This transcript was created using Optical Character Recognition (OCR) and may contain some errors.  EOWARO L WRIGHT ( 19031977) ROBERTS LINDSEY 1191 3-1991 I ISAAC A SCOTT JR JOHN G LILE WRIGHT, LINDSEY & JENNINGS ATTORNEYS AT LAW GORDON S RATHER .JR TERRY L MATr-lEWS DAVID M POWELL ROGER A GLASGOW C DOUGLAS BUFORD . ..;R PATRICK J . GOSS ALSTON .JENNINGS. JR .JOHN R TISDALE KATHLYN GRAVES M . SAMUEL .JONES Ill .JOHN WILLIAM SPIVEY Ill LEE J . MULDROW N M NORTON EDGAR .J . TYLER CHARLES C PRICE CHARLES T. COLEMAN JAMES J . GLOVER EDWIN L LOWTHER .R CHARLES L SCHLUMBEq;GER SAMMYE L . TAYLOR WALTER E . MAY ANNA HIRAI GIBS0'."11 GREGORY T. JONES H KEITH MORRISON Ms. Ann Brown ODM Heritage West Building Suite 510 200 WEST CAPITOL AVENUE SUITE 2200 LITTLE ROCK. ARKANSAS 72201-3699 (501) 371 -0808 FAX t501) 376-9442 OF COUNSEL ALSTON JENNINGS RONALD A MAY M TODD WOOD September 11, 1997 201 East Markham Street Little Rock, Arkansas RE: LRSD v. PCSSD (State Funding) Dear Ms. Brown: 72201 SETTINA E BROWNSTEIN WALTER MCSP4.0DEN ~OGER O ROWE "IIANCY BELLHCUSE ""'~y JOHN O DAVIS .UOY SIMMONS HE"IIRY ... IMBERLY WOOC n,;c~EQ ~AY F CO'< JR "'IARRY S HURST .R TROY A PRICE PA.TRICIA A SIEVERS .. AMES M MOOCY ..;R "'(ATHRYN A PRYOR .J_ '-1ARK DAVIS CLAIRE SHOWS HANCCC -.... "EVIN W KENNEDY .:EARY J SALL,NGS C-RED M PERKINS Ill W ILLIAM STUART JAC~SC'."11 \.tlCHAEL O BARNES STEPHEN R :..ANCAS7ER .. UOY \1 ROBINSON 9E:'SY MEACHAM .\ INSLEY H :..ANG i<YLE R W ILSOS ::ON S McKINNEY \.tlCHELE SIMMONS AL-G::.::: -<R IS TI M \.tOOOY .J CH ARLES OOU GHEE=l:Tv \.t SEAN HATC!-i We enclose a copy of the brief and appendix we sent to the 8th Circuit on Monday, September 8, 1997. ALJ:MM Enclosures Very truly yours, WRIGHT, LINDSEY & JENNINGS (-'- C I --- Angell Jones Legal Assistant   -   IN THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT NO. 97-1794EALR NO. 97-1855EALR NO. 97-2394EALR NO. 97-2406EALR (Consolidated) ARKANSAS DEPARTMENT OF EDUCATION vs . LITTLE ROCK SCHOOL DISTRICT, et al. ALMA SCHOOL DISTRICT, et al. vs. LITTLE ROCK SCHOOL DISTRICT, et al. SEP 1 2 1997 OFFICE OF DESEGREGATION MONITORING APPELLANT APPELLEES APPELLANTS APPELLEES Appeals from the United States District Court for the Eastern District of Arkansas, Western Division Honorable Susan Webber Wright BRIEF OF APPELLEE PULASKI COUNTY SPECIAL SCHOOL DISTRICT M. Samuel Jones, III (76060) WRIGHT, LINDSEY & JENNINGS 200 West Capitol Avenue Suite 2200 Little Rock, Arkansas 72201-3699 (501) 371-0808 I I I I I I I I I I I I I I I I I I I IN THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT NO. 97-1794EALR NO. 97-185SEALR NO. 97-2394EALR NO. 97-2406EALR (Consolidated) ARKANSAS DEPARTMENT OF EDUCATION vs. LITTLE ROCK SCHOOL DISTRICT, et al. ALMA SCHOOL DISTRICT, et al. vs. LITTLE ROCK SCHOOL DISTRICT, et al. Appeals from the United States District Court APPELLANT APPELLEES APPELLANTS APPELLEES for the Eastern District of Arkansas, Western Division Honorable Susan Webber Wright BRIEF OF APPELLEE PULASKI COUNTY SPECIAL SCHOOL DISTRICT M. Samuel Jones, III (76060) WRIGHT, LINDSEY & JENNINGS 200 West Capitol Avenue Suite 2200 Little Rock, Arkansas 72201-3699 (501) 371-0808 I I I I I I I I I I I I I I I I I I I SUMMARY AND REQUEST FOR ORAL ARGUMENT The State and Intervenors maintain that summary judgment was inappropriate both as a matter of law and because there were contested factual matters among the parties. For there to be a legally disputed fact, the disputed fact must be both material and the dispute genuine. The State disputed the fact that sums previously appropriated by the legislature as line items for teacher retirement and health insurance are now part of the overall appropriation for equalization funding. Because the proof left no room for reasonable minds to differ, the so called dispute cannot be characterized as "genuine". The State also contended there was a disputed issue of fact concerning the mechanism for distribution of equalization funding claiming that it interpreted the distribution in one fashion and the districts another. Because the District Court accepted the State's explanation, this dispute, if it was ever legally cognizable, played no role in the District Courts' decision. Further, in the final analysis the District Court's interpretation of these two matters amounts to an interpretation of new state law and is therefore a legal conclusion properly reached by the District Court. As this is a matter of significant financial impact upon the PCSSD, and implicates the continued proper functioning and enforcement of the Settlement Agreement, it respectfully requests fifteen minutes for oral argument. i I I I I I I I I I I I I I I I I I I I SUMMARY OF ARGUMENT Summary judgment was appropriate because the "facts" alleged by the State and the Intervenors could not be genuinely disputed. In addition, the analysis conducted by the district court, and the essential conclusion she made, amount to conclusions of law since she was required to interpret new state legislation. The PCSSD was entitled to judgment as a matter of law because the change from the old to the new funding system cost it over $5.5 million this past school year. The State's decision to change its manner of funding for health insurance premiums and teacher retirement matching was not a fair and rational change in the funding system because, as was the case in the workers' compensation appeal, the State changed from a cost-based system of distribution to one in which a district's student population drives the distribution. Just as in the case of workers' compensation, a change to a system in which student populations largely dictate the distribution of State funding ignores costs, is not fair and rational and is not in accord with the Settlement Agreement. ii I I I I I I I I I I I I I I I I I I I TABLE OF CONTENTS SUMMARY AND REQUEST FOR ORAL ARGUMENT SUMMARY OF ARGUMENT TABLE OF AUTHORITIES COUNTERSTATEMENT OF THE CASE ARGUMENT I. II. III. IV. CONCLUSION STANDARD OF REVIEW THE DISTRICT COURT DID NOT ERR IN GRANTING SUMMARY JUDGMENT IN FAVOR OF THE DISTRICTS BECAUSE THERE WERE NO GENUINELY DISPUTED ISSUES OF FACT MATERIAL TO THE DISTRICTS' CLAIMS AND BECAUSE THE ISSUES WERE, IN THE FINAL ANALYSIS, QUESTIONS OF LAW. THE DISTRICT COURT'S GRANT OF SUMMARY JUDGMENT SHOULD BE AFFIRMED BECAUSE THE DISTRICTS DEMONSTRATED THAT THEY WERE ENTITLED TO JUDGMENT AS A MATTER OF LAW .............. . THE APPELLANT'S CONTENTION THAT THE PCSSD IS A WINNER UNDER THE NEW SCHEME IS PLAINLY WRONG CERTIFICATE OF SERVICE iii Page i ii iv 1 5 5 5 12 20 29 30 I I I I I I I I I I I I I I I I I I I TABLE OF AUTHORITIES CASES: LRSD v. PCSSD, 83 F.3d 1013 (8th Cir. 1996) LRSD v. PCSSD, 778 F.2d 404 (1985) STATUTES AND RULES: 14 12 Federal Rule of Evidence 801(d)2 ............... 6 OTHER AUTHORITY: U.S. CONST. Art. VI., cl. 2 . . . . . . . . . . . . . . . . . 12 iv I I I I I I I I I I I I I I I I I I I COUNTERSTATEMENT OP THB CASE Pulaski County Special School District (PCSSD) does not quarrel with the State's and Intervenors' history of the case and their description of the outcomes. A couple of minor clarifications are in order, and will be set forth below. There is, however, a major matter set forth in both Statements which is wrong and this will be addressed first. In the concluding paragraphs of the State's brief, as well as elsewhere throughout, the State contends that: .... [t]he fact that these three Districts in the aggregate and individually are "winners" under the new formula should preclude any finding or even any inference that the new funding scheme was enacted with intent to discriminate against them. 1 State Br. at p. 24, [Emphasis supplied.] Contrary to the State's assertion that the PCSSD was a "winner", and as it will demonstrate in Section IV, the PCSSD lost over $5,500,000 this past school year because of the new funding system. The State also argues: ADE submits that in this context it was particularly inappropriate to isolate and rule on the changes in teacher retirement and health insurance funding without giving any legal weight or effect to the undisputed beneficial effect the new funding system had on the Districts. Nothing in the Settlement Agreement authorizes or even suggests that such a piecemeal dissection and comparison of certain discrete aspects of the old and new funding systems is appropriate, and nothing in the Settlement Agreement requires or permits the Districts to be insulated from having to make the 1It should be noted that the Settlement Agreement speaks in terms of "impact" and requires no showing of "intent". State App. at p.98. 1 I I I I I I I I I I I I I I sometimes difficult choices and deal with changes in the law that all other school districts in the State must grapple with. Nothing in the Settlement Agreement or in any notion or [sic] equity or common sense permits the Districts to be relieved of aspects of a new funding system that they do not like without taking into account those aspects of the new funding system that operate to their benefit. The Intervenors contend that: The Districts received more State aid under the new formula than under the old formula. Int. Br. at p. 10. The PCSSD has now examined the effects of the new funding system as a whole upon the PCSSD and will demonstrate, relying upon data obtained from the State, that the new funding system as a whole cost the PCSSD at least $5,500,000 this past school year. At this rate of loss, the State will recoup within approximately five years all of the desegregation case settlement money it ever paid the PCSSD. Other Matters The three Pulaski Districts did not move to intervene as plaintiffs in the Lake View case. They simply intervened as parties to protect and represent, in state court, the rights, protections and safeguards they possessed pursuant to the Settlement Agreement over which the District Court has I jurisdiction. PC App. at p. 58. I I I I Also, the State paid the districts $130,000,000 to settle the state's legal liability to these three Districts and secured 2 I I I I I I I I I I I I I I I I I I I a Release and Dismissal. They did not pay these sums simply to help the Districts pay for some of their desegregation costs. The sums specified by the State that would result in increased M-to-M payments to the Districts are not supported by any citation to the record. However, even if these amounts are accurate, the increases are accounted for by annual increases in overall State appropriations and by the fact that instead of being paid directly by the State, teacher retirement and health insurance are now paid through the new formula and, as the district court explained in her orders, this method of payment short-changes the three Pulaski Districts as compared to most other districts in the state. State Ad. p. 5. Thus, while this manner of payment does operate to increase M-to-M payments, it comes at the expense of reduced State aid overall to the PCSSD. The Intervenors contend that the declaration of Winston Simpson, Superintendent of the Bryant School District, is uncontradicted on the issue of employee costs. In fact, an examination of this declaration reveals that Mr. Simpson examined only certified salary costs (such as teacher salaries) and not the overall employee costs for the PCSSD which includes non certified staff. However, the record developed in this case from previous hearings is uncontradicted that employee costs in the PCSSD consume more than 80% of its annual budget, PC App. at p. 87 1 4, and that its average teacher salary ranks as the 5th or 6th highest in the State. PC App. at p.2-3. What Mr. Simpson's analysis really shows is that the PCSSD spends 3 I I I I I I I I I I I I I I I I I I I substantial money on items other than certified salaries, such as desegregation. The Intervenors contend that the Districts are seeking to take funds from the public school fund that would otherwise go, they claim, to the students of other school districts in Arkansas. Int. Br. at p. 17. The three Districts neither contend for nor do they expect such a result. Rather, they presume, and indeed recommend, continuation of that which has pertained in the past. In the past, the State has transferred the amounts necessary to make desegregation payments from the state general revenue fund and placed those sums in the public school fund for distribution to these three Districts. Thus, monies appropriated for education are not simply taken from the public school fund. State App. at p. 360 1 B. 4 I I I I I I I I I I I I I I I I I I I ARGUMENT I. STANDARD OP' REVIEW. The PCSSD addresses the Appellant's points here only as necessary, in Point II below. II. THE DISTRICT COURT DID NOT ERR IN GRANTING SUMMARY JUDGMENT IN P'AVOR OF THE DISTRICTS BECAUSE THERE WERE NO GENUINELY DISPUTED ISSUES OF FACT MATERIAL TO THE DISTRICTS' CLAIMS AND BECAUSE THE ISSUES WERE, IN THE FINAL ANALYSIS, QUESTIONS OF LAW. The Intervenors correctly point out that the standard in the Eighth Circuit is that a genuine issue of material fact must exist and if there is a disputed fact, the disputed fact must be material and the dispute genuine. Int. Br. at p. 7. [emphasis supplied] It is the latter point upon which the District focuses, i.e, the purported dispute is not, at bottom, genuine. The State contends there were two "core factual matters" disputed by the State, and that because they were disputed summary judgment should have been denied. State Br. at p. 17. The first "dispute" was whether or not the money the state previously paid outside the formula as teacher retirement and health insurance matching is now being distributed within the new formula. Because it was so obvious that this is the case, it was unreasonable for the State to dispute this fact. First, simple mathematics prove the point. As the district court observed, the public school fund was forecast to rise by more than $200,000,000 in fiscal year 1997 above the levels which existed at the time of the Lake View decision. State Ad. at p. 7. When the 1995-96 appropriations for teacher retirement 5 I I I I I I I I I I I I I I I I I I I ($130,000,000) and health insurance ($42,815,000) are combined, the sum equals $172,815,000. Subtracting this sum from the $200,000,000 increase still leaves $27,185,000. Combining this with the forecasted increase leaves $227,185,000 over and above the last appropriation that included teacher retirement and health insurance as line item appropriations. Thus, clearly the money represented by the prior line item appropriations is still being appropriated, just in a different fashion. If simple mathematics do not suffice, then the admission of Dr. Bobbie Davis, Assistant Director for Finance and Administration at the Arkansas Department of Education (ADE) should. She testified that dollars that were previously part of identified funds were consolidated into the new equalization funding scheme. State Ad. at p. 8. This admission by the top financial official at the State Department of Education is binding upon the State pursuant to Fed. Rules of Evidence 80l(d)2. Further, as noted by the District Court, the State's own budget documents demonstrate the same treatment. ("Transportation Aid ... eliminated as a separate line item and incorporated into the new school funding formula"; "[e]liminated at-risk funding as a separate line item and combined approximately $30,000,000 into State equalization formula"; [e]liminated all at-risk funding ... and shifted approximately $30,000,000 into State equalization aid"). State Ad. at p. 8. 6 I I I I I I I I I I I I I I I I I I I In addition, the District Court correctly credited the uncontradicted testimony of Dr. Benny Gooden for the same proposition. Dr. Gooden heads the Fort Smith School District, a lead intervenor in this appeal. State Ad. at p. 8. The district court also properly relied upon the testimony of Dr. Charles Dyer, Superintendent of the Alma School District, the lead school district in the original State funding formula litigation, Alma v. Dupree. Finally, the State's funding expert in the Lake View case, Dr. Robert Rossmiller, likewise stated his belief that the money previously appropriated for teacher retirement and health insurance was put into the pool of money that would flow through the new equalization formula. State Ad. at p. 9. In the face of this, it is readily apparent that the money that previously was paid outside the formula by the State for teacher retirement matching and health insurance simply became part of the new overall appropriation to be distributed on an equalized per student basis under the new formula. For the State to claim otherwise in the face of such evidence is to simply elevate form over substance. In the final analysis, the issue of whether these sums continued to be appropriated or not is really not a "factual" matter at all. One of the tasks of the District Court was to interpret Act 917 and the accompanying appropriation legislation, Act 1194. She did so and her interpretation, that the appropriation continues, is a legal conclusion. 7 I I I I I I I I I I I I I I I I I I I This is consistent with the position the State took during the Workers Compensation hearing. In the midst of continuing questioning of Dr. Shaver concerning his opinion as to whether or not Worker's Compensation was a program under the Settlement Agreement, the State finally objected as follows: MR. HUMPHRIES: Your Honor, I'm going to object to this continued line of questioning. The -- the argument is a legal one that the Settlement Agreement says that the State share that the State shall continue to pay its share of any programs which -- for -- for which the districts now receive state funding. And that's a legal argument. THE COURT: Well, I will certainly sustain that objection ... PC App. p. 16. Clearly, the phrasing of the objection was not limited to Worker's Compensation but to "any programs". Distribution Per ADM The other core "fact" identified by the State concerns the manner of distribution of funds under the new act. The State contends now that the Districts contended below that the new formula distributes funds on a pure per student basis. State Br. at p. 17. The State argues that because funds are distributed pursuant to an equalizing formula, the amount of equalization funding each district will receive depends in part, among other things, upon the district's local wealth. 8 I I I I I I I I I I I I I I I I I I I While the State may misapprehend the argument of the Districts below, suffice it to say that the district court did not. Indeed, in her February 18, 1997 order, the district court quoted from Arkansas budget documents for the proposition that: Act 917 now requires State Equalization Funding to be distributed to districts based on the number of students, Average Daily Membership (ADM), equalized by the wealth of the district. The purpose of this funding is to equalize the disparities of property wealth throughout Arkansas. State Ad. at p. 8. [emphasis supplied] that: Later in the same order, the district court plainly stated The Court thus finds that there is no genuine factual dispute that instead of directly funding each district based upon the number of employees, the State has included funds for teacher retirement in the new funding scheme which distributes funds on a per ADM basis equalized by the wealth of the district. State Ad. at p. 9. [emphasis supplied] The Districts do not contend that the distribution is a pure per student distribution as contended by the State. Rather, it is the contention of the Districts that distributing such funds through a formula which is driven by ADM (Average Daily Membership) discriminates against them because it ignores actual costs for teacher retirement and health insurance. Further, the State is correct when it states at page 18 of its brief that: Because it is distributed pursuant to an equalizing formula, the amount of equalization funding each district will receive depends, among other things, upon the district's local wealth. State Br. at p. 18. 9 I I I I I I I I I I I I I Indeed, this aspect of the new funding formula exacerbates the problem even more for these Districts since they vote high millage which further reduces their State aid under the new scheme. PC App. p. 52. What really matters, however, is that the District Court understood the state's point. However the State may now mischaracterize the position of the Districts below, the fact remains that the District Court understood and articulated the distribution distinctions now being made by the State. Stated another way, that which the State contends was a matter of fact in dispute between it and the Districts below was not a factor in the District Courts' decision. The record made in the Worker Compensation's hearing is instructive here. The state's witness in that proceeding, Dr. Robert Shaver2 , testified that prior to the change in the law requiring school districts to fund their own Worker's Compensation program, the state simply received a bill from the Worker's Compensation Commission and paid it on behalf of the school districts by withdrawing money from the public school fund. PC App. p. 11. He further testified that in 1993-94, the last year the state paid these costs directly, the claims I experience was $5,200,000. PC App. p. 12. The previous year the experience was $8,200,000. PC App. p. 13. While the record for I that proceeding contains only "rounded off" numbers, the average I I I I of those two years is still $6,700,000. Thus, it would 2Dr. Shaver was the top financial official at the Arkansas Department of Education. PC App. p. 17 and 18. 10 I I I I I I I I I I I I I I I I I I I reasonably appear that the State's appropriation of 6.6 million dollars that has been characterized by the State as "seed money" in its brief (State Br. p. 19) was in actuality an average of the two years immediately preceding the change in the law. Thus it would appear the appropriation that the State made several years ago, and continues to make, for Worker's compensation assistance is virtually identical to how it has handled Teacher Retirement and Health Insurance. It is still distributing the same respective sums of money but because the distribution is now driven primarily by ADM's rather than cost, the three districts in Pulaski County are shortchanged. The State's persistence in seeking to shift from a cost basis, which was fair and rational as respects these three districts, to an essentially ADM driven basis, makes the legal analysis for the present appeal not logically different from the analysis that pertained in the Worker's Compensation appeal. This new manner of distribution results in these three districts receiving proportionally less money for these state mandated costs than most other districts in the state of Arkansas. Once again, the District Court's ruling on this matter necessarily represented her interpretation of the distribution mechanism outlined in Act 917 resulting in her legal conclusion concerning the operation of State law. Thus, in the final analysis, the State cannot in reality present a case of disputed facts since the District Court was essentially making reasoned interpretations of State statutes. 11 I I I I I I I III. THE DISTRICT COURT'S GRANT OP SUMMARY JUDGMENT SHOULD BE AP'PIRMED BECAUSE THE DISTRICTS DEMONSTRATED THAT THEY WERE ENTITLED TO JUDGMENT AS A MATTER OF LAW. At page 10 of their brief, the Intervenors assert that: By petitioning the District Court for orders directing the state to divert millions of dollars from students outside of Pulaski County for the use of the Pulaski County Districts, they would have the Court ignore the clear Arkansas Constitutional mandate of "equal treatment" to which all students are entitled. (Citing Dupree v. Alma, 651 S.W.2d 90, 279 Ark. 340 (1983). Continuing, they contend that: However, equal treatment to all students must be the concern of the Court, because it is right, it is fair and rational and it is the rule of general applicability in Arkansas. (Citing Dupree and Lake View.) Int. Br. at p. 10. I I This argument was advanced in this case by the State in the I Court of Appeals years ago. The en bane court in 1985 disposed I I I I I I I I I of that argument in the following language: [Fn.l] The State argues that we cannot require it to spend more money in one school district than another, because to do so would conflict with a recent opinion of the Supreme Court of Arkansas requiring, under the State Constitution, substantially equal per-pupil funding throughout the State, DuPree v. Alma School Dist. No. 30, 279 Ark. 340, 651 S.W.2d 90 (1983), and with a statute implementing this opinion, Ark. Stat. Ann.  80-850.10 - 80-850.22. This argument is insubstantial. Under the Supremacy Clause, U.S. CONST. Art. VI., cl. 2, the Fourteenth Amendment overrides any inconsistent state statute or constitutional provision. (Arnold, J. concurring.) 778 F.2d at 437. What also appears to be lost upon the intervenors is the fact that the PCSSD is not on a par with the intervening school districts. The Intervenors have not been required to 12 I I I I I I I I I I 1- 1 I I I I I I I desegregate. The PCSSD desegregation budget alone is $12,500,000, representing 11.07% of its total budget. PC App. p. 88. It no longer receives the stream of payments from the State that the Settlement Agreement provided. That has ended. What the State should not be permitted to end is it's commitment to continue to make the payments for programs as promised in the Settlement Agreement. While the State pretends that its funding for Teacher Retirement and Health Insurance has ended, the programs most surely have not. All that has changed is that the PCSSD must now pay the bills and that the State no longer provides a method of distribution for those monies that comports with the Settlement Agreement. The distribution of what used to be funds paid directly for teacher retirement and health insurance is, in operation, identical to the seed money analysis previously made by this Court and the district court as regards workers' compensation. In the latter instance, the distribution was simply made to the school districts based on enrollment. Here, the distribution, while made through the new formula, is still done in a way in which students (ADM) drive the distribution rather than cost. While it is true that certain features of the formula operate to raise or lower the amounts districts now receive for teacher retirement or health insurance, the fact remains that the distribution is student driven. The legal infirmities and violations of the settlement argument are further addressed beginning at page 21. 13 I I I I I I I I I I I I I I I I I I I The Intervenors' Employee Cost Argument The intervenors, in particular, persist in challenging what has become the law of the case. They continue to attack the previous findings of the District Court, as accepted by this Court (Little Rock School District v. Pulaski County Special School District, 83 F.3d 1013 at 1018 (8th Cir. 1996)) that the three Pulaski Districts are employee heavy and have high employee cost. While the Intervenors rely only upon an affidavit that the PCSSD has had no opportunity to contest or explore, (as we discuss further beginning at page 15) the fact remains that the District Court had direct testimony from the State's witness in the Worker's Compensation hearing to this effect. In an exchange that is part of the record on appeal from the Worker's Compensation appeal, the District Court heard the following from Dr. Shaver: Q. And you would agree that of the districts in the state, Pulaski and Little Rock are singled out, if you will, by operation of this statute and this premium structure to pay the two highest premiums? A. I -- by by virtue of its number of employees and salaries that would seem to be the case. THE COURT: Yes. By virtue of the number of employees and the salary, but you're giving them money based on the number of students. THE WITNESS: That's true. THE COURT: Yes, that's their problem. 14 I I I I I I I I I I I I I I I I I I I PC App. p. 14. At the same hearing, the State acknowledged that the record in this case is a continuing one. PC App. p. 15. Dr. Simpson need not have gone to the trouble of going to the Arkansas Department of Education for his information since it was already a part of this case by October 1, 1993. At a hearing held on the PCSSD budget that date, counsel for the teacher's union tried the same tact attempted by Dr. Simpson in his affidavit. After first positing to Dr. Stewart3 the percentage of the total budget committed to teacher compensation, which percentages ranged from 54% to 56%, the following exchange occurred in open court between counsel and Dr. Stewart of the PCSSD: Q. Now, those figures pretty dramatically illustrate that the teachers in this district are not getting these big pay increases as far as a percentage of the total budget of Pulaski County, are they? A. I don't think that's what those figures represent at all, Mr. Roachell. Q. What do you -- what do you think they represent? A. Well, they represent exactly what you said they represent. Those numbers that you just read represent the total amount of the district budget, the total percentage amount of the district budget that has been spent on teacher salaries, and to turn that into what 3Dr. Stewart is the chief financial officer of the PCSSD. 15 I I I I I I I I I I I I I I I I I I I you said it meant is totally ridiculous because that's not what it meant at all. PC App. at pp. 4 and 5. In the same hearing, it was established that the PCSSD then ranked #6 in the State out of 311 districts in average teacher's salaries as determined by the Arkansas Department of Education. PC App. at p. 2. Accordingly, all that can be divined from Dr. Simpson's analysis is that because the PCSSD has one of the highest average teacher salary payments in the State, it must be spending an extraordinary amount of money on other things, such as desegregation. The point was driven home by Dr. Stewart at the same hearing: Q. For instance, in looking at this -- and I'm just going to do a couple of these, your Honor -- the Rogers School District in the what some people refer to as the growing -- located in the growing affluence of northwest Arkansas ranks behind the Pulaski District at position No. 8? A. You got the list. Q. All right. To the best of your knowledge, is there any desegregation going on in Rogers, Arkansas? A. No. In fact, having worked in that county for seven years, definitely no. 16 I I I I I I I I I I I I I I I I I I I Q. We rank just -- we rank just behind Springdale, although perhaps with these recent adjustment, we're ahead of them. To the best of your knowledge, is there any desegregation going on in Springdale? A. No. Q. Perhaps to state the obvious, would that translate into meaning they're not spending any money on desegregation? A. Yes. PC App. p. 3. It is clear that the District Court understood the significance of all this. When the District Court was questioning the Union's witness at the October, 1993 hearing, the following exchange occurred: THE COURT: The cost of living and the comparable wage patterns. Do you ascribe any weight at all to the fact that PACT is a signatory to this very expensive Settlement Agreement? THE WITNESS: I don't disagree with that. Help me out. I'm -- I'm not sure -- THE COURT: Should that be -- I mean, should I consider that or should the district consider that? When you say you consider three things in determining the pay raise, one is ability to pay, two are comparable wage patterns, and three is cost of living. THE WITNESS: Uh-huh. 17 I I I I I I I I I I I I I I I I I I I THE COURT: And I imagine that these comparable wage patterns in many districts are -- the districts aren't facing what this district is facing. THE WITNESS: I -- I -- THE COURT: They don't have to come to Susan Webber Wright's court -- THE WITNESS: Yeah. You -- THE COURT: -- and be dressed down -' THE WITNESS: Yeah. THE COURT: and they don't have to go along with this burdensome Desegregation Plan. THE WITNESS: I understand. THE COURT: And PACT was part of this. THE WITNESS: I understand that. THE COURT: Well, should I consider that? I think I should -- THE WITNESS: Well -- THE COURT: -- quite frankly. PC App. pp. 6 and 7. The Intervenors' Lake View Argument The Intervenors spend much of their brief analyzing the State court decision in Lake View apparently under the assumption that the Districts contended in federal court in the present proc