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U.S. v. BD. OF EDUC. OF CITY OF CHICAGO

United States District Court, Northern District of Illinois, E.D


October 15, 1985

UNITED STATES OF AMERICA, PLAINTIFF,
v.
BOARD OF EDUCATION OF THE CITY OF CHICAGO, DEFENDANT.

The opinion of the court was delivered by: Aspen, District Judge:

            PRELIMINARY MEMORANDUM OPINION

INTRODUCTION

The dispute over the Consent Decree in this unique desegregation case returns to the district court for the third time. The case is here, assigned to a new judge, following the Seventh Circuit's second opinion in the case. See United States v. Board of Education of Chicago, 744 F.2d 1300 (7th Cir. 1984) ("Second Opinion"), cert. denied, ___ U.S. ___, 105 S.Ct. 2358, 86 L.Ed.2d 259 (1985). Although the United States won the appeal, the Court of Appeals concluded its opinion with an admonition to the United States that its conduct in connection with the case had been less than honorable:

    In the circumstances of this case, we deem it
  important to note that the actions of the
  Executive Branch described above and reflected in
  the hearings below could be interpreted to
  contravene

  the spirit of the Decree. Such actions, while
  perhaps within constitutional limits, cannot
  enhance the respect to which this Decree is
  entitled and do not befit a signatory of the
  stature of the United States Department of
  Justice. The Executive Branch initiated this
  critical litigation and bears a continuing shared
  and special responsibility for its eventual
  outcome, regardless of changes in personnel and
  ideology that will inevitably accompany the
  passage of time.

744 F.2d at 1308. Such conduct continues. The United States continues its hard line approach to its obligations under ¶ 15.1 of the Consent Decree, which provides:

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

Rather than make this "good faith effort," the government has made and continues to make every possible effort to minimize its obligations under ¶ 15.1, even as narrowed by the Second Opinion. In this opinion, we hold that the United States has violated the letter, as well as the spirit, of the Decree.

A consent decree is both an enforceable contract and an order of the court.*fn1 It quickly became clear to this Court that the United States has had little respect for ¶ 15.1, whether viewed as contractual promise or judicial command. As the Court of Appeals implicitly recognized, 744 F.2d at 1308, changes in administration and philosophy since 1980, when the decree was signed, have been largely responsible for generating the conflict in this case. This change in philosophy apparently includes the belief that promises made by previous administrations need not be honored and that court orders need not be followed if they contradict prevailing ideology. If such a belief exists, it will not prevail, as this opinion will explain.

Since receiving the case, the Court has had to quickly learn the complex history of the case, and resolve pre-trial disputes, see 610 F. Supp. 695 (1985); 610 F. Supp. 702 (1985), as the parties feverishly worked to prepare evidence and supporting material for this merits opinion. We appreciate the hard work of the parties and their briefs, which were very long — totalling about 450 pages, not counting the thousands of pages of appendices — but very helpful.

Remarkably, the parties devoted well over 150 pages of their briefs to arguments over what the Court of Appeals meant in the Second Opinion, which itself spanned just nine published pages. Obviously, much of this case hinges on our interpretation of the Second Opinion. Accordingly, before entering our Findings of Fact and Conclusions of Law concerning the evidence submitted by the parties, we set forth first an extensive preliminary opinion, which interprets the Second Opinion, thereby defining the context shaping the Findings and Conclusions which follow.

Technically, pending before the Court is the Board's motion for declaratory and injunctive relief, which essentially alleges that the United States violated ¶ 15.1 of the Consent Decree in many ways in 1984 and earlier years. For the reasons stated in the Preliminary Opinion and the Findings and Conclusions that follow, that motion is granted in large part.

PART I: ANALYZING THE SECOND COURT OF APPEALS OPINION

1. Background

The focus of this remand proceeding is the meaning of the United States' obligation under ¶ 15.1 of the Consent Decree, which is quoted above at 1. In this preliminary chapter of the opinion, we resolve the continuing dispute over which federal funds were "available" to the Board under ¶ 15.1; in the concluding chapters we decide whether the United States has made "every good faith effort to find and provide" these funds, with particular scrutiny on fiscal year 1984.

The Consent Decree embodying the unique funding provision was entered and approved by the Court on September 24, 1980, the same day that the United States sued the Board for allegedly operating racially segregated schools in violation of the Fourteenth Amendment and Titles IV and VI of the Civil Rights Act of 1964. The history surrounding the Consent Decree is detailed at length in previous opinions and repeated in part in Chapter I of our extensive Findings of Fact below. For present purposes, we need only repeat the undisputed proposition that the desegregation plan envisioned by the Decree and the funding provisions of the Decree were unique and pioneering. The Plan ultimately developed by the Board, endorsed by the United States and approved by the District Court, see United States v. Bd. of Education of Chicago, 554 F. Supp. 912 (N.D. Ill. 1983), created a broad range of costly educational programs designed to remedy the effects of past segregation on Chicago's black and Hispanic students. The Plan eschewed forced desegregation methods, e.g. busing, in favor of voluntary desegregation made possible by the Plan's educational programs. The Plan recognized that Chicago's demographics made complete and lasting desegregation impossible. Thus, the Plan as approved by the Court created compensatory educational programs targeted to those schools which would remain segregated. These programs are intended to remedy the past and continuing effects of segregation. See, e.g., Findings of Fact ("Findings") 106-107.

Frustrated by what it considered the United States' unwillingness to help fund the Plan, the Board petitioned the District Court on May 31, 1983, for an order enforcing the funding obligations of the United States under ¶ 15.1. The United States contended that the Decree did not constrain its discretion in the funding process, and that to honor the decree it need only help the Board apply for funds. The Court rejected this argument, embracing the Board's position, which was that ¶ 15.1 unambiguously required the United States to provide available funds to the Board. 567 F. Supp. 272, 282. The Court held that the United States violated ¶ 15.1 by failing to take affirmative steps to find and provide available funds, as well as by working to make funds unavailable to the Board. Id. at 283-85. The United States was obligated, said the Court, to provide presently available funds, to find other available funds, to support certain legislative initiatives and to seek appropriations which could be used to aid the Board's Plan. The Court enjoined the United States from spending certain Department of Education funds until the Board's entitlement to them could be finally determined. Id. at 289.

On appeal, the United States continued to assert that it had no funding obligations under ¶ 15.1. The Court rejected this assertion. Although disagreeing with the District Court's conclusion that ¶ 15.1 was unambiguous on that issue, it affirmed the District Court's alternative holding that the extrinsic evidence supports the conclusion that ¶ 15.1 requires the United States to "go beyond assisting the Board in locating and applying for federal funds, and . . . imposes a substantial obligation on the government to provide available funds to the Board." 717 F.2d 378, 383. However, the Court questioned whether the District Court was correct in concluding that the United States had violated ¶ 15.1 by supporting broad legislative policy decisions which effectively reduced the pool of funds available to the Board. Id. It did not decide this question, though, but instead affirmed the District Court's finding of lack of good faith "on the narrower and more discernible ground" that the lower court had also found that the United States actually had funds available for the Board but had failed to provide them. Specifically the Court referred to the District Court's Findings of Fact 34-35 and 42-43, which had identified the Title IV fund and the "Discretionary Fund" as having available funds. Id. The Court also vacated the remedies ordered by the lower court, holding the "principles of comity" between the judicial and executive branches made it appropriate to let the United States have first crack at proposing how it would comply with its funding obligations, as well as remedy past non-compliance. Id. at 384.

On remand, the United States filed its November 10, 1983 "Plan for Supporting the Desegregation Plan of the Board" ("November 10 Plan"). Ostensibly a plan for complying with the Court of Appeals opinion, the November 10 Plan was essentially a legal brief arguing for dismissal of the Board's petition and accompanied a motion to dismiss. Among other things, the government argued that recent legislative activities rendered 1984 funds unavailable to the Board, except for $20 million dollars allocated as part of those activities.*fn2 However, the government finally and for the first time acknowledged that it was ready to give the Board some priority in dividing up desegregation funds. This promise was laden with conditions: The Plan stated that "in reviewing applications under any desegregation programs that provide operational support to local educational agencies, the Department [of Education] would give the Board a competitive priority under any criterion related to need, to the extent consistent with the statute and regulations." The United States calls this a "commitment," but this is difficult to understand, for it was made in the context of its concurrent arguments that no funds were then available to the Board, and that no desegregation programs provided operational support to local educational agencies. In fact, the Plan did not include Title IV or the Discretionary Funds in the priority, despite the Court of Appeals' then-recent holding concerning those funds.

In March 1984, the District Court held an evidentiary hearing, and in June, issued a lengthy and comprehensive opinion. See 588 F. Supp. 132 (N.D.Ill. 1984). It is not necessary to discuss that opinion in detail. In a nutshell, the Court reviewed the history of the proceedings, including the parties' understandings when they entered the Consent Decree. It found that most of the programs under the Board's desegregation plan materially aid the successful implementation of the Plan, and that their costs were reasonable.*fn3 The Court also found that the funding requirements of the Plan for the 1984-85 school year had climbed to about $170 million; that the Board had exerted its best efforts to fund the Plan, but fell some $104 million short of doing so; that the United States was bound under ¶ 15.1 to make good faith efforts to find and provide this balance of $104 million. The Court held that various actions and inactions of the United States constituted bad faith, including submission of the November 10, 1983 Plan, failing to provide funds to the Board, failing to ask Congress for money for the Board, failing to reprogram funds for use by the Board, deciding to curtail direct desegregation grants to local educational agencies, lobbying Congress specifically to make funds unavailable to the Board and redrafting regulations in the Discretionary Fund thereby rendering funds unavailable to the Board.

The Court ultimately entered a detailed remedial order, which was based on two independent grounds, first, as a matter of interpretation of ¶ 15.1 itself, and second, as a remedy for the United States' deliberate bad faith. Both grounds required the United States, among other things, to lobby Congress for funds for the Board and to oppose contrary initiatives. In a later remedial order issued in August, 1984, the Court ruled that because of the government's bad faith, it had an unconditional obligation to pay the Board the $104 million needed for the Plan. It ruled that if the United States failed to do so, it would, as a remedial matter, have to obligate to the Board the $17 million restrained in the 1984 Discretionary Fund, and the approximately $12 million in the 1984 Title IV account, despite the fact that most of these funds were obligated to other grantees and purposes.

The United States appealed, and the Seventh Circuit vacated the District Court's 1984 opinion and its subsequent remedial order. At the outset we observe that the Court did not address most of the District Court's Findings of Fact and specifically reversed only its finding that as a matter of construction ¶ 15.1 required the Executive Branch to lobby in Congress and findings of bad faith which depended on this finding. Instead of examining the lengthy District Court Opinion in fine detail, the Court in a brief but broadly worded opinion altered the framework for approaching this case and remanded for application of this approach. Before embarking on its legal analysis, the Court set out the principal issues before it. First, it said it had to decide whether ¶ 15.1 required the Executive Branch "to engage in legislative activity, to make up the difference between the funds necessary for implementing the desegregation plan and the funds that the Board has budgeted for this purpose, and to award Title IV funds and Discretionary Funds to the Board without regard to other grantees." 744 F.2d at 1304. If it would have ruled for the Board on these issues, the Court said it would have had to decide whether the doctrine of separation of powers rendered the Decree unenforceable. The Court resolved the first set of questions in favor of the United States, so it never expressly addressed the constitutional issue. However, it is clear that the separation of powers doctrine lurked beneath the surface of the Court's opinion.

In Part II(A) of the opinion, the Court interpreted ¶ 15.1, as that section's heading states. It reaffirmed its 1983 holding that ¶ 15.1 imposes "a substantial obligation on the government to provide available funds to the Board." Id. at 1304. The Court then noted that on remand, the government had stated in its November 10, 1983 Plan that it was prepared to give the Board priority in the distribution of desegregation funds under existing federal programs." Id. at 1305. At oral argument, the Court had asked government counsel what the government's priority meant. Counsel went beyond the literal terms of the Plan spelled above, and stated that under the system of priority, the Department of Education "will put the Board `at the top of the list' for any program grants that can be applied to desegregation assistance and for which the Board is eligible." Id. This "top of the list priority" applied to Title IV, guaranteeing that the Board will receive its "`equitable fair share' of funding under Title IV criteria," id., and that this funding will be earmarked for Chicago and set apart from the usual block grant funding. Counsel also conceded that the priority applies to the Discretionary Fund.

The Court "considered" these representations and held that

  by guaranteeing the Board will be funded on a
  priority basis under existing school
  desegregation programs, the amount of which
  funding is determined by program criteria and is
  subject to the review of the district court, the
  government would comply with our interpretation
  of ¶ 15.1 and would fulfill its substantial
  obligation to provide available funds.

Id. at 1305-06. The Court added that ¶ 15.1 binds the Secretary of Education's discretion "with respect to funds that may be used for school desegregation pursuant to Congressional appropriation." Id. at 1306 n. 7. The Court also held that this ruling meant that, as a general rule, ¶ 15.1
does not force the government to try to make funds available through legislative activity. Id. at 1306. By so doing, the Court did not expressly address the alternative separation of powers arguments raised by the United States.

The Court concluded this section with its remand instructions. It remanded the case for this Court to determine whether "the Board is receiving the maximum level of funding that is available under the criteria of programs through which funds for desegregation can be disbursed." Id. at 1306. The Court added that so long as the Board has unmet needs, the government also has a continuing "duty to search" for "unencumbered funds [in the Department of Education and other federal agencies] that may be used to advance the Board's desegregation plan." Id. at 1306-07.

Thus, in Part II(A) the Court answered the "lobbying" question in favor of the government. It also ruled that ¶ 15.1 cannot guarantee the Board all funds made available by Congress. The Board deserves only an "equitable fair share" following "priority" consideration.

The Court in Section II(B), titled "Bad Faith," turned to the District Court's findings of bad faith, which had supported its remedial ruling that the United States had an unconditional obligation to pay $104 million to the Board for 1984-85. The Seventh Circuit vacated all the findings of bad faith but one. Working from its holding in Part II(A) that ¶ 15.1 does not require the government to lobby for desegregation funds, the Court held that it was not bad faith for the government to fail to take certain legislative actions, such as (1) failing to request Congressional appropriations for the Board, (2) failing to "reprogram"*fn4 funds for the Board, (3) administratively deciding not to provide direct grants for school desegregation, and (4) redrafting administrative regulations limiting grants of Discretionary Funds. In support of points (3) and (4), the Court reasoned that the decisions were general and nationwide, and therefore did not indicate that the United States specifically intended to avoid ¶ 15.1. Id. at 1307 & nn. 9, 10. The Court did not reverse the lower court's "most significant finding of bad faith," concerning the government's lobbying activities which tried to make funds unavailable to the Board. The Court assumed that these activities constituted bad faith, but held that the District Court abused its discretion by ordering a $100 million remedy for this violation. This remedy would have rendered funding unavailable to other grantees and was thus held to be unreasonable. A civil contempt citation would have been the appropriate remedy, but the time for such action had passed. Id. at 1307-08. The Court concluded by scolding the Executive Branch for its activities, as noted above in our introduction. It remanded for proceedings under Section II(A) of the opinion and directed under Circuit Rule 18 that a new district judge take over the case. The case was reassigned by lot to this Court.

2.  Issues Raised by the Opinion

The second Court of Appeals opinion ("Second Opinion") is clear about several things, which the Board does not dispute. As a general rule, ¶ 15.1 no longer affirmatively requires the Executive Branch to engage in legislative activity supporting the Board.*fn5 It does not require that the Board receive funds without any regard for other grantees. It also precludes the Court from finding that failure to lobby or reprogram amounts to bad faith per se, or that the mere act of creating a general policy which effectively limits the funds available to the Board amounts to bad faith (absent evidence of intent to hurt the Board). The Board also concedes that, to a large extent, the Secretary is free to obligate portions of otherwise theoretically "available" funds to other purposes and grantees.

However, the parties bitterly disagree about much of the rest of the opinion. To paraphrase the Circuit Court, the process of dispute resolution continues to fail remarkably in this case. See 744 F.2d at 1304. The parties have raised several broad, but crucial, issues of interpretation of the Second Opinion. We must decide the dispute over what the Second Opinion means in order to know how to carry out its remand instructions. The nature of the Second Opinion explains why so many questions remain unanswered. The Court's purpose was to change the approach to the case, not to resolve the case. The unresolved dispute divides into three general, overlapping issues, which the Board has appropriately dubbed the "scope," the "pipeline" and the "share" issues. Resolution of these issues will give meaning to ¶ 15.1's words, "every available form of financial resources."

The "scope" question asks how broadly the ¶ 15.1 funding priority sweeps. In which Congressional programs are funds "available" for the Board's Plan and subject to priority treatment? The United States contends that the Second Opinion limits the "top of the list" priority (which it repeatedly demotes to a "competitive priority," a point we shall return to) only to programs specifically designated by Congress in whole or in part as a "desegregation" program. The Board argues that neither ¶ 15.1 nor the Second Opinion limits the government's duty to programs which carry an explicit "desegregation" label. Rather, the "scope" of the priority covers any program which can materially aid the Board's desegregation plan and for which the Board's own programs qualify under statutory criteria. In other words, according to the Board, a "desegregation" program is that which is contained in the Board's "desegregation plan."*fn6

While the scope issue cuts horizontally across various Congressional programs, the "pipeline" issue has both vertical and horizontal components within a given Congressional program. The "pipeline" question asks when the Secretary's discretion is bound and how it is bound. The "when" question is one of vertical priority: when during the administrative funding process — from the point where money enters the "pipeline," i.e., when Congress allocates funds, to where it exits the pipeline, i.e., when the Secretary writes checks to grantees — does the Consent Decree affect the Secretary's discretion? The United States argues that, until the last phase of the granting process, it is free to exercise its discretion with nary a glance at the Consent Decree; only after it passes regulations, sets priorities and refines program criteria must it take the Consent Decree into account. That is, only when the Board applies for funds in competition with other applicants does it get a priority, says the United States. The Board, of course, argues that the Secretary must consider the Consent Decree much earlier in the funding process. Although not specific about what particular steps the Secretary must take (it does detail steps the Secretary could take, see Board's Merits Memorandum at 46-72), the Board says that ¶ 15.1 binds executive discretion at the entrance of the pipeline, ensuring that the Board's needs are considered from that point on as a priority along with the myriad other priorities. In that sense, the pipeline issue is "horizontal," since the United States would have to balance the Board's priority against other priorities within the pipeline.

The "share" issue depends heavily on the outcome of the scope and pipeline issues. It asks what "share" of available funds, that is, the dollar or percentage amount, the Board should get because of the priority. This question is horizontal as between the Board and other grantees. Out of a pool of given funds, what does the Board get and what do the others get, after applying the priorities as defined by the "scope" and "pipeline" issues?

The scope and pipeline issues depend mostly upon the teachings of the Second Opinion and the meaning of ¶ 15.1. Therefore we address those questions next. The share issue essentially is the issue specified in the Court of Appeals remand instructions. We decide that in Chapter IX of this opinion, after entering our Findings of Fact and Conclusions of Law.

3.  The Scope Issue

Unfortunately, the Second Opinion is not clear on its face as to the scope issue. The length of the parties' submissions on this issue alone underscores that point. Nevertheless, after carefully considering the Second Opinion in the context of the Consent Decree and its history and of the First Opinion, we hold that the Board's position on this issue is correct: The ¶ 15.1 priority extends to any statutory program which could materially further the Board's desegregation plan, so long as a project in that Plan may qualify for funding under relevant statutory criteria.

In reaching this result, we begin by considering the Second Opinion. Because of its broad, vision-shifting approach, the Court never explicitly addressed the scope issue now before us. Probably this explains the opinion's ambiguity on this point. As noted earlier, the Court said it was answering a different question, that is, whether ¶ 15.1 requires the Executive Branch to lobby Congress to make up the difference between what the Board has spent on its Plan and what the Plan needs. 744 F.2d at 1304. In answering "no" to this question, the Court several times used language which is relevant to the current scope question. Both sides argue that this language supports their positions. First, in summarizing the government's representations at oral argument, the Court said that the proposed priority system would put the Board "`at the top of the list' for any program grants that can be applied to desegregation assistance and for which the Board is eligible." 744 F.2d 1305 (emphasis added). It then discussed Title IV and the Discretionary Fund, both of which list desegregation as a statutory purpose. In its holding, the Court said that the Board must be "funded on a priority basis under existing school desegregation programs, the amount of which funding is determined by program criteria. . . ." Id. (emphasis added). The Court added that ¶ 15.1 binds the Secretary's discretion "with respect to the funds that may be used for school desegregation pursuant to congressional appropriation." Id. at 1306 n. 7. In explicitly rejecting the District Court's findings that ¶ 15.1 required lobbying, the Court held that no evidence showed "that the parties had any federal funding sources in mind other than programs that could be used, consistent with the intent of Congress, to fund school desegregation efforts." Id. at 1306. Finally, in its remand instruction the Court ruled that this Court should determine whether the Board is receiving "the maximum level of funding that is available under the criteria of programs through which funds for desegregation can be disbursed." Id.

Each party vigorously contends that this language unambiguously supports its position. But because this language is facially ambiguous, we must disagree with both sides that the opinion's language is itself determinative. On the one hand, the Board argues quite reasonably that the language of the opinion supports a broad reading of the scope issue. Nowhere does the opinion explicitly limit ¶ 15.1 to desegregation-label programs. Rather, it speaks about "any program grants that can be applied to desegregation assistance"; about "funds that may be used for school desegregation pursuant to congressional appropriation"; about "programs through which funds for desegregation can be disbursed." (Emphasis added.) All of this language can be read to mean that the Board may receive funds to aid its desegregation plan (hence, receive "desegregation assistance") so long as programs in its Plan qualify under statutory criteria.

On the other hand, the United States' position is plausible from the face of the opinion. The Court held that the priority applies to "existing school desegregation programs," id. at 1305, that is, "programs that could be used, consistent with the intent of Congress, to fund school desegregation efforts." Id. at 1306. As the government argues, this language could be read to mean that Congress must specifically intend that the money be spent for desegregation. The Court's specification of only Title IV and the Discretionary Fund — two desegregation-label programs — bolsters this reading. Yet this reading is not inevitable. The other language quoted earlier very much supports the Board's position. The word "existing" probably is there to underscore the Court's paramount concerns with lobbying rather than to impose a desegregation-label requirement. And the language, "consistent with the intent of Congress," could support the Board's reading. The Court used that language in the context of ruling that ¶ 15.1 does not, as a matter of construction, require lobbying. In the context of all the other quotations, it could plausibly be read to mean ¶ 15.1 does not require lobbying, but only covers "programs that could be used, not inconsistent with the intent of Congress, to fund the Board's desegregation efforts." This reading becomes much more plausible when one realizes that everyone, including the Court of Appeals, knew that the Board's unique Plan contained many "non-desegregation" programs in it.

In sum, the Court simply did not unequivocally answer the current scope question: in the unique context of this case, is a "school desegregation program" one that is labelled as such, or one that could aid the Board's desegregation plan? We conclude that the Board's position is correct, not because the language of the opinion inevitably reads that way, but because that language, considered in the context of ¶ 15.1 and the extrinsic evidence, makes the Board's position the more logical and reasonable one.

The language of ¶ 15.1 itself plainly implies no limitation to programs which Congress has labelled "desegregation." Such an implication would actually run contrary to the thrust of the Consent Decree, which the parties agree was and is unique and pioneering.*fn7 Provisions of a Consent Decree must be read in the context of the whole agreement, see, e.g. Alliance to End Repression v. City of Chicago, 742 F.2d 1007, 1011 (7th Cir. 1984) (en banc). The Decree contemplated a broad, system-wide plan. It anticipated the use of many educational programs, both to encourage voluntary desegregation and to compensate children in segregated schools for inevitable continued desegregation.*fn8 The vital funding provision for this Plan, ¶ 15.1, expressly incorporates no artificial limitation. It binds both parties "to make every good faith effort to find and provide every available form of financial resources adequate for implementation of the desegregation plan." This language does not reasonably suggest that the funding duty is limited to desegregation-label programs. Instead it is obviously broad and inclusive, suggesting no limitation of the kind offered by the United States. Indeed, the United States' reading flies in the face of this language. The comprehensive nature of the Board's Plan and the Consent Decree, see Findings 101-110, shows that the parties took an approach that cut away traditional labels and old ways of dealing with desegregation cases. The case involved a novel approach to desegregation, using many costly "non-desegregation" educational programs. It simply does not make any sense that ¶ 15.1, the lifeblood of this Plan, would silently draw a line between programs with and without desegregation labels when the rest of the Consent Decree draws no such line.

The extrinsic evidence surrounding the Consent Decree buttresses the Board's position on the scope issue. While the United States is correct that during the negotiations the Board was concerned about its previous difficulties in getting funding under desegregation-label programs,*fn9 these negotiations were unfruitful. After a new Board was appointed and new counsel retained, the parties' focus shifted to general principles rather than specific dollar values. As the United States has stipulated ("1984 Stipulation 104"), ¶ 15.1 was not designed to incorporate any specific discussions, but to establish a general and flexible obligation "which would be interpreted and applied as appropriate in whatever future circumstances might arise." Thus, Judge Shadur found in 1984 (a finding which we adopt below in Chapter I) that the extrinsic evidence does not support a reading that ¶ 15.1 was limited to the ESAA program or the historical amounts of that program. See Findings 101-110.

One piece of evidence, relied upon by the Seventh Circuit in the First Opinion, also supports the broader reading of the scope issue. Shortly after signing the Decree, the General Counsel of the Department of Education wrote in a memorandum that the Decree compelled the Department to "ensure that the Chicago School Board . . . receives the maximum amount of financial and technical assistance that this Department can provide." 717 F.2d at 382 n. 7. This memorandum supported the Appeals Court's holding that ¶ 15.1 binds the Secretary to provide available resources. We also think it strengthens the conclusion that this "duty to provide" contains no implicit limits concerning desegregation-label programs. See also Findings 110, 126. The words "maximum amount of . . . assistance" imply no such limits*fn10 and neither do the Court of Appeals' two holdings that the United States' obligation under the Decree is "substantial."

In short, the broad language of the Consent Decree and extrinsic evidence concerning its history and the history of this case supports the Board's reading of the scope issue. If the Court of Appeals had meant to reject such a reading, it would have had to deal with the language of the Consent Decree, the extrinsic evidence and Judge Shadur's relevant factual findings. Its failure to do so confirms our belief that it was not addressing the current scope issue directly, which explains the ambiguity.

The United States concedes that ¶ 15.1 applies to programs which do not carry a desegregation label. It acknowledges that ¶ 15.1 imposes a duty to "find" (but not "provide") funds in "non-desegregation" programs. In fact, the government stipulated in 1984 that the discussions leading to ¶ 15.1 addressed "funding possibilities, relating not only to the Department of Education . . . but also other federal agencies such as the Department of Justice, the Department of Transportation, and the Department of Housing and Urban Development." See 588 F. Supp. at 141 (Finding of Fact 104, based on 1984 Stipulation 104). Thus, while it admits that ¶ 15.1 in some form applies to such programs, it attempts to mitigate the significance of this admission by arguing ¶ 15.1 imposes only a "finding" duty to these programs. The government thereby attempts to bifurcate the phrase "find and provide" in ¶ 15.1. This does not wash.

In its "bifurcation theory," the government draws a new line in ¶ 15.1, arguing, in effect, that it should be read to mean:

  The United States has two obligations. First, it
  must make every good faith effort to
  find funds appropriated by Congress to programs
  which could materially aid the Board's
  desegregation Plan. It must help the Board apply
  for such funds, but it owes the Board no special
  treatment in providing such funds. Second, the
  United States will make every good faith effort to
  provide only funds appropriated to programs which
  Congress has labelled "desegregation."

This construction tortures the language of ¶ 15.1. As noted above, the plain language of ¶ 15.1 creates one duty concerning one pool of funds: "make every good faith effort to find and provide every available form of financial resources adequate for implementation of the desegregation plan." The language suggests no above bifurcated duty to find one sort of funds and provide another.*fn11 Rather, it suggests the opposite since the "Plan" includes many "non-desegregation" programs.

The United States suggested no such bifurcation in 1983 when it simply ignored the word "provide" and argued that it had a unitary duty only to help the Board "find" and apply for funds. The Court of Appeals suggested no such bifurcation in 1983 when it held that ¶ 15.1 imposes a substantial obligation on the United States to provide available funds.*fn12 The November 10, 1983 Plan suggests some sort of bifurcation, but at oral argument on appeal (during which the government went well beyond that Plan, as we discuss below) the government did not distinguish the duty to search from that to provide.*fn13

Despite the unreasonableness of the bifurcation theory, the United States argues that certain language in the Second Opinion supports bifurcation. In its remand instruction the Court first declared that we must determine whether the Board has received "the maximum level of funding available under the criteria of programs through which funds for desegregation can be disbursed." 744 F.2d at 1306. The Court added:

  In the likely event that the Board has financial
  needs that are still unmet, we note that the
  government has admitted that it has a "duty to
  search among funds that Congress had indeed
  made . . . available." Transcript of April 5, 1984,
  at 1416. The best proof that the government is
  fulfilling this duty would be the assignment of
  personnel to the task of periodically reviewing
  federal funding programs, in the Department of
  Education and in other federal agencies, for
  unencumbered funds that may be used to advance the
  Board's desegregation plan.

Id. at 1306-07 (emphasis added). We disagree with the government that this language supports its bifurcation theory. First, if the Court meant to adopt such an approach, it would have had to deal directly with the unitary language of the Consent Decree, the extrinsic evidence and the District Court's 1984 opinion, all of which strongly militate against the bifurcation theory. We do not believe the Court would ignore this history if it were to reach such a conclusion. It is incredible that the Court would casually bifurcate ¶ 15.1 without discussing its language or the extrinsic evidence. When the court did construe ¶ 15.1, it did explicitly discuss its language and relevant extrinsic evidence. See 717 F.2d at 382-83; 744 F.2d at 1306.*fn14

We agree with the Board that the Court in the "search" quotation was stating something much simpler and less controversial. The excerpt merely underscores the fact that the United States' obligation under ¶ 15.1 is a continuing one, which is not discharged even if this Court decides that the Board has in fact received "the maximum level of available funds" under a known program. For even under the Board's reading of the scope issue, it will have large "financial needs that are still unmet" even after receiving the "maximum" level of funding. So long as such a shortfall exists, the United States must continue to search diligently for "unencumbered" funds. This surely does not imply that it has no duty to "provide" such funds if "found," or that the funds will not be subject to priority treatment. What is the point in finding but not providing such funds? And such an implication is especially unreasonable in light of the Court's failure to discuss ¶ 15.1, the extrinsic evidence, or the bifurcation theory itself.

We therefore reject the United States' bifurcation theory. We must also reject the premise upon which it, as well as much of the government's case, is based, namely, that the Court of Appeals "endorsed" or "adopted" the priority system and bifurcation espoused in the November 10, 1983 Plan. The United States claims that its November Plan articulated its bifurcated duty, that the Assistant Attorney General simply "explained" the priority to the Appeals Court at oral argument, and that the Second Opinion merely endorsed the Plan as explained at oral argument. From these premises flow many of the government's arguments, including its bifurcation theory on the scope issue and its restrictive position on the pipeline issue. Thus, its claim that the Court of Appeals essentially incorporated the November 10 Plan as law merits close attention.

The government's argument uses the Court of Appeals opinion to replace the language and background of ¶ 15.1 with its own November 10 Plan, which was in actuality filed as an offer of how it was to comply with (not replace) ¶ 15.1 in light of the First Opinion. Consistent with this approach, the government diverts attention from the consent decree itself and the extrinsic evidence, arguing instead that what it says its own priority means is entitled to great deference.

The government's position is patently wrong. The Plan was just one step in of the United States' glacial move toward compliance with ¶ 15.1, not the standard by which to read ¶ 15.1. Before the First Opinion the government maintained that ¶ 15.1 imposed no special funding obligation. The Court of Appeals rejected this position, 717 F.2d at 381-82, and remanded to the United States to propose how it intended to comply with ¶ 15.1. The government thus filed its Plan, in which it repeated its position regarding "technical assistance," but also first promised a "competitive priority" which would apply only to "desegregation programs that provide operational support to local educational agencies." November 10, 1983 Plan, ¶ 3. However, this offered priority was hollow, since the government was also asserting that no such funds were available and that there were no desegregation programs providing operational support to local agencies. Moreover, the priority offered did not cover Title IV, which was discussed separately in the Plan, see ¶ 4, and the Plan did not even mention the Discretionary Fund. Nowhere does the Plan use phrases like "top of the list priority" or "equitable fair share." Indeed, it was not until March of 1984 that the United States indicated that its priority might extend to Title IV. See United States' Pre-Trial Memorandum (March 13, 1984) at 24.*fn15 Moreover, the United States concedes that phrases like "top of the list" were not developed until the Appeal. And the Discretionary Fund was not included until then. See Conclusion 518 below. In sum, the November 10 Plan is not even a distant cousin of the standard enunciated in the Second Opinion. Indeed, that opinion could not possibly have "endorsed" the priority offered in the Plan because the United States itself substantially changed its articulation of the priority by the time it walked into the Appeals Court.

The government's oral argument on appeal illustrates this point. The Assistant Attorney General did not even mention the Plan or use the Plan's phrase "competitive priority." Rather, he coined much more expansive phrases like "top of the list priority" and "equitable fair share." And he expressly extended this expanded priority to Title IV and the Discretionary Fund, while conceding that the Executive's discretion was subject to court review. Given this overhaul of the November 1983 Plan for purposes of appeal, the government now strains its own credibility by suggesting that the Court of Appeals "endorsed" the Plan.

If the Court of Appeals had meant to endorse the Plan it could have simply said so instead of bothering to write an opinion. But it did not, nor did it even quote from the Plan or analyze its terms. It mentioned that the Plan was the first time the government had offered the Board a priority, and that the District Court had rejected the Plan. 744 F.2d at 1305. It mentioned the Plan no more. Instead, it went on to summarize the description of the priority made at oral argument, one which, as we have seen, differs greatly from that contained in the Plan. Its holding and remand instructions do not instruct this Court to confirm that the government is fulfilling the narrowly defined promises of the Plan, but rather tell us to determine whether the Board is receiving "the maximum level of funding available in desegregation programs under program criteria." In short, the November 10 Plan has no bearing on these remand proceedings. It surely is not the standard by which to interpret ¶ 15.1 or the Second Opinion. It merely represents one historical step that the government has taken in its begrudging march toward compliance with ¶ 15.1.

The representations made at oral argument, however, are another matter. Undoubtedly, the Court of Appeals relied heavily on these representations in reaching its holding in Section II(A) of the Second Opinion. Both parties quote extensively from the oral argument in their efforts to interpret that opinion. Thus, even the Board concedes that the statements are important. The United States goes further and essentially argues that the representations carry the weight of the opinion itself, since the Court smiled upon these statements in its opinion. While the oral statements are important, we obviously cannot accord them the force and effect of law. They simply provide some clues to what the Court of Appeals, which speaks law, meant. In our effort to discern what the Court of Appeals meant we must view the representations carefully, since they were made for the first time on appeal, in bitter litigation, were based on facts then outside of the record and were not then subject to evidentiary challenge. The representations are much more relevant to the pipeline issue than the scope issue. For now, we will discuss them only to the extent they relate to the scope issue.

The Court of Appeals quite clearly endorsed the government's position concerning the scope issue then before it, namely, how ¶ 15.1 affects the Executive in its dealings with Congress. Both the government and the Court of Appeals agreed that ¶ 15.1 does not affect what Congress says is "available" or how the Executive lobbies Congress. However, the Assistant Attorney General only briefly alluded to the scope issue now before us. As noted earlier, he never mentioned the bifurcation theory. Thus, his representations have little bearing on the scope issue. Nevertheless, we will briefly deal with what he did say. When he was describing the "top of the list" priority system, he said it applied to "funds . . . that Congress has said are available for desegregation purposes." Transcript of Oral Argument at 4. The panel asked him to name these funds, and he first identified only Title IV. Id. The panel pressed him for other programs, and he identified the Discretionary Fund. The panel did not ask him to name other programs, and he, of course, volunteered none. All of this is not surprising, since, as we have noted, the current scope issue was not the focus on appeal. In the opinion the Court noted that the Assistant Attorney General had said that the priority applied to Title IV and the Discretionary Fund. 744 F.2d at 1305. But, although it could have easily done so, the Court did not itself limit the priority to these programs.*fn16 It spoke in general terms about "existing school desegregation programs" or "programs through which funds for desegregation can be disbursed." With such general language, the Court obviously left the door open to the possibility that other programs might qualify for the priority. And as we have discussed earlier, the Court never said that such programs must carry a desegregation label. The government may have suggested it in passing at oral argument, but the Court did not discuss or adopt this language. As we have noted earlier, we seriously doubt that the Court would read such a narrow limitation into ¶ 15.1 without explicitly considering its language, the extrinsic evidence and Judge Shadur's findings.

Indeed, the Court did not simply and mindlessly adopt everything the Assistant Attorney General said. It surely adopted his general position on lobbying and his general, vague articulation of the priority, "top of the list" or "equitable fair share." But the judges did not simply sign their names to the transcript of oral argument. The Assistant Attorney General told the Court that some $400,000 in 1984 Title IV funds had been earmarked for the Board, twice as much as received by any other school district, and that the Board would "get what its projects called for" in applying for funds from the Discretionary Fund. Had the Court thought this alone sufficient, it could have simply said so, reversed and ordered this Court to confirm the oral representations. But it did not do so. It used its own general language, noted above, and went beyond the representations, ordering this Court to "determine" whether the Board is — in the Court's words — receiving "the maximum level of funding" available. As we have said, the Court was shifting the direction of the case, but not resolving all of the issues, like the scope issue. In sum, the Court of Appeals began by noting the November 1983 Plan; it then considered, relied upon and generally favored the new, oral representations of government counsel; and it concluded by articulating its own, broader general standard for the priority treatment due the Board. Because this was a new standard, it was general and somewhat open-ended, so that this Court could interpret it in the first instance in light of that opinion, ¶ 15.1, and existing programs. In sum, the representations at oral argument do not compel us to embrace the government's position on the scope issue.

Finally, before moving to the pipeline issue, we must briefly reject the government's remaining arguments concerning the scope issue. First, it is not relevant that Congress has historically used desegregation labels when it specifically intends that money be used to further desegregation. What is relevant is what the parties intended in ¶ 15.1 as funding sources for the Plan. The Executive could have easily pushed for such a restriction, but did not do so. Second, contrary to the government's worries, our construction does not open its coffers wide to the "voracious" Board. The government's obligation applies only to programs which "materially aid the success of the overall desegregation effort." 588 F. Supp. at 215, citing Arthur v. Nyquist, 712 F.2d 809 (2d Cir. 1983), cert. denied sub nom Griffin v. Board of Education, 466 U.S. 936, 104 S.Ct. 1907, 80 L.Ed.2d 456 (1984) and Liddell v. Missouri, 731 F.2d 1294 (8th Cir. 1984), cert. denied, ___ U.S. ___, 105 S.Ct. 82, 83 L.Ed.2d 30 (1984). As noted earlier, the government knew that the Board's Plan would contain extensive and expensive remedial educational components, see Consent Decree ¶ 7, yet ¶ 15.1 draws no literal distinction between types of programs subject to ¶ 15. 1. And the government conceded at oral argument that the Board's Plan is reasonable. See also Findings 118-121 below. More significant, the Board's Plan is subject to the continuing review of this Court. We will not let the Board pack its Plan with irrelevant programs which turn the Plan into a black hole sucking up all unencumbered funds. Also, Congressional criteria limit the Board's entitlement. The Board cannot receive funds for any of its programs unless it qualifies under all relevant Congressional criteria. And our resolution of the "pipeline" issues and "share" below indicates that the Board cannot receive anything remotely approaching "all" funds in any program within the broad "scope" of ¶ 15.1. In sum, our resolution of the scope issue does not open up limitless funds to the Board. It simply interprets "available" to include a broad range of programs, not a large share of funds within those programs.

4. The Pipeline Issue

The issue here is at which point in the funding process, from Congressional appropriation to check-writing, are funds in a Congressional program which can aid the Board's Plan "available" such that ¶ 15.1 affects administrative discretion? We hold below that the Board's answer is correct. The language of ¶ 15.1, the representations made at oral argument, the Second Opinion itself and logic support the construction that ¶ 15.1 must affect administrative discretion at the beginning of the pipeline when Congress defines and passes "available" money into administrative hands.

As with the scope question, the Court of Appeals never squarely addressed the exact pipeline issue now before us. It instead ruled in Part II(A) in favor of the government's arguments that ¶ 15.1 does not require the Executive Branch to engage in legislative activity (a pre-pipeline question) or to give to the Board all funds appropriated to Title IV and the Discretionary Fund without regard to other grantees (a "share" question). Given this context, it is not surprising that at oral argument the government (which was appealing a contrary decision) emphasized several times that funds "available" under ¶ 15.1 are limited to those appropriated by Congress, but not those which the Executive could ask Congress to appropriate. In drawing this line at the appropriation stage, the government repeated that the Consent Decree binds the Secretary's discretion with respect to funds made "available" by Congress, but not his discretion concerning legislative activity. Thus, counsel said the following things, among others, to the Court (emphasis added):

  a.  [¶ 15.1] requires us to give the City of
      Chicago priority consideration with respect
      to the available funding under different
      Congressional appropriations and in the
      context of that priority consideration to
      provide funds to Chicago that Congress has said
      are available for desegregation purposes.
      (Transcript p. 3).

  b.  What Chicago gets, and I think what the
      Decree contemplates — is going to get its full
      equitable share of whatever funds are available
      to the grantees, based on the eligibility
      criteria that the Secretary has to work
      with. . . ." (Transcript pp. 8-9).

  c.  The reason . . . a small amount of money [is
      available in the Discretionary Fund], just
      like the reason . . . a small amount of Title
      IV money [exists], has nothing to do with the
      Secretary's activity, it is the appropriation
      activity of Congress, and Congress is the one
      that has the power to make this kind of
      appropriation and to say it is either going to
      be subject to discretion or not. . . .
      (Transcript p. 13).

  d.  The Consent Decree speaks to
      available funds, and as we all have agreed,
      that word pertains to what Congress has
      appropriated. (Transcript p. 10).

  e.  What this decree does is it, I think quite
      clearly, binds the Secretary's discretion with
      respect to those funds that Congress has
      appropriated and has said should be allocated
      pursuant to that discretion. . . . [W]hat
      Chicago has gotten by this consent decree is
      the ability to come back into Court . . . to
      point to that Consent Decree, paragraph 15.1
      and enforce the obligation that is there, that
      indeed, that Chicago get its full equitable
      share of that particular amount of
      appropriation that is subject to the discretion
      of the Secretary. . . . (Transcript p. 44).

The quotations clearly indicate that the Assistant Attorney General was most concerned about drawing a line about which funds are available at the appropriation stage. But once the Secretary gets the money that Congress makes "available," his discretion is bound after appropriation. The government did not specify at which point after it receives the money the discretion is bound, probably because that was not the focus on appeal. But it clearly admitted in broad terms that its discretion was bound. And it concedes in its brief that as an initial matter Congress determines the availability of funds to which the priority applies. United States' Merit Brief at 70.

The Court relied upon these concessions. As with the scope issue, it did not precisely address the pipeline issue now before us, but it did make some remarks which relate to the issue. First, it confirmed that ¶ 15.1 binds the Secretary's discretion subject to court review. 744 F.2d at 1306 n. 7. The Court also drew a bright line at the appropriation stage. But when it came to which post-appropriation events are subject to review, the Court was less specific, using the general phrase like "top of the list," "equitable fair share," "get what the project called for," and "maximum level of available funding," none of which specify exactly how or when after appropriation the Secretary's discretion is affected. The Court did refer to "Title IV criteria" or "program criteria," as controlling, but did not specify whether such criteria are merely Congressional criteria or include administrative criteria created without regard to ¶ 15.1. However, the heavy emphasis laid on Congressional intent by government counsel and the Court,*fn17 suggest that Congress is free to determine the criteria of "availability," but that the Secretary cannot freely do so.

This conclusion rests on our assumption that the Court of Appeals must have meant for ¶ 15.1 to bind the Executive's discretion in some meaningful way. As a corollary to this uncontroversial proposition, we must assume that the Court would not allow the Executive to exercise unfettered discretion such that it could effectively reduce the Board's share of funds to close to zero. However, the government's position would let the Executive do precisely that. It would gut any sensible meaning from footnote 7, as well as from its concessions at oral argument. It claims that all meaningful administrative decisions in programs covered by ¶ 15.1 can be made without considering ¶ 15.1 and without judicial review. Only after it makes all these decisions does its priority spring up. When the Board applies for funds along with everyone else, it goes to the "top of the list" of applicants. This position rests on a second bifurcation theory.*fn18 Even though it concedes that Congress determines "available" funds subject to the priority and that it is able to apply the priority early in the pipeline, the government claims it is not obligated to apply a priority until the very end of the pipeline. The government thereby divides concededly "available" funds into two categories, funds that Congress has made "available" and funds that the government alone decides to keep "available." This is Orwellian doublespeak. In one breath the government concedes that its discretion is bound as to "available" funds, and that Congress determines "availability," but in the next breath, it claims it has unbound discretion to redefine what is "available."*fn19 This strips all meaning from the expansive language of ¶ 15.1 and from the two Court of Appeals holdings that the government owes a "substantial obligation" to provide (not unreviewably define) available funds.

Besides being grounded in common sense, our rejection of the government's position rests on traditional principles of contract construction. Consent decrees are to be construed like contracts. See, e.g., First Opinion, 717 F.2d at 382. Contracts should not be read in a way that places one party at the will or mercy of another. See, e.g., Padbloc Co. v. United States, 161 Ct.Cl. 369, 376-77 (1963). In this regard, the Seventh Circuit recently emphasized that a certain reading of a contract becomes implausible if it creates a situation that "one of the parties assumed enormous risks and got nothing in return." Alliance to End Repression v. City of Chicago, 742 F.2d 1007, 1013 (7th Cir. 1984) (en banc).*fn20

The government's reading works just the sort of mischief that these construction principles argue against. Under the United States' reading, by signing the Decree the Board assumed enormous risks — it has been pouring tens of millions of dollars into its Desegregation Plan. And the United States persists in arguing that the Board must pour more of its money each year into the Plan. Yet despite the plain reciprocity of ¶ 15.1, the government claims it can exercise its discretion such that it can unilaterally define its risk nearly out of existence. Likewise, under the government's theory the Board is placed at the government's mercy. It can freely ignore the ¶ 15.1 priority in setting other ones and thereby freeze the Board out of previously and concededly "available" funds.

In short, we must reject the government's position on the pipeline issue and adopt the Board's. To have sense and meaning, words and concepts like "available," "reviewable discretion" and "substantial obligation" require that the Executive's discretion be bound and reviewable from the time it actually receives funds which are "available" by Congressional criteria.*fn21 In no way does this mean that the Board must or will receive all such funds. The Second Opinion clearly forbids such a resolution of the "share" question. There is a reasonable middle position. All we are holding is that priority consideration begins when the Executive receives available funds from Congress. In making its various policy decisions down the pipeline, the ¶ 15.1 priority must be balanced along with competing priorities. The government clearly retains great discretion to meet other priorities and needs. But ¶ 15.1 must make the Board one of those priorities if it and the Second Opinion are to have any meaning at all. Ultimately, the "share" issue determines how that balancing translates into dollars. Thus, the Board does not get a "whole of the list" priority, as the government claims. It gets priority consideration as to all funds, but it actually receives nothing close to all funds.

Our holding does not suggest that "the government bartered away important public interests merely to avoid the expense of a trial." Alliance to End Repression, 742 F.2d at 1013. The government clearly retains substantial discretion to adjust national priorities and meet other needs. By saying its discretion is bound, we by no means say that its discretion is tiny or that it has simply bargained most of it away. Moreover, in agreeing to consider the Board as a competing priority, the Executive achieved much more than "merely avoiding the expense of trial." It secured a pioneering, voluntary*fn22 school desegregation plan, one which might not have been achieved through litigation. It created a national, experimental alternative to the traditional and controversial busing remedy. It did so relatively quickly, bringing remedies to Chicago's children much sooner than could have been achieved through litigation. And it helped work toward vindicating the federal Constitution and the public interest by desegregating Chicago's massive school system.*fn23 Given the Board's massive financial deficits, these gains could not have been achieved unless the federal government agreed to share the financial burdens. The United States' financial commitment under ¶ 15.1 was the principal quid pro quo for the Board's willingness to forego litigation and develop its Plan. See Findings 108-110. In return, the United States achieved the above gains.*fn24

Contrary to the claims of the government, this holding on the pipeline question is in full harmony with Part II(B) of the Second Opinion. As noted earlier, this case was remanded for "proceedings consistent with Part II(A)" of the Second Opinion. As its heading says, that section "interpreted" ¶ 15.1 defining in general terms the priority system and reading legislative activities outside of ¶ 15.1. Part II(B) addressed a separate question, the District Court's findings of bad faith which had supported its remedial order. It vacated the extraordinary remedy of $104 million because it found that the challenged government activities were not subjective bad faith attempts to flout ¶ 15.1. Some of these findings flowed from Part II(A). Its holding concerning legislative activities meant it was not bad faith to fail to ask Congress for appropriations or reprogramming of funds. The Court then made two findings that bear on the pipeline issue: neither the Secretary's decision not to provide direct grants for school desegregation nor his decision to redraft regulations limiting grants of Discretionary Funds constituted bad faith per se. 744 F.2d at 1307 & n. 10. The Court reasoned that such general policy decisions of national scope did not by themselves indicate governmental intent to evade ¶ 15.1.

A first impression of this holding, especially footnote 10, could lead one to think that the Seventh Circuit endorsed the government's position on the pipeline issue.*fn25 However, careful consideration of the opinion, the First Opinion and the general context of the case show that this first impression is wrong.

It is one thing to say that it is not bad faith to make a specific policy decision of national scope which has the effect of reducing the pool of funds available to the Board. Such a decision does not by itself indicate subjective intent to harm the Board. Thus, such a decision does not support the extraordinary remedial order the government appealed from. But it is quite another thing to say that the Executive may therefore completely ignore ¶ 15.1 in making all policy decisions such that it reduces the pool of available funds to near zero.*fn26 A certain particular action may not be prohibited per se by ¶ 15.1, but ¶ 15.1 may require some affirmative conduct out of a whole range of possible actions such that the Board receives substantial funding.

This analysis leads exactly to the position we adopted earlier. Part II(B) teaches that the Executive is free to make many general policy decisions which have the effect of harming the Board, so long as it does not do so intending to harm the Board. This we stated before. But as also noted earlier, for Part II(A) to be meaningful, the Executive's discretion as a whole must be bound just after Congress defines the pool of available funds. The requirement of "priority" treatment does not preclude the government from weighing and setting other priorities, so long as it does not totally ignore the Board in setting those priorities.*fn27 In this way, Part II(B) harmonizes with Part II(A).

The United States would have Part II(B) vaporize Part II(A). Its position would have Part II(B) create an immunity for all general policy decisions such that footnote 7 of Part II(A) would be meaningless. It would have Part II(B) give the Executive unfettered discretion even though footnote 7 says this discretion is bound. It would render the "substantial obligation" of Part II(A) meaningless through a totality of unreviewable policy decisions. We will not construe Part II(B) to so contradict Part II(A). The Court of Appeals meant it when it said in Part II(A) that the government owes a "substantial obligation" to give the Board "priority consideration." Our reading of Part II(B) preserves that meaning, yet leaves the Secretary much flexibility so that Part II(B) is meaningful as well. Our analysis in Chapters V, VI, VIII and IX of our Findings and Conclusions will show how Parts II(A) and (B) harmonize in practice.

5. Summary

¶ 15.1 requires the United States "to find and provide every available form of financial resources." According to the Seventh Circuit, this duty means that the Board must receive the maximum level of funding "on a priority basis under existing school desegregation programs, the amount of which funding is determined by program criteria and is subject to the review of the district court." 744 F.2d at 1305-06. Our resolution of the scope issue interprets "existing school desegregation programs" to mean any existing statutory program which can, under statutory "program criteria," fund projects in the Board's Desegregation Plan. Our resolution of the pipeline issue holds that Congress determines the pool of "available" funds, and that the Executive's discretion "is subject to the review of the district court" from the moment it receives such available funds.*fn28 Having so interpreted the Second Opinion and laid to rest disputes over its meaning, we are ready to fulfill our remand instructions and determine whether the United States has been giving the Board "the maximum level of funding available" under program criteria.

PART II: FINDINGS OF FACT AND CONCLUSIONS OF LAW

Before setting forth our extensive Findings of Fact ("Findings") and Conclusions of Law ("Conclusions"), we must clear up a few preliminary matters.

  1.  The Applicability of Judge Shadur's 1984 Findings
      and Conclusions

The Findings fall into several "chapters" corresponding to various major areas of dispute. The first three chapters detail the history of this litigation. In large part, these sections restate the history as found by Judge Shadur in 1984. See 588 F. Supp. at 140-200. Although not everything in this history relates directly to the issues on remand, two reasons moved us to adopt these Findings. First, the Court of Appeals vacated Judge Shadur's whole opinion, although it did not discuss the great majority of his Findings. Thus, the status of these Findings was unsettled. Second, in its brief the United States seeks to relitigate some of these Findings, especially those in Chapter 1 concerning the history of the consent decree negotiations, and those in Chapter 3 concerning the Board's good faith. This factual history needs to be resolved once and for all.

Judicial economy and public policy dictate that litigation should come to an end. See, e.g., Devines v. Maier, 728 F.2d 876, 880 (7th Cir. 1984), cert. denied, ___ U.S. ___, 105 S.Ct. 130, 83 L.Ed.2d 71 (1984). Thus, district courts generally refuse to reconsider portions of an original district court judgment unaddressed on appeal except "for convincing reasons." 1B, J. Moore, J. Lucas & T. Currier, Moore's Federal Practice, ¶ 0.404[4.-1], [4.-3]. Of course, we must follow actual decisions of the appellate court. See, e.g., Gertz v. Robt. Welch, Inc., 680 F.2d 527, 532-33 (7th Cir. 1982), cert. denied, 459 U.S. 1226, 103 S.Ct. 1233, 75 L.Ed.2d 467 (1983). However, we need not re-examine district court findings and conclusions which were not explicitly or by necessary inference addressed on appeal, if there is no compelling new evidence or reason to do so. Id.; see also 1984 District Court Opinion, 588 F. Supp. at 212-214. It is clear in this case that the government has presented no new, let alone compelling, evidence or reason warranting reconsideration of Judge Shadur's unreversed comprehensive Findings and Conclusions. We perceive no injustice in adopting several of those Findings, to the extent relevant and uncontradicted by the Second Opinion. Indeed, policies of finality and economy compel such approach.

We therefore reject the United States' various attempts to revise the history of this case. In particular, we decline to reconsider his findings concerning the Board's good faith efforts to date,*fn29 and the meaning of the extrinsic evidence surrounding the Consent Decree. In any event, Judge Shadur's findings on these and other issues appear correct to us, on the basis of our review of both resubmitted evidence and new evidence. Thus, whether grounded in "the law of the case" or in a fresh assessment of the evidence, Judge Shadur's relevant, unreversed findings in Chapters 1-3 stand. Of course, in adopting these historical findings, a few changes had to be made to reflect the passage of time. Also, a few marginally relevant findings have been deleted, and some new ones inserted.

The remaining Findings, Chapters 4 through 9, are generally new,*fn30 and fulfill our initial mission on remand, determining whether the Board received "the maximum level of available funding" in fiscal year 1984. Each Chapter addresses a particular category of available funding. Chapter 4 focusses on the "Excess Funds," which are administrative funds left over at the end of the fiscal year, which would have lapsed into the Treasury if not for our restraining order. Chapters 5 and 6 address the two principal desegregation-label programs, the Discretionary Fund and Title IV. Chapter 7 deals with the United States' efforts to date in searching for other available funds. Chapter 8 addresses two other programs, the Chapter 2 block grant program and the Follow Through program. Each chapter contains its own Conclusions, which apply the Second Opinion (as explained above in the Preliminary Opinion) to that Chapter's facts. Following these chapters, we discuss the share issue and remedial issues.

2. Satellite Motions of the Parties

The Board has moved to strike some affidavits which the United States filed with its Merits Brief. The thrust of the motion is that the affidavits were submitted after the close of discovery, mostly by witnesses who were already deposed, so that the Board has not had a chance to cross-examine the witnesses as to new facts alleged in the affidavits. The Board also attacks the evidentiary basis of several specific allegations in these affidavits. The parties agree that Fed.R.Civ.P. 43(e) grants this Court broad discretion to strike these affidavits. After considering the contentions of both sides, we deny the Board's motion in general and consider the affidavits for what they are worth.*fn31 However, where the affidavits overlap and contradict deposition testimony, we agree that the deposition testimony deserves greater weight. Also, the material in the affidavits is, for the most part, peripheral to the main issues. For example, the affidavits are irrelevant to the Government's fundamentally incorrect positions on the scope and pipeline issues. Nevertheless, where they do become relevant, we address specific allegations as necessary from time to time in making the various Findings below.

The United States' motion to strike various Board exhibits is likewise denied. These exhibits were submitted as a response to the United States' efforts to revise the history of the Consent Decree negotiations and the parties' early expectations concerning the Decree. In adopting Judge Shadur's findings above, we necessarily have rendered these Board exhibits unnecessary and the United States' motion to strike them moot. The rest of the Board's new exhibits bolster Judge Shadur's findings.

Without further ado, then, this Court under Fed.R.Civ.P. 52 enters the following Findings and Conclusions. Given the complex nature of the case, many of these Findings and Conclusions are hybrid, containing both factual and legal elements. To the extent a "Finding," or portion thereof, has been improperly labelled a "Conclusion," and vice versa, it should be considered as if it were properly labelled.

I. Background

A. Consent Decree Negotiations

101. The Chicago Board of Education operates the third largest public school system in the United States. In the 1980-81 school year, the 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, the Board had 458,497 students, whose racial/ethnic makeup was as follows:

        White Non-Hispanic       85,292     18.6%
        Black Non-Hispanic      278,726     60.8%
        Hispanic                 84,226     18.4%
        Asian/Indian             10,253      2.2%
                               --------
                                458,497

At the same time, the Board employed approximately 43,000 persons, including 29,000 members of the Chicago Teachers Union. The Board is the largest employer in Chicago and the second largest in Illinois. (March, 1984 Stipulation No. 101).*fn32

102. After protracted and complex negotiations, the United States and the Board of Education of the City of Chicago entered into a Consent Decree which was filed with and approved by this Court on September 24, 1980. (March, 1984 Stipulation No. 102).

103. After desegregation negotiations in 1979 between the former Department of Health Education and Welfare and the former representatives of the Board had proven 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 the Board. (Government Exhibit 1, June 1983 hearing, Document 27 hereinafter "GX1-27"). 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 which the Board would receive to implement such a plan. (GX1-21,22). Board counsel indicated that if the negotiations failed and litigation commenced, the Board would present counterclaims against agencies of the federal government. (GX1-39). There was no significant progress in these negotiations. (GX1-21, GX1-22). (March, 1984 Stipulation No. 103).

104. During the above negotiations, a new Board of Education was appointed and took office. (GX1-22). The new Board formed a Desegregation Committee (GX1-21) and indicated to the United States that it would bring fresh approaches to the negotiations (Id.). Thereafter the 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).

This progress resulted from an altogether different focus. Rather than seeking to negotiate the specific parameters of a student assignment plan, the parties instead agreed to general principles that would guide subsequent development of a plan. (Consent Decree, Part I). Correspondingly, with respect to funding, the parties negotiated a general principle applicable to both parties. These negotiations concerning 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 that
  no funding commitment specific as to form and
  amount could be made in the context of the
  Consent Decree, because there was no way to
  anticipate the nature and costs of the Board's
  Plan, the amount and sources of Government
  funding, or a variety of other matters. The
  parties briefly discussed funding possibilities
  relating not only to the Department of Education
  (including ESAA and other programs), but also
  other federal agencies

  such as the Department of Justice, the Department
  of Transportation, and the Department of Housing
  and Urban Development. Thereafter Mr. Ross
  conveyed to Mr. Howard by telephone brief
  descriptions (obtained by Mr. Ross from the
  Department of Education) of some of the types of
  planning and implementation activities funded in
  other instances. Mr. Ross also conveyed to Mr.
  Howard very sketchy information about grant
  amounts to other cities, but in general it was
  the position of the Department of Education that
  it would not disclose such information. These
  discussions took place approximately two months
  before the completion and execution of the
  Consent Decree. It was concluded that the matter
  of federal financial support would be handled by
  including general provisions in the Consent
  Decree, and Section 15.1 was drafted and
  incorporated into the Decree. Section 15.1 was
  not designed to incorporate any specific
  discussions between the parties on this issue,
  but to establish a general obligation on the part
  of both parties which would be interpreted and
  applied as appropriate in whatever future
  circumstances might arise.

Section 15.1 provides as follows:

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

The Consent Decree also includes Section 15.3, which provides:

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

(March, 1984 Stipulation No. 104).

    105. The Consent Decree was consummated by four
  events, all of which occurred on September 24,
  1980:

a. The filing of a Complaint by the United States;

b. The execution and filing of the Consent Decree;

c. After a hearing and after consideration of the Complaint, the Consent Decree and the United States' Memorandum of Law, the approval by the Court of the Consent Decree and its entry by the Court; and

d. No counterclaim was filed against the United States by the Board. (March, 1984 Stipulation No. 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
    number of stably desegregated schools,
    considering all the circumstances in Chicago.

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

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

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

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

    7.1 Remedial and compensatory educational
    programs.

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

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

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

    7.5 Testing, counseling, guidance and student
    welfare.

7.6 Physical facilities, safety and security.

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

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).*fn33 covering the subject matter outlined in § 7, in the development of which the Board would exercise discretion. (§ 3.1). (March, 1984 Stipulation Nos. 101-106).

108. Circumstances surrounding entry of the Decree indicate that a joint and mutual obligation was contemplated. The 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 supervision. The Decree 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 use of expensive compensatory educational remedies to alleviate the effects of past segregation. In 1980, as now, the Board was faced with significant financial deficits, and the joint funding provision of the Consent Decree reflected recognition that the Board's finances were such that it could not voluntarily agree to develop, or successfully implement, an effective desegregation plan of this type unless the federal government were sharing the financial burdens. (March, 1984 Stipulation Nos. 101-156; June 1983 Findings and Plan/ADR data on Board finances).

108A. The United States' financial commitment under Section 15.1 was the principal quid pro quo for the Board's willingness to forego litigation and develop the Plan. In return for this commitment, the United States secured the full result that 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).

109. Stated simply, the parties had a common and overriding 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 amount of funds adequate for implementation of the Plan. In Section 15.1, each party agreed to do everything possible to supply the necessary funding. (March, 1984 Stipulation Nos. 101-156; June 1983 Findings and Plan/ADR data on Board finances).

110. With respect to "What the parties reasonably expected at the time of signing," the parties' Joint Stipulation (Government's Exhibit 2, June, 1983 hearing, hereinafter "GX")*fn34 states that:

    Section 15.1 was not designed to incorporate
  any specific discussions between the parties [on
  the issue of federal financial support], but to
  establish a general obligation on the part of
  both parties

  which would be interpreted and applied as
  appropriate in whatever future circumstances
  might arise.

(March, 1984 Stipulation No. 107). The extrinsic evidence concerning this issue does not support any notion that there was a recognized specific dollar limitation incorporated in Section 15.1, based on the amount of previous ESAA grants or otherwise. Indeed, the Joint Stipulation indicates that 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 the Department of Housing and Urban Development."*fn35 As this Court has determined previously, the extrinsic evidence 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 available to the Board. (March, 1984 Stipulations 101-106; Government Exhibits 1and 2 in the June 1983 hearing).

111. The Consent Decree in this case is the only instance in which the United States has entered into a desegregation settlement or decree containing the language of § 15.1. (March, 1984 Stipulation No. 107).

  B.  Development Of Part I Of The Plan, The Educational
      Components

112. To develop the educational components of the Desegregation Plan, the Board retained a team of independent, nationally recognized consultants. The lead consultant, with principal overall responsibility for this process, was Dr. Robert L. Green. He is now the President of the University of the District of Columbia. Dr. Green was then Dean of the College of Urban Development, Michigan State University. Dr. Green was a leading national expert on desegregation plans, especially the aspect of desegregation which emphasizes educational programs to provide equal and effective 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. (March, 1984 Stipulation No. 108).

113. Five other education experts from outside the school system were retained on a full-time basis to work on the Educational Components, along with 24 part-time "national consultants." The primary national consultant in the area of curriculum was Professor Ronald Edmonds. While on the faculty of the Harvard Graduate School of Education, Dr. Edmonds 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. (Dr. Edmonds is now deceased.) The complete list of desegregation project consultants 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
      East Lansing, Michigan

  Judson Hixson, M.A., Staff Associate
      Education Director on Leave
      Chicago Urban League
      Chicago, Illinois

  Jodi Martinez-Martin, Ed.D., Consultant
      Teacher Education Specialist
      Illinois State Office of Education
      Springfield, Illinois

  Frances S. Thomas, Ph.D., Consultant
      Assistant Professor
      College of Urban Development
      Michigan State University
      East Lansing, Michigan

Primary National Consultants

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

Development:    Dr. Cassandra Simmons
                    Assistant Professor and Director,
                    Office of Student Affairs

                Michigan State University
                East Lansing, Michigan

Additional Consultants and Resource Persons

  Dr. Beatriz Arias             Dr. Josue Gonzalez
  Stanford University           Office of Education
  Stanford, CA                  Washington, D.C.

  Ms. Norma Barnes              Dr. Robert J. Griffore
  Norma Barnes Associates       Michigan State University
  Chicago, IL                   East Lansing, Michigan

  Dr. Samuel Betances           Dr. James Hawkins, Supt.
  Northeastern Illinois Univ.   Benton Harbor Public Schools
  Chicago, IL                   Benton Harbor, MI

  Dr. Duane Brown               Ms. Maureen Larkin
  University of North Carolina  Milwaukee Public Schools
  Chapel Hill, NC               Milwaukee, WI

  Dr. Robert Crain              Dr. Jane Mercer
  Johns Hopkins University      University of California
  Riverside, CA                 Baltimore, MD

  Ms. Jane Creeden Dore         Dr. Margaret Parsons
  Freelance Editor/Writer       Michigan State University
  Chicago, IL                   East Lansing, MI

  Dr. Joseph Darden             Ms. Rachel Patrick, J.D.
  Michigan State University     American Bar Association
  East Lansing, MI              Chicago, IL

  Dr. Harold Dent               Dr. Diana Pearce
  Westside Community Mental     Center for National Policy
    Health Center                 Review
  San Francisco, CA             Washington, D.C.

  Dr. Edgar Epps                Mr. Joseph Rosen
  University of Chicago         Educational Consultant
  Chicago, IL                   Chicago, IL

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

  Dr. Walter Farrell            Ms. Rebecca Yarlott
  University of Wisconsin       Minneapolis Public Schools
  Milwaukee, WI                 Minneapolis, MN

(March, 1984 Stipulation No. 109).

114. During the development of the Educational Components from November 1980 through March 1981, the Board submitted monthly progress reports to the Department of Justice, as required by the Consent Decree. (March, 1984 Stipulation No. 110).

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

A.  Introduction

B.  Educational Components

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

C.  Staff Development

D.  Other Components

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

E.  Appendix

(March, 1984 Stipulation No. 111).

116. The following statements about Plan costs appeared in 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 development of the desegregation plan,
  the planning process has been addressed to the
  formulation of programs that would be desirable to
  effectuate the purposes of the Decree.

    2. It has not yet been possible to determine
  the financial feasibility of the programs — i.e.,
  the administrative details of the programs, the
  exact costs associated with the various elements of
  the plan, the extent to which these costs can be
  met from existing resources or require new funding,
  and the availability of such new funding. (p. 17).

    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). (p. 19).

(March, 1984 Stipulation No. 112).

117. Prior to the Consent Decree the Board's desegregation programs were administered by a staff of 3 persons. Shortly after the initial adoption of the Educational Components, the Board created a special Office of Equal Educational Opportunity to coordinate the implementation of the Plan. Up to March, 1985, that office was headed by Dr. Nelvia Brady, Associate Superintendent, who was a member of Dr. Green's original desegregation planning staff. The staff of that office has expanded continuously since 1981, and in March, 1984 was comprised of 53 persons, of whom 8 are clerical staff, 8 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 educational professionals (72.5%) have their principal responsibilities in the area of implementing the Educational Components of the Desegregation Plan. (March, 1984 Stipulation No. 113).

  C.  Statements Of The United States And The 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 concerning desegregation remedies, Mr. Smith Stated:

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

    Rather than focusing solely on the means by
  which discrimination has been practiced in the
  past, it is time we devoted more attention to
  remedying the resulting harms actually being
  suffered today. We should emphasize those
  remedies that actually improve the quality of
  education. Rather than continuing to insist in
  court that the only and best remedy for
  unconstitutional segregation is pupil
  reassignment through busing, the Department of
  Justice will hence forward propose remedies that
  have the best chance of both improving the
  quality of education in the schools and promoting
  desegregation. (Pages 8-9).

(March, 1984 Stipulation No. 114).

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

  a. With respect to the provision of the Consent
    Decree concerning providing compensatory
    programs in schools remaining segregated: "This
    principle is based squarely on common sense and
    Supreme Court holdings. The method of
    compliance with this objective is largely
    within the discretion of the Board, which has
    the expertise in educational methods." (Page
    5).

  b. In the same Response, the United States
    briefly summarized the Educational Components
    and stated that "the Government endorses" them.
    (Page 22).

  c. Finally, the United States' Response further
    evaluated the Educational Components as
    follows:

      The Educational Components have been more
    fully developed than the student assignment
    principles. The Board hired an impressive team
    of nationally known experts and the Plan
    reflects the substantial time and effort that
    has gone into the preparation of the
    Educational Components. The Board and its
    planners deserve a great deal of credit for the
    accomplishment of this task. We expect that
    when these new educational programs are
    developed in detail and implemented, they will
    complement the student assignment principles by
    enhancing the workability of voluntary
    desegregation techniques and that they will
    contribute to bringing about equality of
    educational opportunity in the one-race schools
    which remain under the final plan. (Pages
    32-33).

(March, 1984 Stipulation No. 115).

120. On August 28, 1981, the United States and the Board submitted their Joint Statement to the Court concerning the development of the Desegregation Plan. With respect to the Educational Components, the Joint Statement informed the Court that:

  the Board and the United States are in agreement
  in these general respects: . . .

  (2) the Educational Components are an integral
  and necessary aspect of the Board's Plan. They
  are consistent with the Consent Decree and the
  Constitution. The United States fully endorses
  the Educational Components from a legal
  perspective, although it views the particular
  educational policy choices as within the Board's
  discretion. (Page 5).

(March, 1984 Stipulation No. 116).

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

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

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

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

(March, 1984 Stipulation No. 117).

122. In school year 1981-82, the Board submitted quarterly progress reports to the United States and to the Court, detailing the process of implementating the Desegregation Plan, including the Educational Components. (March, 1984 Stipulation No. 118).

123. In February and March of 1982, following the adoption of the Board's Comprehensive Student Assignment Plan, the Court entertained briefs concerning the compliance of the total Desegregation 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 Urban League stated:

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

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

The Urban League expressed concern that the Board had only committed itself to provide "Milliken II relief" to the extent that funds are available.

The NAACP, in its July 1981 memorandum of the Plan, stated that "we have no specific objection to the content of these programs." In its March 1982 brief, NAACP did not comment further on the Educational Components. (March, 1984 Stipulation Nos. 119, 133).

124. In January 1983 the Court issued its opinion approving the Board's Plan as being clearly within the broad range of constitutionally acceptable plans. With respect to the Educational Components and funding, the Court's opinion stated:

    Educational Components. As already indicated, the
  Educational Components of the Plan were in
  definitive form well before the assignment
  provisions that have occupied the discussion in
  this opinion, and those Educational Components have
  not drawn the same heated attention. They were
  approved early by the United States and found favor
  with the NAACP as well. To the extent they have
  been criticized (chiefly by the Hispanic
  organizations and by Designs for Change), the
  criticisms did not go to claimed constitutional
  insufficiency and are therefore not within the
  province of this Court's overview. Though they of
  course continue to form a vital part of the
  purposes and hoped-for impact of the Plan — the
  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 master of its own fate. If and to the
  extent other governmental bodies and agencies that
  control the pursestrings were to thwart the Board's
  ability to perform in the way its Plan contemplates
  and the Constitution requires, this Court would
  have to examine all appropriate and available
  remedies. There is no reason to presume at this
  time that any such delinquency in meeting the
  mandates of the Constitution, or any such resulting
  power confrontation, will occur.

(March, 1984 Stipulation No. 120).

125. The Board's 1983 Annual Desegregation Review, Part I, filed April 15, 1983, contained a section on "Financial Aspects" at pp. 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, spending specifically budgeted for this
  component of the Desegregation Plan has fallen
  somewhat short of this originally projected level
  in the first two years of implementation. As a
  result, the Board believes it to be appropriate
  to attempt to make up the difference in
  subsequent years. Hence, the Board believes to be
  desirable to spend at least $40 million in
  1983-84, as opposed to the $20 million initially
  prescribed by the Principles. However, the funds
  needed to provide for this level of expenditure
  simply are not available from within the Board at
  this time.

    Over and above the level of expenditures for
  1983-84 described above, additional

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

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

    Thus, at this time precise estimates of the
  Board's financial condition for future years are
  slightly premature. However, it may be fairly
  stated that for 1983-84 the Board faces budget
  problems of an extremely serious magnitude.
  Preliminary projections suggest it is facing a
  budget deficit in the range of $200 million . . .
  In any event the Board believes that, in the
  first instance, the obligation to provide these
  additional resources for the substantial
  expenditures which full and complete
  implementation of the Plan entails lies with the
  federal and state governments.

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

(March, 1984 Stipulation No. 121).

126. The Board's statements concerning 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 those purposes, including the statements described in Findings 116 and 125, do not reflect any determination by the Board that the expenditure of $40 million would be "adequate" for that aspect of the Plan (in terms of § 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. (March, 1984 Stipulation Nos. 101-121; Parts I, II and III of the Plan).

127. In August 1983, the Board filed Part II of its 1983 Annual Desegregation Review, a 416-page document which reported in detail on the implementation of the Educational Components ("ADR II"). After the filing of ADR II, the 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. (March, 1984 Stipulation No. 122).

128. The United States strongly supported (indeed, insisted upon the inclusion of) the Board's Educational Components as the developmental process moved from the Consent Decree principles to the April 1981 Educational Components Plan to approval by the Court, and raised no subsequent objection as the Board proceeded to add programmatic details to those initial documents. Only when called upon to fulfill its financial responsibility did the United States begin to renege on its approval. (March, 1984 Stipulation Nos. 101-122, 133).

D. Overview Of The Student Assignment Plan

129. By the Consent Decree, the Board agreed to adopt a system-wide desegregation plan with two basic objectives. The first (§ 2.1) was to create the greatest practicable number of stably desegregated schools, considering all the circumstances in Chicago. The second objective, as described above, was to provide educational and related programs for schools which remained racially isolated. (March, 1984 Stipulation No. 123).

130. In January, 1982, the Board adopted its Comprehensive Student Assignment Plan. The Student Assignment Plan divides all schools in the school system into four broad categories. The first category is that of residentially integrated schools. (An integrated school is defined as one whose enrollment includes at least 30% white children and 30% minority children, derived principally from residential or other natural attendance patterns.) The Plan identifies two basic types of schools within this category — stably integrated and integrated but with potential for change. A third type — schools which are currently integrated but whose enrollment of white children is projected to decline below 30% — is also identified.*fn36 As of October 1981 these three types of schools encompassed 67 schools with an enrollment of 52,067 students. (The enrollment data in Findings 130 through 134 excludes preschool and kindergarten children.) (March, 1984 Stipulation No. 124).

131. The Plan next considers the category of the desegregated school — one whose enrollment includes at least 30% white children and 30% minority children, which has been established primarily by student assignment techniques under the Plan. This category consists both of (a) schools which have previously achieved stably desegregated status through the implementation of various student assignment measures (as of 1981, 42 schools with 20,329 students) and (b) schools which in 1981 were yet to achieve desegregated status, through previously existing and newly adopted student assignment techniques (in 1981, 33 schools with 17,541 students). These techniques include voluntary transfer programs and magnet and magnet-type programs within schools. (March, 1984 Stipulation No. 125).

132. The Plan also describes various magnet-type schools which are established primarily in minority communities and are designed to promote desegregation by special educational offerings and programs. A target enrollment composition, generally 15-35% white, 65-85% minority, is established for each school in this category. These schools included, in 1981, 41 magnet schools, scholastic academies and metropolitan high schools, enrolling 28,824 students. (March, 1984 Stipulation No. 126).

133. The Student Assignment Plan also considers those 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. The Plan describes why these schools cannot practicably be desegregated. The Plan also describes the compensatory educational arrangements which will be provided for at these schools and the various voluntary transfer arrangements in which students enrolled at these schools may participate. (March, 1984 Stipulation No. 127).

134. The school types identified in the Plan, and the number and enrollment of these schools, is summarized in the following table:

                                                   1981
Integrated Schools:               Number          Enr.*fn37
------------------
    Stably integrated               42               31,791
    Integrated schools stable
    but projected to become
    mixed                           11                7,697

Integrated schools with
   potential for change             14                12,579
                                    --                ------
   Subtotal                         67                52,067

 Schools Desegregated and to
 ---------------------------
 be Desegregated:
 ----------------

   Schools presently
   desegregated                     42                20,269
   Schools to be desegregated       33                17,541
   Magnet schools                   29                16,765
   Scholastic Academies —
   1982                              6                 2,406
   Metropolitan High
   Schools — 1982                  6
9,653
                                  ----                 -----
   Subtotal                        116                66,634

 Predominantly Minority
 ----------------------
 Schools:
 --------

   Stable mixed (15-29%
   white)                           14                 11,481
   Mixed with potential for
   racial change                    20                 14,695
   Schools more than 85%
   minority                        320                236,248
                                   ---                -------
   Subtotal                        354                262,424

 Special Needs/Special
 ---------------------
 Admissions:
 -----------

   Physicially handicapped,
   apprentice, adult education,
   bilingual centers, juvenile
   detention and pregnant
   students                         43                  9,173
                                   ---                -------
   Total                           580                403,668

*fn37 All enrollments excluding 39,221 preschool and kindergarten children. 25 child-parent centers omitted.

(March, 1984 Stipulation No. 128).

135. Two mandatory requirements were established by the Desegregation Plan. The first of these requirements is that every school achieve by October 1983 a minority enrollment of at least 30%. The second is that, by October, 1983, the school system as a whole achieve a minimum total enrollment in all integrated and desegregated schools (including magnet schools). (This requirement is generally referred to as the "desegregation index" requirement.) (March, 1984 Stipulation No. 129).

136. The Plan sets forth other student assignment 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 these provisions are ones concerning school closings, boundary adjustments and within-school segregation. (March, 1984 Stipulation No. 130).

137. The Student Assignment Plan also contains, in a separate volume, school-by-school analyses for each school in the system. These analyses describe in summary terms the work and consideration that went into developing a desegregation strategy 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. (March, 1984 Stipulation No. 131).

138. Detailed evaluation of the student assignment component of the Desegregation Plan, including analysis of enrollment composition and prescription of specific actions for over 200 individual schools, is undertaken every year. This evaluation is reported on in an Annual Desegregation Review ("ADR"). (March, 1984 Stipulation No. 132).

139. After the adoption of the Comprehensive Student Assignment Plan in January 1982, the United States filed its Assessment of the Plan. That 33-page document explained the United States' belief that the Plan is constitutional and consistent with the Consent Decree. In the conclusion, the United States stated:

    We believe that, for the reasons stated in
  these comments, once the plan has been thoroughly
  implemented and the Educational Components
  completed, the Board will have: (a) provided a
  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.

(March, 1984 Stipulation No. 133).

140. On January 6, 1983, the Court issued its opinion concerning the Plan. (554 F. Supp. 912 (N.D.Ill. 1983)). In its opinion, the 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. (554 F. Supp. at 914-15). The Court further noted that 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, the Court found that "nothing in the execution of the Plan has been shown to disprove the premises on which it was designed." (554 F. Supp. at 915). Finally, having reviewed the Plan in detail, the Court approved it as being "clearly within the broad range of constitutionally acceptable plans." (554 F. Supp. at 928). (March, 1984 Stipulation No. 134).

141. In April 1983 the Board's Annual Desegregation Review (Part I, Student Assignment) ("ADR I") showed that the implementation of the Plan during school year 1982-83 was a considerable success, and that to a very significant degree its projections of student assignment out-comes had been realized. ADR I was also candid in its assessment of shortcomings, and in adopting measures to address them. (March, 1984 Stipulation No. 135).

142. In its May 1983 response to ADR I, the United States favorably evaluated the Board's substantive implementation process:

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

    Our first comment is on the review process
  itself. We know of no other school board, large
  or small, that has made as comprehensive,
  detailed and careful examination of what it is
  doing to implement a desegregation plan. (Pages
  1-2).

    We think that the overall plan implementation
  process has been excellent and that the Board has
  applied it in good faith at each school. . .
  Should the Board fail to take the remedial steps
  recommended in the review or otherwise fail to
  take the steps necessary to fulfill the plan's
  promise, the plan's present constitutional
  sufficiency would suffer. At this point, we have
  no reason even to suspect that this is a
  possibility. (Pages 4-5).

(March, 1984 Stipulation No. 135).

143. The mandatory requirements of the Student Assignment Plan (Finding 135) are applicable as of October 1983. On November 2, 1983, the Board informed the Court that the requirement of 30% minimum minority enrollment in all schools had been met. (March, 1984 Stipulation No. 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. These data are comparable with Finding 134, but it should be noted that there has been some recategorization of schools to reflect the experience of the ensuing two years. As in Finding 134, these data exclude kindergarten students; therefore the total enrollment shown is grades 1-12, which is 41,260 students less than system-wide enrollment.

                                                     1983
  Integrated Schools:               Number          Enr.*fn38
  -------------------
    Stably integrated                   47           36,569

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

    Integrated schools with
    potential for change                 4            5,033
                                        --           ------
    Subtotal                            55           43,611

  Schools Desegregated and to
  ---------------------------
  be Desegregated:
  ----------------
    Schools presently desegregated      77            42,382
    Schools to be desegregated           0
    Magnet schools                      33            19,155
    Scholastic Academies —
    1982                                 5             3,092
    Metropolitan High
    Schools — 1982                     6
10,302
                                       ---            ------
    Subtotal                           121            74,931

  Predominantly Minority
  ----------------------
  Schools:
  --------
    Stable mixed (15-29%
    white)                              17            12,683
    Mixed with potential for
    racial change                       10             8,065
    Schools more than 85%
    minority                           334           248,161
                                       ---          --------
    Subtotal                           361           268,909

  Special Needs/Special
  ---------------------
  Admissions:
  -----------
    Physicially handicapped,
    apprentice, adult education,
    bilingual centers, juvenile
    detention and pregnant
    students                            43             5,331
    Total                              580           392,782

*fn38 All enrollments excluding 41,260 preschool and kindergarten

(March, 1984 Stipulation No. 128).

  E.  Demographics Of The City Of Chicago And Of The
      Chicago Public Schools

145. Extensive demographic information is presented in both the Comprehensive Student Assignment Plan (pages 8-39) and in 1983 ADR I (pages 20-23). (March, 1984 Stipulation No. 139).

146. The 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.     %          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

(March, 1984 Stipulation No. 140).

147. The 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

===========================================================================================
                            White              Black             Other          Hispanic
                      ----------------------------------------------------------------------
  Year   Membership     No.        %        No.       %        No.     %       No.        %
--------------------------------------------------------------------------------------------
  1970    577,679     199,669    34.6     316,711    54.8    4,925     .9    56,374      9.7
  1971    574,495     188,312    32.8     320,797    55.8    5,608    1.0    59,778     10.7
  1972    558,825     173,143    31.0     317,975    56.9    5,729    1.0    61,978     11.1
  1973    544,971     160,846    29.5     314,089    57.6    6,306    1.2    63,730     11.7
  1974    536,657     151,290    28.2     310,880    57.9    6,535    1.2    67,952     12.7
  1975    526,716     141,264    26.8     307,549    58.4    7,589    1.5    70,314     13.4
  1976    524,221     130,785    24.9     311,261    59.4    8,343    1.6    73,832     14.1
  1977    512,052     118,713    23.2     306,997    59.9    9,071    1.8    77,271     15.1
  1978    494,988     106,581    21.5     299,590    60.5    9,191    1.9    79,526     16.1
  1979    477,339      95,513    20.0     289,920    60.7    9,958    2.1    81,948     17.2
  1980    458,497      85,292    18.6     278,726    60.8   10,253    2.2    84,226     18.4
  1981    442,889      76,112    17.2     269,019    60.7   11,003    2.5    86,755     19.6
  1982    435,843      71,171    16.3     264,530    60.7   11,396    2.6    88,746     20.4
  1983    434,042      67,829    15.6     263,163    60.6   11,283    2.6    91,763     21.2

(March, 1984 Stipulation 141)

148. One principal reason that 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 non-public schools in Chicago, especially the Catholic parochial schools. The metropolitan-area enrollment of nearly 190,000 students makes the Catholic schools the fifth largest school system of any kind in the United 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. (March, 1984 Stipulation No. 142).

149. Total membership in the Chicago public schools leveled off in 1984 after 15 years of decline that were often characterized by very substantial drops. The decline in total membership this year is only about 1,800 (0.4%) compared to almost 19,000 (3.9%) in 1980. [Enrollment was 372,278 in 1952. Student membership increased quite dramatically in the 1950's and the 1960's, reaching a peak in 1969 at 580,292. Since then enrollment has declined, generally at the rate of 2-4% per year, with the greatest declines between 1977-1981 (over 15,000 students, or 3-4%, per year). The decline was 1.6% (7,046 students) in 1982 and only 0.4% (1,800 students) in 1983.] (March, 1984 Stipulation No. 143).

150. Enrollment of white students (67,829 or 15.6% systemwide in October, 1983) has declined at a significantly slower rate since adoption of the Desegregation Plan. From 1977-1981 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). (March, 1984 Stipulation No. 144).

151. In October 1983, Black students numbered 263,163 (60.6% systemwide). The 1983 decline in black enrollment of 1,367 students (0.5%) is significantly lower than declines of 2-4% in the preceding five years. (March, 1984 Stipulation No. 145).

153. The Board's demographers believe that the enrollment changes summarized in Findings 149-152 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 opportunitites for
  potential high school dropouts; high mortgage rates
  which have slowed down the housing market and, in
  turn, the rate of suburbanization.

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

(March, 1984 Stipulation No. 147).

154. During the past two years of relatively stable enrollments, an important factor contributing to changes is the transfer rate between public and non-public schools. The following table reflects that the Chicago public schools have been gaining more students and losing fewer since 1980:

STUDENT TRANSFERS TO/FROM NONPUBLIC SCHOOLS IN CHICAGO

                                 1980        1981      1982
                                 ----        ----      ----
Transfers from Non-public
  Schools in Chicago             6,084       7,041    7,934

Transfers to Non-public
  Schools in Chicago            12,919      11,648   10,177
                                ------      ------   ------
    Net Loss                     6,935       4,607    2,243

Total Membership               458,497     442,889  435,843

Percentage Net Loss           1.5%        1.0%     0.5%

(March, 1984 Stipulation No. 148).

155. The recent trend of enrollment decline in the Chicago public schools appears to have ended in school year 1983-84. 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. (March, 1984 Stipulation No. 149).

156. The 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. This data is briefly summarized as follows:

Type of         Total
School         Students         White              Black          Hispanic          Other
----------------------------------------------------------------------------------------------
                             #        %         #        %        #       %        #        %
----------------------------------------------------------------------------------------------
Elementary     314,771    44,592     14.2    191,163    60.7    71,287   22.7    7,729     2.5
Secondary      111,557    21,216     19.0     67,770    60.7    19,206   17.2    3,365     3.1
Special          7,714     2,021     26.2      4,230    54.8     1,274   16.5      189     2.4
System-wide    434,042    67,829     15.6    263,163    60.6    91,767   21.2   11,283     2.6

(March, 1984 Stipulation No. 150).

156A. As of October 31, 1984, the Board was operating 495 elementary level, 64 secondary level and 26 special schools. (U.S. no contest).

156B. As of October 31, 1984, there were 312,365 children attending elementary level Chicago public schools. Of this total, 42,303 (13.5%) were white; 188,979 (60.5%) were black; 72,941 (23.4%) were Hispanic and the remainder (2.6%) were American Indian, Alaskan Native, Asian or Pacific Islander. (U.S. no contest).

156C. As of October 31, 1984, there were 111,097 children attending secondary level Chicago public schools. Of this total, 19,154 (17.2%) were white; 68,206 (61.4%) were black; 19,921 (17.9%) were Hispanic; and the remainder (3.5%) were American Indian, Alaskan Native, Asian or Pacific Islander. (U.S. no contest).

156D. As of October 31, 1984, 7,764 children were attending Special Schools operated by the Board. (U.S. no contest).

157. The 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. (March, 1984 Stipulation No. 151).

SUMMARY OF OCTOBER 31, 1983, STUDENT RACIAL/ETHNIC SURVEY

(By Level and Type of School)

ELEMENTARY LEVEL

                                                                                                      AMERICAN           ASIAN OR
                                       TOTAL             WHITE                    BLACK             IND. ALASKAN          PACIFIC                                                                   OTHER             TOTAL
          TYPE OF SCHOOL              STUDENTS        NON-HISPANIC             NON-HISPANIC            NATIVE            ISLANDER           MEXICAN          PUERTO RICAN         CUBAN            HISPANIC          HISPANIC
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  NO.                                               #              %           #         %          #          %        #        %        #         %          #        %       #       %        #        %         #        %
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 400    Regular Elementary*fn*       271,769    39,010           14.4     163,212      60.0       400        0.1     6,136     2.3    38,621      14.2     20,059     7.4    696      0.3     3,635     1.3     63,011     23.2
  19    Academic Magnet Centers*fn*   11,715     2,653           22.6       5,910      50.4        19        0.2       305     2.6     1,843      15.7        735     6.3     55      0.5       195     1.7      2,828     24.1
  14    Community Academies            11,155       112            1.0       8,635      77.4        13        0.1        73     0.6     1,343      12.0        903     8.0      4      0.3        72     0.6      2,322     20.8
   6    Scholastic Academies            3,849     1,161           30.2       1,876      48.7        22        0.6       224     5.8       321       8.3        169     4.4     14      0.4        62     1.6        556     14.7
   6    Language Academies              2,445       899           36.8       1,006      41.2         8        0.3        66     2.7       353      14.4         67     2.7      3      0.1        43     1.8        466     19.1
   5    Classical Schools               1,209       368           30.4         660      54.6         6        0.5        75     6.2        50       4.1         36     3.0     —      —       14     1.2        100      8.3
   6    Middle Schools                  5,348       253            4.7       4,159      77.8        33        0.6       216     4.0       219       4.1        404     7.6      6      0.1        58     1.1        687     12.9
   4    Upper Cycles                    2,058        93            4.5         867      42.1         4        0.2       107     5.2       880      42.8         70     3.4      7      0.3        30     1.5        987     48.0
   7    E V G Centres                     795         6            0.8         718      90.3        —        —       —     —       21       2.6         49     6.2     —      —        1     0.1
71      8.9
  25    Child Parent Centers            4,428        37            0.8       4,120      93.0         3        0.1        19     0.4       115       2.6        127     2.9     —      —        7     0.2        249      5.6
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 492            Totals                314,771    44,592           14.2     191,163      60.7       508        0.2     7,221     2.3    43,766      13.9     22,619     7.2    785      0.2     4,117     1.3     71,287     22.7
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                                                     SECONDARY LEVEL
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  44    General/Technical*fn*         76,632    17,255           22.5      42,097      54.9        94        0.1     2,046     2.7     7,351       9.6      6,277     8.2    230      0.3     1,282     1.7     15,140     19.8
   9    Vocational*fn*                13,970       665            4.8      12,394      88.7         7        0.1        57     0.4       508       3.6        266     1.9     10      0.1        63     0.4        847      6.1
   7    Metropolitan                   10,332     2,414           23.4       4,967      48.0        65        0.6       905     8.8     1,363      13.2        311     3.0     78      0.8       229     2.2      1,981     19.2
   5    Academies/Magnet Schools       10,623       882            8.3       8,312      78.2         6        0.1       185     1.7     1,084      10.2        118     1.1      6      0.1        30     0.3      1,238     11.7
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  65            Totals                111,557    21,216           19.0      67,770      60.7       172        0.2     3,193     2.9    10,306       9.2      6,972     6.3    324      0.3     1,604     1.4     19,206     17.2
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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


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