompson convened a meeting in

Springfield in early January 1980 to address Board’s financial

crisis. Participants at that meeting agreed to a multi-faceted

plan, including (a) adoption of the School Finance Authority

Act (the “‘Act”’), leading to the creation of the Chicago School

Finance Authority (“Authority”); (b) a three-phased financing

plan to provide funds for Board (which plan was fully imple-

mented during 1980); and (c) imposition of certain financial,

legal and structural changes upon Board, including (i) the

reduction in Board’s educational fund tax rate from 2.11% to

1.61% of equalized assessed valuation, (ii) the appointment of

a chief financial officer who has responsibility for preparing and

supervising Board’s budget and financial plan and who reports

directly to Board and (iii) the expiration on April 30, 1980 of

98a

the terms of office of all Board members who held office on

January 16, 1980. (Stip. 225)

Relationship to School Finance Authority

331. Authority is a five-member body whose members are

appointed by the Mayor and Governor and are not subject to

approval by the General Assembly. It was created to serve two

basic functions: (a) to exercise financial oversight and control

over Board; and (b) to issue bonds and notes to provide

financing for Board. It is to remain in existence until one year

after the date that all bonds and notes it has issued are paid in

full. It is currently anticipated Authority’s obligations will not

be fully paid until 2009, so that it will remain in existence until

2010. However, as discussed in the last paragraph of this

Finding, it is likely many of its powers will be suspended before

that time.

Financial Control and Oversight Powers. The most signifi-

cant powers and responsibilities (and the corresponding duties

imposed upon Board) are in the following areas:

(A) Budgets: Authority must approve or reiect Board’s

annual budget for each fiscal year. Each budget must contain

such information and detail as Authority may prescribe and

must be based upon the revenue estimates Authority approves

or prepares. Board must submit its budget to Authority at least

45 days before the beginning of the fiscal year to which the

budget relates, and Authority is required to approve or reject

Board’s budget within 30 days of its receipt. Standards are

established by the Act for Authority’s review of the budget. It

states Authority shall approve any budget it believes to be

complete, reasonably capable of being achieved and consistent

with the Financial Plan then in effect. Under the Act Authority

does not have line-item veto powers over the budget — it must

either accept or reject the budget in its entirety. Following the

adoption of a budget for a fiscal year, Board must notify

Authority of any material change in its revenue or expenditure

ee ee ee

epetbisietes seme eee eee

99a

estimates for that year. Based on such changes Board may

submit, or Authority may require Board to submit, a

supplemental budget, or Authority may require Board to take

other actions.

(B) Balanced Budget: Board is required to have a

balanced budget in accordance with the accounting system and

procedures Authority prescribes. Authority has promulgated

regulations to govern Board’s preparation of its annual budget

and provide a framework for the determination of what

constitutes a “balanced budget.”

approve or reject Board’s Financial Plans. Each Financial Plan

must cover a period of at least three fiscal years. It must

contain a description of revenues and expenditures, provision

for debt service, cash resources and uses, and capital improve-

ments for each fiscal year covered. Authority has promulgated

regulations setting forth the type of information and detail that

must be contained in each Financial Plan. In connection with

approving each Financial Plan, Authority must approve, reject

or amend Board’s revenue estimates. It may also review

Board’s operations and obtain budgetary data and financial

statements. In general, Authority has a right of access to all

information in Board’s possession that it deems relevant. Au-

thority also may issue recommendations or directives to Board

to assure compliance with Financial Plans and may require

Board to submit modified Financial Plans based upon revised

revenue or expenditure estimates or for any other good reason.

In the absence of a budget and Financial Flan that Authesity

has approved, the Act prohibits Board from making any

expenditures other than for payment of its debt service obliga-

tions. Authority’s regulations, as amended, require Board to

submit each Financial Plan to Authority on or before the May |

before the first fiscal year to which the plan relates. Thus the

Financial Plan for fiscal years 1984-85 through 1986-87 was

due May I, 1984.

100a

(D) Contracts: Authority has the power to adopt and

amend regulations identifying categories and types of contracts

and other obligations of Board that shall be subject to Author-

ity’s approval and the procedures for submitting contracts for

approval. Authority shall approve those contracts if, in its

judgment, the information required to be submitted is complete

and the contract is consistent with Board’s budget and Finan-

cial Plan then in effect. Authority has adopted regulations

setting forth the types of contracts for which its approval will be

required. They include collective bargaining agreements, con-

tracts involving an amount in excess of $10 million, contracts in

excess of $1 millicn involving the disposition of real property

and contracts creating an obligation to repay borrowed money.

(E) Chief Financial Officer: Authority has the power to

approve the appointment of and to remove Board’s Chief

Financial Officer.

(F) Accounting and Auditing: Authority may direct

Board to reorganize its financial accounts, management and

budgetary systems in whatever manner Authority deems appro-

priate to achiev~ >~eater financial responsibility and efficiency.

Authority ?'so has t.* power annually to approve Board’s

appointr.ent of certified public accountants to audit Board’s

finance al statements.

(G) Cash Management: Avshority is authorized to

require Board to establish and maintain separate cash accounts

and separate bank accounts in accordance with such rules,

standards and procedures as Authority may prescribe. Author-

ity also may assume exclusive administration of Board’s cash

accounts and bank accounts and withdraw funds from such

accounts for Board’s lawful expenditures.

Duration of Powers: Authority will retain the power to

approve or reject Board’s budget and the power to examine its

business records and audit its accounts for as long as Authority

remains in existence. However, other powers of Authority set

;

idla

forth above (including without limitation the power to review

and approve Financial Plans and contracts and to require

Board to appoint a Chief Financial Officer) become suspended

upon certification to the Mayor and Governor that Board has

completed three successive fiscal years with a budget balanced

in accordance with standards prescribed by Authority. How-

ever the Act also provides the suspended powers will be

restored upon Authority’s certification that Board has failed to

adopt a balanced budget or failed to achieve a balanced budget

for two s

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