Desegregation-suit bargainers close money gap

The state and the Pulaski County school districts were at least $131 million apart at the end of last week’s efforts to negotiate an end to a 30-year-old federal school desegregation lawsuit.

The figure signifies that there has been some progress and compromise among the parties.

But the difference was large enough that Chris Heller, an attorney for the Little Rock School District, sent emails to Little Rock School Board members Friday evening saying that the chance of a settlement “seems remote.”

By Saturday afternoon, Allen Roberts of Camden, an attorney for the Pulaski County Special School District, had a far brighter outlook.

“I think it is very close to being settled,” Roberts said Saturday after talking into the night Friday with lawyers for the state and for the Joshua intervenors who represent black students in the three school districts.

“We may know as soon as the close of business Monday,” Roberts said about prospects for an agreement. “It looks good. I think people are pretty optimistic right now, but then it ain’t over ’til it’s over.”

Attorneys for the three Pulaski County school districts, the Joshua intervenors and the Arkansas attorney general’s office are attempting to reach an out-of-court settlement on the state’s financial obligations in advance of a Dec. 9 court hearing on the state’s motion to be released from a 1989 agreement in the case, which began in 1982. That agreement requires the state to pay annual desegregation aid to the three districts, an amount of money that now totals almost $70 million a year.

The Little Rock district receives about $42 million a year of the $70 million, the Pulaski County Special School District is paid about $20 million and about $8 million goes to the North Little Rock School District. The districts generally use the money for magnet schools, the majority-to-minority interdistrict student-transfer program, and compensatory education programs as well as for some teacher health-insurance and retirement costs.

Attorneys for the state have argued to U.S. District Judge D. Price Marshall Jr. that circumstances have changed in the school districts, warranting the state’s release from the funding requirement. The changed circumstances include the fact that two of the three districts have been declared unitary - or desegregated - and released from federal court supervision of their desegregation efforts. The third district, Pulaski County Special, is close to be being declared unitary, particularly in regard to its plan for assigning students to schools, state negotiators contend.

The school districts and intervenors are opposing in court the state’s release from the 1989 agreement, contending the state failed to fully comply with it or comply in good faith.

In the negotiations for an out-of-court settlement, the state is seeking an end-date to the special desegregation payments that do not go to other school districts in the state. The Pulaski County districts are seeking a gradual phaseout of the state funds as a way to preserve the financial stability of the school districts, all of which are among the largest in the state.

Attorney General Dustin McDaniel on Friday declined to discuss the specifics of the negotiating sessions with the districts and intervenors. His office represents the Arkansas Department of Education.

“Our office remains in contact with the governor, legislators and all parties in the case,” McDaniel said through Cindy Murphy, communications director for his office.

Heller, the Little Rock district’s attorney, told the Little Rock School Board that Superintendent Dexter Suggs and Chief Financial Officer Kelsey Bailey participated in the discussions of proposals Friday with the representatives of other parties.

“We had a good discussion and made some progress but did not reach an agreement,” Heller wrote. “The lines of communication are still open and the possibility of a settlement still exists but now seems remote.

“There is still some time before the Board meeting on Thursday and the Legislative Council meeting on Friday,” he said, “and the parties have all expressed a desire to work toward settlement if possible. So we will remain open to further discussions and I will keep you advised of any developments. In the meantime the litigation moves forward.”

Any proposed settlement would be subject to the review of the Arkansas Legislative Council as well as the three districts’ school boards before it is submitted to the federal judge for approval.

Representatives of the three districts and the intervenors at midweek had submitted to the attorney general’s office a proposal that called for state desegregation aid to continue through July 1, 2019. More specifically, it called for the state to pay in each of the next six years an amount equal to what the state paid to the districts in the 2008-09 school year. That would be about $65.8 million a year to be paid July 1, 2014, and each July 1 through 2019. That would total nearly $394.8 million.

The attorney general’s office countered with a plan that would cost the state about $242.9 million, including the $68 million already scheduled to be paid to the three districts in the current 2013-14 school year. There would be an additional $65.8 million paid July 1, 2014, another $65.8 million paid July 1,2015, and a final $43.3 million paid July 1, 2016.

Of the $65.8 million in payments proposed by the state in 2014 and 2015, $37.3 million would go to Little Rock, $7.6 million to North Little Rock and $20.8 million to Pulaski County Special. In 2016, the payment to Little Rock would be reduced to $18.7 million and cut to $3.8 million for the North Little Rock district. Pulaski County Special would receive the same $20.8 million it would receive in the first two years of the proposal.

Roberts, attorney for the Pulaski County Special district, said Saturday afternoon that “the money is the moving target” in the negotiations.

He said attorneys meeting Friday afternoon narrowed the financial difference somewhat. State officials verbally agreed to raising the third year - 2016 - payment to $65.8 million - a total of $197.4 million. The districts verbally agreed, he said, to reduce the six years of funding to five years - $328.9 million.

“That was all table talk, no writings,” he said.

That leaves a difference between the parties of $131 million.

There are other terms in the settlement proposals besides the annual payments. The settlement proposals call for all parties in the case to agree that the Pulaski County Special School District is entitled to unitary status.

Roberts said that issue - which would be a side agreement to any settlement proposal - has not been finalized but is being discussed by attorneys for the state, the Pulaski County Special School District and the Joshua intervenors.

In the negotiations, the Little Rock district and the Joshua intervenors have agreed to give up their long legal challenge to the establishment of publicly funded, independently operated charter schools in Pulaski County. That charter school challenge is pending before the 8th U.S. Circuit Court of Appeals at St. Louis. Oral arguments are expected to be made in early 2014.

The districts also have proposed to no longer hold the state responsible for funding interdistrict student transfers for the six original magnet schools - Booker, Carver, Gibbs and Williams elementaries, Horace Mann Middle and Parkview High. The schools offer programs in the arts, sciences and international studies to students in all three Pulaski County districts as a way to desegregate otherwise difficult-to-desegregate locations.

Students now in those schools would be able to continue to attend through the completion of all grades, but no new applications would be accepted under the current system of filling those schools.

Little Rock School District leaders have said they intend to continue to operate the magnet schools, and that interdistrict student transfers to those and other schools could be accomplished using state school-choice laws rather than desegregation plans.

The state’s proposal would:

Give the state-owned buses now used for interdistrict-transfer and magnet-school students to the three school districts.

Award each of the three districts $250,000 for their legal fees and pay attorneys for the Joshua intervenors $500,000, and the Knight intervenors, who represent teachers in the case, $75,000.

Authorize the state to proceed with steps that could result in the establishment of a new Jacksonville/North Pulaski County district that would be independent of the Pulaski County Special district of which the area is now a part.