District Court, two orders; District Court, notice of appeal; District Court, motion to release incentive school Kindergarten seats; District Court, notice of appeal; District Court, motion for taxation of costs; District Court, brief in support of motion for taxation of costs; District Court, order; District Court, opposition of Joshua intervenors to motion to release incentive school Kindergarten seats; District Court, motion for reconsideration; District Court, motion for additional enlargement of time; District Court, motion for reconsideration regarding Little Rock School District's (LRSD's) motion to release incentive school Kindergarten seats; District Court, Pulaski County Special School District (PCSSD) response to Pulaski Association of Classroom Teachers (PACT's) motion for taxation for costs and PCSSD's cross-petition for attorneys' fees; District Court, brief in support of Pulaski County Special School District (PCSSD) cross-motion for attorneys' fees; District Court, two orders, District Court, Arkansas Department of Education's (ADE's) response to Little Rock School District (LRSD), Pulaski County Special School District (PCSSD), and North Little Rock School District's (NLRSD's) motion for additional enlargement of time The transcript for this item was created using Optical Character Recognition (OCR) and may contain some errors. - IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DMSION LITTLE ROCK SCHOOL DISTRICT, * * Plaintiff, * * vs. * No. LR-C-82-866 * PULASKI COUNTY SPECIAL SCHOOL * DISTRICT No. 1, ET AL., * * Defendant. * * MRS. LORENE JOSHUA, ET AL., * * FILED U.S. DISTRICT COURT EASTERN DISTRICT ARKANSAS MAYO o 1997 JAMES '(ii. Mc.fORMACK, CLERK By: '{._~t, /\ N'>i L':-> _ OEP CL.ERK Intervenor. * MAY 7 \997 * KATHERINE KNIGHT, ET AL., * OFFICE OF * DESEGREGATION MONITORING Intervenor. * * SERVICEMASTER MANAGEMENT * SERVICES, A Limited Partnership, * * Intervenor. * ORDER Before the Court is the motion of 111 school districts throughout the State of Arkansas to intervene for the purpose of appealing this Court's Order of April 22, 1997, regarding health insurance matching. The motion is granted. appeal. The applicants may intervene in this case only for the purpose of prosecuting the DATED this {a~ay of May 1997. ~.~~,y UNITEDSTA DICJUDGE fl-IS DOCUMENT ENTERED ON DOCKET SHEET IN co~ WITH RULE. 5e AND,100 79(a) FACP ON ~ 6-7 IV 1Jt:: 2974 IN THE UNITED STATES DISTRICT COURT EASTERN DISTIUCT OF ARKANSAS WESTERN DIVISION LITILE ROCK SCHOOL DISTRICT, * * Plaintiff, * * vs. * No. LR-C-82-866 * PULASKI COUNTY SPECIAL SCHOOL * DISTRICT No. 1, ET AL., * * Defendant. * * MRS. LORENE JOSHUA, ET AL., * * Intervenor. * * KATHERINE KNIGHT, ET AL., * * Intervenor. * * SERVICEMASTER MANAGEMENT * SERVICES, A Limited Partnership, * * Intervenor. * ORDER f5l~D u s o:sr:.:cr couRr EASTERN DISTR!CT ARKANSAS MAYO 6 1997 JAMOS '/1. McGU~ACK, CLERK By: \i ' \.lJ\ f\J~ ~ DEP CLERK In November 1996, the Office of Desegregation Monitoring ("ODM") submitted its proposed 1996-97 budget to the Court for approval. The Pulaski County Special School District ("PCSSD"), the Joshua Intervenors, and the Arkansas Department of Education (" ADE") filed objections to the budget. For the reasons that follow, the Court hereby .. approves the budget. 2975 I. The ODM is funded through contributions from the three Pulaski County school districts and the State. The State's share is $200,000.00, which is based on the amount that the State was paying the Pulaski County Educational Cooperative in 1989, the date of the desegregation Settlement Agreement. Each district's share is determined on a per-pupil prorated basis. See Little Rock School District v. Pulaski Counry Special School District No. 1, 716 F. Supp. 1162, 1165 (E.D. Ark. 1989). The 1996-97 budget submitted by the ODM shows a marked increase in the Benefits category, from a budgeted amount of $49,613.00 in 1995-96 to a budgeted amount of $120,109.00 in 1996-97. The ODM states the increase is due to changes in the State's method of handling health insurance premiums and teacher retirement. In the past, the State directly - funded teacher retirement matching and health insurance payments for the State's school districts. Employees of the ODM were included in the list of employees the LRSD sent to the Teacher Retirement System, and the State paid contributions into the Retirement System on behalf of ODM employees. The State also paid 50% of the health insurance. Under the new State funding formula, no school district receives any money fnm the S;:ate that is specifically earmarked for the payment of teacher retirement and health benefits. Rather, Arkansas school districts are required to fund health insurance and teacher retirement out of state equalization funding or local funds. 1 1As applied to the three Pulaski County school districts, the Court recently found that the new funding scheme for teacher retirement and health insurance benefits violates the terms of the Settlement Agreement between the State and the settling districts. See doc. 2930 & doc. 2967. The ruling on teacher retirement is now on appeal to the Eighth Circuit, and the Court uooerstuxls the ruling on health insurance benefits also will be appealed. 2 The PCSSD objects to the budget, asserting that the State's decision to terminate the payment of teacher retirement and health insurance benefits for ODM employees results in an increased contribution by the PCSSD to the ODM budget. The PCSSD asks the Court to direct the State to increase its base level of support for the ODM to the same level that it supports educational cooperatives. The ADE objects to the ODM's proposed budget, contending that the State is not responsible for paying retirement or health benefits for ODM employees and that ODM employees were and are ineligible to participate in the teacher retirement system. Finally, the Joshua Intervenors object to the ODM budget because they believe the ODM should employ three additional monitors in order to handle and investigate complaints of discriminatory treatment of black students. II. In Little Rock School District v. Pulaski County Special School District No. 1, 716 F. Supp. 1162, 1165 (E.D. Ark. 1989), Judge Woods directed the ADE to apply "the amount previously ordered for the Pulaski County Educational Cooperative" toward the budget of the Office of the Metropolitan Supervisor ("OMS"). The court further authorized the Supervisor to employ a professional staff of up to four people and stated: "In addition to each district's portion of Mr. Reville' s salary, it should add an amount equal to its portion of fringe benefits (e.g. hospitalization insurance), using the percentage used in calculating fringe benefits for the highest ranking person in that district. This 'fringe benefit' amount will apply toward offsetting the penalty Mr. Reville will suffer by leaving the New York pension program prior to the expiration of his six-year contract in Buffalo." .. 3 In December 1990, the Eighth Circuit Court of Appeals replaced the OMS with the . ODM, see Little Rock School District v. Pulaski County Special School District No. 1, 921 F.2d 1371 (8th Cir. 1990), and in February 1991, this Court found that the State was obligated to continue funding ODM according to its previous obligation. See doc. 1442 (Order filed on February 28, 1991). In July 1991, the Court directed the LRSD, "in the interest of administrative efficiency," to "provide payroll services to the Office of Desegregation Monitoring (ODM) for all ODM staff designated by the Desegregation Monitor." See doc. 1480. The employees of ODM have been listed as LRSD employees in reports submitted to the Teacher Retirement System for purposes of teacher retirement payments, and the State has been paying contributions into the Retirement System for at least the past five years on behalf of ODM employees. The State now argues that it is not and has never been obligated by order or agreement to pay retirement or health benefits for ODM employees or to permit ODM employees to participate in the teacher retirement system. The State claims that employees of ODM have been participating in the Teacher Retirement System and the State has been paying retirement 3Jld health insurance benefits for them without authorization under State law or an order of this Court. The ADE asks the Court to permit it to end and reverse any unauthorized participation by ODM employees in the Teacher Retirement System and provide guidance as to the disposition of any funds that may have been erroneously paid into the Teacher Retirement System by the State on behalf of "ineligible" ODM employees. 4 III. \ The Court finds that the employees of the ODM are entitled to receive teacher retirement and health benefits as other employees of the three Pulaski County school districts. When Judge Henry Woods recused in this case on July 6, 1990, he stated that if members of the OMS wished to return to their jobs with the school districts from which they came, the school districts must reinstate them. Judge Woods further barred the districts -from retaliating against these employees. See Little Rock School District v. Pulaski County Special School District, 740 F. Supp. 632, 633 (E.D.Ark. 1990). This Court reiterated that in an Order dated January 17, 1991. See doc. 1418. Thus, the Court did not intend that the employees of the OMS/ ODM suffer as a result of moving from positions within the school districts to the OMS and its successor, the ODM. In addition, in spite of the State's claim that it did not know that ODM employees were receiving retirement and health benefits funded by the State, there is no indication that the arrangement with the LRSD was hidden from the State. The Court sent counsel for the State a copy of the proposed 1990-91 budget of the OMS and asked for any objections. See doc. 1391. The ADE did not object to tne budgeted amount for berefits. See doc. 1397. When in December 1990 the Eighth Circuit directed the Court to vacate the order creating the OMS and replace it with the ODM, the appeals court stated the office should be staffed by a monitor and such additional personnel as the Court deemed appropriate. See Little Rock School District v. Pulaski County Special School District, 921 F.2d 1371 (8th Cir. 1990). In addition, the Court noted in September 1991 that the Arkansas Legislative Joint Auditing Committee would conduct annual audits of the ODM, and copies of the audit would be available to the parties. 5 See doc. 1510. Previously, the attorneys for the State were present, at this Court's request, for an August 7, 1991 hearing, at which the' Court discussed the ODM's budget and made reference to the audit by the Arkansas Legislative Audit Committee. See doc. 1507 at 10, 19. The Court finds that while the State may not have been aware that the employees of the ODM were being counted as employees of the LRSD for purposes of retirement and health benefits, this arrangement was not improper as a method of securing those benefits for ODM employees. See doc. 1480 (LRSD to provide payroll services to the ODM for all ODM staff designated by the Desegregation Monitor). Nor was the information unavailable to the State as the Legislative Audit was conducting annual audits of the ODM. The Court therefore finds that the objections of the ADE are without merit and will not require any repayment of funds previously applied. The Court, however, rejects the PCSSD's request that the State be required to provide teacher retirement and health benefits to the ODM employees as it does the educational cooperatives. Additionally, the Court finds no authority or suggestion in the record justifying an increase in the State's share of the ODM budget. Therefore, the Court will not order the State to increase its contribution to the ODM: budget. The Cot!.,1 expects the three districts to share the expense of the benefits package for the ODM employees in the same manner that they contribute to the ODM budget. 6 IV. With regard to the objections of the'Joshua Intervenors, the Court does not now intend to direct the ODM to employ additional monitors for the purpose of investigating complaints of discriminatory treatment in the disciplining of black students. Should the ODM determine that additional staff are necessary to carry out its obligations, the ODM may make such request to the Court. V. The Court having carefully reviewed the budget and the objections received thereto, see doc. 2870, 2885, 2886, the Court finds that the proposed 1996-97 budget for ODM should be and hereby is approved in its entirety . . -fl.._ IT IS SO ORDERED this & day of May 1997. ~l~~~ff UNITED STAT ms CJUDGE 7 MAY IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DMSION ? 1997 OFFICE OF DESEGREGATION MONITORING LITTLE ROCK SCHOOL DISTRICT v. No. LR-C-82-866 PULASKI COUNTY SPECIAL SCHOOL DISTRICT NO. 1, et al MRS. LORENE JOSHUA, et al. KATHERINE KNIGHT, et al. NOTICE OF APPEAL PLAINTIFF DEFENDANTS INTERVENORS INTERVENORS NOTICE IS HEREBY GIVEN THAT the Arkansas Department of Education appeals to the United States Court of Appeals for the Eighth Circuit from the District Court's order, filed April 22, 1997 and entered on the docket sheet on April 23, 1997, granting summary judgment in favor of the Little Rock School District, the North Little Rock School District, and Pulaski County Special School District "on the issue of state fundLTJ.g of the public school employee insurance program." Respectfully Submitted, WINSTON BRYANT Attorney General ~ TIMO ~tio19 Assistant Attorney General 323 Center Street, Suite 200 Little Rock, Arkansas 7220 l (501) 682-2007 Attorney for Arkansas Department of Education 2 CERTIFICATE OF SERVICE I, Timothy Gauger, certify that a copy of the foregoing document was served by U.S. Mail, postage prepaid, on this 6th day of May, 1997, on the following person(s) at the address(es) indicated: M. Samuel Jones III WRIGHT, LINDSEY & JENNINGS 200 West Capitol Avenue, Suite 2200 Little Rock, AR 72201-3699 Christopher Heller FRIDAY, ELDREDGE & CLARK 400 W. Capitol, Suite 2000 Little Rock, AR 72201 Stephen Jones JACK, LYON & JONES 425 West Capitol Avenue, Suite 3400 Little Rock, AR 72201 Ann Brown ODM Heritage West Bldg., Suite 510 201 E. Markham Street Little Rock, AR 72201 3 John Walker JOHN WALKER, P.A. 1723 Broadway Little Rock, AR 72206 Richard Roachell ROACHELL & STREET 410 W. Capitol, Suite 504 Little Rock, AR 72201 James M. Llewellyn, Jr. THOMPSON & LLEWELLYN 412 S. 18th Street P.O. Box 818 Fort Smith, AR 72902-0818 IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF ARKANSAS WESTERN DIVISION LITTLE ROCK SCHOOL DISTRICT v. LR-C-82-866 RECE~VED PULASKI COUNTY SPECIAL SCHOOL DISTRICT NO. 1, ET AL MRS. LORENE JOSHUA, ET AL KATHERINE KNIGHT, ET AL litr-id- W-Yen J !.'./.\)' 8 1997