Full opinion text
MEMORANDUM OPINION DOWD, District Judge. I. INTRODUCTION Before the Court in the above-captioned case is the issue of what amount of additional funding defendant the Board of Education of the State of Ohio (“State”) should be required to contribute to the desegregation program in the Lorain City Schools. On January 29, 1990, defendant the Lorain Board of Education (“Lorain”) filed a motion for an order requiring defendant the State to increase its share of the costs of implementing and completing the Desegregation Plan stemming out of the Consent Decree entered in this case, (Docket No. 279). The State filed a memorandum in opposition to Lorain’s motion in which the State argued that the Consent Decree is a contract which was negotiated at arms length and as such is not modifiable except in certain specified exceptional circumstances. The State argued that Lorain cannot demonstrate that modification of the Consent Decree is warranted in the present case. In an Order dated May 24, 1990, (Docket No. 307), the Court denied Lorain’s motion to modify the Consent Decree with respect to increased State funding. Lorain subsequently filed a motion for reconsideration of the Court’s March 24, 1990 Order denying Lorain’s motion for a modification of the Consent Decree, (Docket No. 309). Lo-rain argued in its motion that if the Court does not modify the Consent Decree and increase the State’s contribution to the Desegregation Plan, then the goals of the Consent Decree will not be met. The State filed a memorandum in opposition to Lo-rain’s motion for reconsideration on June 25, 1990, (Docket No. 314), in which the State asserted the same arguments as were presented in its original opposition motion and requested that the Court deny the motion for reconsideration. Following the filing of the motion for reconsideration, the Court conducted an ev-identiary hearing on the matter on July 25, 1990. The Court then gave the parties the opportunity to file post-hearing briefs on the merits of Lorain’s motion for an order requiring the State to increase its contribution to the Desegregation Plan. After considering the evidence before it and the legal arguments presented, the Court reconsidered its prior ruling and issued an Order on August 17, 1990 in which it found that the Consent Decree should be modified by an increase in the State’s contribution to the Lorain Desegregation Plan. The Court declined to arrive at a particular dollar figure which the State would be required to contribute in its August 17, 1990 Order. Instead, the Court instructed the parties to engage in negotiations in an effort toward arriving at the amount of additional State funding. Following the issuance of the August 17, 1990 Order, the State filed a motion asking for a clarification of whether or not the Court’s August 17, 1990 Order is a final appealable order, (Docket No. 338). On September 12, 1990, the Court responded by indicating that, in the Court’s view, the August 17,1990 Order is not a final appeal-able order since the Order merely indicated an intention to modify the Consent Decree and encouraged the parties to enter into negotiations regarding an increase in funding but did not order the State to pay a particular dollar amount, (Docket No. 339). The Court indicated, however, that in the event negotiations proved fruitless, then the Court would make a definitive determination with regard to the increased State funding, and, at that point, there would be a final order for purposes of appeal. The Court was under the impression following the issuance of its August 17, 1990 Order that the parties were indeed engaging in meaningful negotiations toward arriving at a solution for the funding problem. The Court has since discovered that the negotiation process was far from successful. The State has from the inception of this controversy taken the position that it should not be required to contribute any additional funds to the Lorain desegregation program. The State has agreed on various occasions to provide “technical assistance” to Lorain. The State continues to maintain, however, that the ceiling amount which it was required to pay under the Consent Decree, i.e., $1,000,000.00, has been paid by the State and its obligation under the terms of the Consent Decree has been fully complied with. In February of 1991, the Court became convinced that the negotiation process could not solve the present controversy. Accordingly, the Court convened the parties for a status conference at which the Court discussed a myriad of issues relating to the Lorain City School District. The Court discussed, inter alia, the status of the magnet schools in place in Lorain, the operation of the bilingual program in place in Lorain, and, the extent to which Lorain has been attempting to or has met the hiring goals as set forth in the Consent Decree. The Court also indicated to the parties that it would conduct an extensive evidentiary hearing for the purpose of determining the precise amount which the State should be ordered to contribute to the desegregation program in Lorain. The Court indicated that facts regarding Lo-rain’s financial situation, the operation of the magnet schools in Lorain, the operation of the bilingual program in Lorain, the efforts at achieving the hiring goals set forth in the Consent Decree, as well as the facts surrounding the entrance into the Consent Decree by the parties in the above-captioned case would need to be addressed in the evidentiary hearing. The Court then conducted an exhaustive evidentiary hearing on various days over a period of weeks beginning on April 12, 1991. The Court sets forth below in its opinion its findings of facts based on the testimony offered in the hearing held on April 12 and 24, 1991 and May 6 and 10, 1991. II. THE CONSENT DECREE. The Consent Decree entered by the parties to this case provides that: [immediately upon the journalization of this Decree the Lorain Board of Education will begin to develop a plan by which the objectives outlined in the Goal Statement will be achieved ... Consent Decree, Docket No. 76 at 2. The Consent Decree further provides that in the event the parties are unable to arrive on an approved plan within a specified number of days, then any party can petition the Court for the Court’s intervention. Id. at 2-3. The Consent Decree sets forth the time at which the plan is to go into effect, and provides that the plan should consist of the creation of a seven member Board of Review to oversee the implementation of the plan approved by the Court. With respect to the funding of the Lorain desegregation plan, the Consent Decree provides that: The State of Ohio will pay to the Lo-rain City School District 50 percent of the expenses incurred by the Lorain City School District in designing, implementing, administering and maintaining educationally sound programs reasonably expected to reduce racial isolation to the standards defined in the Goal Statement. The State of Ohio will pay 50 percent of the unreimbursed expenses attributed to the transportation of students who are being transported for the reduction of racial isolation. “Unreimbursed expenses” shall mean the portion of this expense which remains after deducting the state transportation reimbursement applicable to students involved in such transportation. The total of the expenses referred to above shall be limited to those incurred during the seven school years 1984-85 through 1990-91, and the State of Ohio payments shall not exceed $1 million during the seven year term, or 50 percent of the actual reduction of racial isolation costs, whichever is less. Id. at 4-5. The Consent Decree provides that “[tjhis consent decree shall remain in effect until the goals which are a part of the decree have been achieved whereupon this decree shall expire.” Id. at 5. The Consent Decree also includes a section titled “Goal Statement” in which various goals sought to be achieved through implementation of a desegregation plan are set forth. The Consent Decree sets forth the following educational goals: 1. Eliminate racially identifiable schools, caused by student and/or teacher assignments, consistent with other goals of this Goal Statement. 2. Assign students to school attendance areas so that each school will establish a composite minority student ratio of no more than a deviation of + 20 or — 15 percent from the District Average percentage of each identifiable minority’s student racial composition. 3. The parties agree that the Lorain City School District shall retain an independent contractor to evaluate the bilingual programs currently in effect to determine program effectiveness. The cost of such evaluation shall be considered part of the cost of implementation of the Consent Decree and up to 50 percent of the cost shall be reimbursed by the State of Ohio as provided in Item No. 4 of the Consent Decree ... 4. Provide a mechanism by means of which students may transfer from their school of assignment to other schools, provided that the transfer does not adversely affect the racial composition of the sending or receiving school. 5. Assure that any student assignments or reassignments required to comply with the goals of this Decree will be carried out in a manner which equitably allocates the burdens on the students. Assure that any school closings which are necessary to comply with the terms of this Decree are carried out in a manner which equitably allocates the burden of such closings on the various neighborhoods of the City. 6. Student reassignments necessary to establish and maintain the percentages of non-white students in each building at the + 20 or — 15 percent level will be implemented in a manner that will ensure that whatever “burden” of movement there may be will be equitably shared by both non-white and white students. If any additional schools are closed, students from those schools shall be reassigned in a manner that ensures that each receiving school will have a composite minority student ratio of no more than a deviation of + 20 or — 15 percent from the district average percentage or [sic] minority students ... Id. at 7-9 (emphasis added). With respect to bilingual education in the Lorain City Schools, the Goal Statement provides that “the Lorain City School District shall retain an independent contractor to evaluate the bilingual programs currently in effect and to determine program effectiveness.” Id. at 7. The Consent Decree further provides that the Lorain Board shall: Eliminate program shortcomings discovered in the evaluation process and implement modifications. (a) Maintain bilingual programs for Hispanic students. (b) Comply with both federal and state bilingual statutes ... (c) Assign non-, or limited-, English proficient students only to schools which are adequately staffed and equipped to meet their diagnosed lingual needs. Id. at 8. The Goal Statement portion of the Consent Decree also sets forth the affirmative action which should be taken with respect to employment opportunities in the Lorain City School District. Specifically, the Goal Statement indicates that particular hiring goals should be put in place. The Goal Statement of the Consent Decree provides in this respect that: 1. The HIRING GOAL shall be minority/majority ratio of the adult population in Lorain in the year of achievement. 2. The same goal shall apply to both Certificated and non-Certificated personnel at each level of responsibility within the school system. 3. The HIRING RATE for certificated teaching staff during the 1984-85 school year shall be 20% Black and 20% Hispanic. Provided, however, that the parties recognize that the Lorain District shall have an opportunity to demonstrate impossibility of achieving the Hispanic goal for reasons unrelated to good faith effort. 4. The HIRING RATE for certificated staff for all subsequent years shall be determined by the District, in light of the pertinent factors (number of vacancies, areas in which staff is needed, availability of qualified applicants, etc.) 5. The hiring rate for non-certificated staff shall be determined by the District, in light of such pertinent factors as are set forth in # 4 above. 6. The Lorain District shall have five years during which to achieve the hiring goal as it relates to Blacks and seven years as it relates to Hispanics. Id. at 13-14. Following lodging with and acceptance by the Court of the Consent Decree, the parties began developing a desegregation plan to implement the goals of the Consent Decree. III. THE DESEGREGATION PLAN. A. Formulation of the Plan. The parties attempted but were unable to reach an agreement on a plan which could be utilized to achieve the objectives of the Goal Statement as set forth in the Consent Decree. A significant dispute between the parties centered on Lorain’s proposal to implement a magnet school program rather than employ a program of involuntary reassignment to bring the Lorain schools into compliance with the + 20/ — 15 ratio as to minority students as required by the Consent Decree. Plaintiffs wanted to implement a system of involuntary reassignment of students. Plaintiffs contended, inter alia, that a system of involuntary reassignment would be more efficient at achieving desegregation and would be less costly. Finding that the parties were having difficulty agreeing on a desegregation plan, the Court elected to hold a hearing on the proposed desegregation plan. The Court began the evidentiary hearing on the matter on January 22, 1985. The Court then discovered that the parties were attempting to negotiate a resolution and so continued the hearing until March 6, 1985. At the March 6, 1985 hearing, the Court received testimony and evidence on the proposed plan and heard arguments on the issues raised by the plaintiffs. The Court then issued a Memorandum Opinion and Order, (Docket No. 95), on April 1, 1985 both approving portions of the proposed plan and rejecting other portions of the proposed plan as is outlined below. The Court approved the Lorain Board of Education’s proposed desegregation plan regarding the use of a magnet program to be put into effect at two schools for the 1985/86 school year. The Court rejected, however, the definition of success of the magnet program that was provided in Lo-rain’s proposed plan and held, instead, that the magnet program would only be deemed successful for the 1985/86 school year if the plan achieved the targeted ratios as set forth in the consent decree and not some lesser percentage. The Court also approved Lorain’s proposed plan as it related to enhancement and implementation of a bilingual program. The Court noted: The bilingual program is of extreme importance to the Hispanic students of the Lorain School District. The Lorain School District is composed of approximately 22.8% Hispanic students. However, the majority of the Hispanic students are located in the south Lorain schools. The bilingual program is currently in effect in the south Lorain schools. The proposed plan provides for an extensive process by which the bilingual program currently in effect will be evaluated with the help of independent consultants. The Board of Education proposes an evaluation team submit a final report and recommendation regarding the bilingual program by May 20, 1985. The magnet program will not affect the south Lorain schools in the 1985/86 school year. The board of education asserts that postponing the desegregation process in south Lorain schools for the 1985/86 school year will allow the implementation of changes and recommendations regarding the bilingual program prior to the involuntary transfer of students. The board of education asserts that time is needed time [sic] to implement the upgraded bilingual program and the board does not want to involuntarily transfer students out of the south Lorain schools who may need the use of such a program. Memorandum Opinion and Order, Docket No. 95 at 10-11. The Court adopted the proposed plan with regard to the hiring of certificated and noncertificated personnel as well. The Consent Decree, as was indicated above, provides that the hiring goal for the Lorain City School District shall be the minority/majority ratio of the adult population in Lorain in the year of achievement. The Consent Decree further provides that the same goals shall apply to both certificated and noncertificated personnel at each level of responsibility within the school system. Likewise, the Consent Decree provides that the Lorain City School District shall have five years during which to achieve the hiring goals as to Blacks, and seven years as to Hispanics. The Court found in its Memorandum Opinion and Order of April 1, 1985 that “the Lorain School District is making a good faith effort to reach the goals of the Consent Decree, i.e., having a minority/majority ratio for the teachers and staff of the Lorain City Schools which mirrors the adult population in Lorain and attaining such a goal in five years as it relates to Black teachers and seven years as it relates to Hispanic teachers.” Accordingly, the Court accepted the provisions of the proposed plan as they related to achieving the hiring goals as provided in the Consent Decree. However, the Court noted that: [t]o insure a continued good faith effort, the school district is to provide the Court with semi-annual reports regarding the efforts to attain the hiring goals of the Consent Decree. The School District is to provide the Court with a report prior to conducting teacher and staff recruiting for the following academic year period. The report is to thoroughly explain the method and extent of the recruitment and hiring expected for the following academic year. The second semi-annual report is to be presented to the Court following the completion of recruiting and hiring for an academic year. The second semi-annual report is to inform the Court of the actual recruiting techniques utilized and the result of such recruiting, with particular emphasis on minority and nonminority hiring. Id. at 20. The Court noted further that “[s]uch reports will enable the Court to monitor the progress of the school district in attaining the hiring goals during the time period provided under the Consent Decree. Upon motion by any party, or on the Court’s own motion, a hearing will be held regarding the school district’s efforts to comply with the hiring goals in the Consent Decree.” Id. Following the adoption and the initial implementation of the Lorain desegregation plan, the Court continued to closely oversee the implementation of the desegregation plan and to assure that Lorain was meeting the requirements of the Consent Decree. The Court required that progress reports be submitted for the Court’s review. The Court now moves on to make findings of fact regarding the implementation of the desegregation plan. The Court focuses specifically on the three following areas: 1.) the Composition of the student population in the Lorain City School District; 2.) the Bilingual Program, and 3.) the Hiring Goals. B. Implementation of the Plan. 1.Composition of Student Population in Schools. 1. The Goal Statement of the Consent Decree entered in the above-captioned case provides that Lorain shall eliminate racially identifiable schools and that Lorain shall assign students to school attendance areas so that each school will establish a composite minority student ratio of no more than a deviation of + 20 or — 15 percent from the district average percentage of each identifiable minority’s student racial composition. Consent Decree, Docket No. 76 at 7. 2. At the time the Consent Decree was entered into in the above-captioned case, six schools, Fairhome Elementary School, Hawthorne/Boone Elementary School, Lincoln Elementary School, Lowell Elementary School, Whittier Junior High School, and Southview High School, were out of compliance with the terms of the Consent Decree with respect to the composition of the minority student population. Transcript, Docket No. 401 at 594-95. 3. Former Superintendent of the Lorain City School District, John Pavic, originated the idea of utilizing magnet school programs as a means of coming into compliance with the terms of the Consent Decree. Transcript, Docket No. 394 at 481. Lorain proposed the use of a magnet school program as a method to achieve the student population ratios set forth in the Consent Decree. Lorain began with magnet programs in two of the buildings which were out of compliance, Fairhome Elementary School and Hawthorne/Boone Elementary, for the 1985-86 school year. Transcript, Docket No. 399 at 14. The magnet programs in these buildings proved successful. Accordingly, the Lorain magnet programs were expanded into other buildings to bring all schools into compliance with the student population ratios in the Consent Decree. 4. At present, all twenty-one buildings in the Lorain City School District are racially balanced within the limits outlined in the Consent Decree. Transcript, Docket No. 399 at 16. 5. At the time the parties entered into the Consent Decree in the above-captioned case and formulated the desegregation plan for achieving the goals of the Consent Decree, it was thought that it would be necessary to move approximately 650 students to achieve the requisite racial composition of the student population. Transcript, Docket No. 394 at 413. However, when Lorain actually began implementing its magnet desegregation program, it was discovered that Lorain in fact had to move in excess of 1200 students to maintain a viable desegregation program. Lorain discovered that the movement of the bare minimum number of students to come into compliance with the terms of the Consent Decree would not result in long-term compliance in that if Lorain only moved the minimum number of students and one or two students left a particular school building, then the building would fluctuate in and out of compliance very frequently. Transcript, Docket No. 394 at 414; Transcript, Docket No. 401 at 599-600. The Court finds that Lorain needed to move more than the 650 students in order to have a viable long-term desegregation plan. 6. The original 650 number arrived at did not include students who needed to be moved for the purpose of bilingual education in the Lorain City School District. Transcript, Docket No. 401 at 600. 7. Lorain has expanded its magnet school program beyond the magnet programs necessary to achieve the goals of the Consent Decree in the above-captioned case. Seventeen out of twenty-one schools in Lorain currently have magnet programs. Transcript, Docket No. 401 at 645-46. The additional magnet programs in place in the Lorain City School District help Lorain to maintain desegregation in its school district but are not necessary for Lorain to maintain compliance with the terms of the Consent Decree with respect to composition of student population. Id. at 615. 8. There are approximately 1300-1350 students involved in magnet programs necessary to remain in compliance with the terms of the consent decree, and approximately 2000 to 2200 students involved in the non-court ordered magnet programs. Transcript, Docket No. 401 at 647. There are approximately 3500 students involved in magnet programs in Lorain out of a total student population in the District of about 12,300 students. Transcript, Docket No. 399 at 22; Transcript, Docket No. 401 at 648. 9. As is outlined below, the Palm Academy building is out of compliance with the racial balance set forth in the Consent Decree since it houses a large component of the bilingual program and necessarily has a high concentration of Hispanic students. However, the Court has given its approval for the bilingual program at Palm Academy to operate even though it results in an otherwise impermissible concentration of Hispanic students in one school building. 2.The Bilingual Program. 1. The plaintiffs have taken the position since the inception of this litigation that they adequately represent all minority students in the Lorain City School District. However, it became apparent to the Court that the Hispanic students in the Lorain City School District and their parents believed that they were entitled to separate counsel to adequately represent their interests. The Court found that the Hispanics in Lorain are particularly concerned about the hiring of Hispanic individuals. Additionally, the Court found that the Hispanics are committed to the continuance and further development of an adequate bilingual program in the Lorain City School District and this interest in the bilingual program led to tension between counsel for plaintiffs and the Hispanics. Accordingly, on April 11, 1989, the Court recognized the Coalition for Hispanic Issues and Progress (“CHIP”) as an intervening party and appointed Mr. Jose Feliciano of Baker & Hos-tetler to represent CHIP, (Docket No. 252). Since that date, the Hispanic interests have enjoyed separate representation. 2. The Consent Decree provides that the Lorain City School District shall retain an independent contractor to evaluate the bilingual programs currently in effect in Lorain to determine the effectiveness of said programs and shall also eliminate program shortcomings that may be discovered in the evaluation process and implement modifications. Consent Decree, Docket No. 76 at 7-8. 3. The evidence revealed that at the time the Consent Decree was entered, Lo-rain did have some bilingual education programs in place; however, Lorain did not have a core bilingual program in place and the programs that were in place were not meeting the special needs of Lorain’s Hispanic student population. Transcript, Docket No. 401 at 691-93. That is, Lorain did not have a program in place which was effective at keeping language deficient students in school and mainstreaming such students into the regular student body. 4. Pursuant to the terms of the Consent Decree, an evaluation of Lorain’s bilingual education program was conducted and the results lodged with the Court on August 9, 1985, (Docket No. 107). 5. After the evaluation of the bilingual program was conducted, Lorain developed a core bilingual program to meet the needs of the Lorain City School District’s language deficient students. Transcript, Docket No. 303 at 5. The bilingual program put in place is located in four different school buildings throughout the Lorain City School District. Each school houses a different component of the bilingual education program. The focus in the program is to provide students with effective English language instruction. 6. In the 1986-87 school year, Lorain reopened the Palm Academy school building which was closed at the time of the entrance into the Consent Decree. The Palm Academy building was reopened because Lorain needed a place to house the component of its bilingual program which involves the instruction of students who do not have any English-speaking skills. The component of the bilingual program housed at the Palm Academy school contains students grades kindergarten through sixth who need instruction in Spanish because they do not speak any English. Transcript, Docket No. 303 at 5. Palm Academy houses students who need extensive instruction in both their native language and in English. The bilingual program at Palm Academy uses a child’s first language as an interim medium of instruction until the child acquires fluency in the second language. Status Report, Docket No. 358 at 10. 7. Recognizing that by housing a major component of the bilingual program at the Palm Academy building, the building would necessarily be out of compliance with the percentages mandated by the Consent Decree, Lorain opened a magnet program in the Palm Academy building. The magnet program in the Palm Academy building is a Montessori program involving Caucasian, Black, and Hispanic students. Transcript, Docket No. 303 at 5-6. 8. The Court finds that bilingual programs in general are race selective in that in order to be successful, such programs involve a high concentration of, for instance, Hispanic students in one location. 9. In an Order dated April 11, 1990, (Docket No. 306), the Court modified the Consent Decree so as to exempt Palm Academy from the requisite racial balance of the Consent Decree only to the extent that the racial imbalance is caused by the presence of the bilingual program at Palm Academy. The Court ordered that all other programs at Palm Academy except for the component of the bilingual program must remain in compliance with the racial balance stipulated to in the Consent Decree. The Montessori Program at Palm Academy is racially balanced. Transcript, Docket No. 303 at 6. 10. The other components of the bilingual program other than that located at Palm Academy are located at Meister Elementary School, Longfellow Junior High School, and Southview High School. The component of the bilingual program at Meister Elementary School includes students who already have some degree of English proficiency but not enough to function successfully in the mainstream classroom. The program at Meister continues to develop the English language skills which the students already have. The native language is used only for checking comprehension and/or tutoring as needed. Grades kindergarten through second are in self-contained classrooms with a bilingual teacher and a bilingual teacher aide. Grades three through six are organized as a pull-out English as a Second Language (“ESL”) program. Students in grades three through six at Meister follow the regular schedule of the mainstream classroom with some modifications. A high intensity language training center for grades seven through eight is offered at both Longfellow Middle School and Southview High School. This program is for students who are identified as monolingual speakers of a language other than English or as limited English-proficient students. Bilingual teachers and bilingual teacher aides work with the students in the ESL classroom. Students are mainstreamed in regular classrooms for many subjects. Status Report, Docket No. 358 at 11. 11. The Court finds that Lorain’s bilingual program has been successful in terms of meeting the needs of language deficient students in the Lorain City School District. Lorain has been successful in mainstreaming bilingual students. The overall test scores of bilingual students have improved as a result of the implementation of the bilingual program as it now exists in Lo-rain. In the 1990-91 school year, thirteen students from the bilingual program will graduate in Lorain. Transcript, Docket No. 401 at 611. Prior to the implementation of a cohesive core bilingual program, Lorain had difficulty keeping bilingual students in school. 3.Hiring Goals. 1. The Goal Statement of the Consent Decree provides that the hiring goal in place in the Lorain City School District shall be the minority/majority ratio of the adult population in Lorain in the year of achievement. The Consent Decree further provides that the Lorain City School District shall have five years during which to achieve the hiring goal as it relates to Blacks and seven years as it relates to Hispanics. Consent Decree, Docket No. 76 at 13-14. 2. Lorain’s affirmative action goal in terms of hiring pursuant to the Consent Decree is 12% Black and 14% Hispanic since these are the percentages of adult minorities in the population of the City of Lorain. 3. The Lorain City School District has submitted to the Court annual status reports on its progress under the desegregation plan in place in Lorain. In its most recent report filed with the Court on February 4, 1991, (Docket No. 358), Lorain provided the Court with a report on the progress of the Lorain City School District in meeting its affirmative action goals. The report indicates that Lorain has not as yet met its hiring goals under the Consent Decree. The recent status report indicates that as of December 31, 1990, Lorain had 873 professional employees of which 86, or 9.9%, were Black and 68, or 7.8% were Hispanic; Lorain had 632 classified employees of which 91, or 14.4%, were Black and 106, or 16.8%, were Hispanic. Status Report, Docket No. 358. 4. The Court finds that Lorain has made a continuous and good faith effort toward achieving the hiring goals in the Consent Decree. In a hearing conducted on February 20, 1987, the Court heard testimony regarding the efforts Lorain had made up to that point toward achieving the hiring goals in the Consent Decree. The testimony revealed that Lorain advertised for positions at many colleges and universities. Lorain sent vacancy notices to the colleges and universities and sent a monthly posting to the Minority Affairs Office of the colleges and universities. Lorain flew in or paid for the transportation costs of any minority applicants who were willing to travel to Lorain for interviews. Lorain also became a part of the Ohio Minority Recruitment Consortium which is a group of about sixteen to eighteen school districts in Ohio that have an active commitment to minority recruitment. Lorain also trained its recruiters. Transcript, Docket No. 174 at 22-24. 5. Lorain indicated in its most recent status report to the Court that it employed the following recruitment procedures during the 1990-91 school year. Lorain had an “open interview” practice until the staffing for the 1990-91 school year was completed. Under the “open interview” practice, a teacher applicant was granted an immediate interview by the School District’s personnel office. Advertisements announcing the “open interview” practice were placed in the Sunday editions of both the Plain Dealer and the Akron Beacon Journal through August of 1990. The Personnel Office in Lorain continued to conduct interviews when employment vacancies occurred. When vacancies occurred during the school year, minority applicants whose names were pulled from the data bank maintained by Lorain’s Personnel Office were contacted. Lorain still reimburses minority applicants for travel expenses if they come from out of state to interview. Professional staff of the Lorain City Schools continue to interview teacher candidates both at colleges within Ohio and in locations outside of Ohio where there are significant numbers of minority teaching candidates. The staff members participating in the recruitment efforts are provided with training. Lorain has continued its participation in the Ohio Minority Recruitment Consortium. Likewise, Lorain advertised for positions in the Black Employment Education Journal and the Spanish language newspaper El Dia Nuevo. Lorain has established contacts with the Lorain NAACP and Centro de Servicios Sociales Para La Communidad Hispana to develop procedures to welcome minority applicants to the Lorain community. Likewise, Lorain has entered into discussions with representatives of these community organizations to find ways to recruit more minority persons into the Lorain community. Lorain has also developed plans to target recruitment efforts for the 1991-92 school year in urban areas where large numbers of minority teachers are employed. 6. Lorain has made a continued and good faith effort at achieving the hiring goals. Lorain’s inability to achieve the hiring goals set forth in the Consent Decree has not been a result of any delinquency or inaction on the part of Lorain. Instead, Lorain’s inability to meet the hiring goals has been a result in great part to several factors outside of Lorain’s control. One major factor is Lorain’s inability to compete with school systems with more competitive salaries. A second factor is the location of the Lorain City School District. The Court finds that it is difficult to interest out of state applicants into coming to Lorain, Ohio, especially when salaries are not highly competitive. Third, the Court finds that it is difficult to find minority applicants to fill certificated positions when the need arises. IV. THE GROWING FINANCIAL CRISIS IN THE LORAIN CITY SCHOOLS. 1. In an application for federal grant money for its magnet programs dated November 6, 1986, Lorain indicated that an independent audit which had just been performed revealed that of the $2,000,000 pool for the Lorain desegregation plan, $600,-000, or 30% of the total amount designated for a seven year period, was utilized during the period of August 1984 to December 1985. Ohio Department of Education, Hearing Exhibit 11 at 26-27. Lorain indicated that this amount of money was spent when the transportation costs for the magnet programs were relatively minimal in that only two magnets were in place in 14 classrooms impacting 300 students. 2. The total cost for Lorain’s court ordered magnet programs for the 1989-90 school year was $5,201,834.00. The estimated total cost for Lorain’s court-ordered magnet programs for the 1990-91 school year is $5,446,353.00. see, Appendix C to the Court’s Opinion. 3. The estimated total cost for the non-court ordered magnet programs in place in Lorain for the 1990-91 school year is $1,700,486.00. 4. By the third year of Lorain’s magnet desegregation program, the $2,000,000.00 allocated for the seven year period of the desegregation plan was spent and Lorain was supporting much of its magnet program through general funds. Transcript, Docket No. 394 at 418. 5. To effect its magnet desegregation program Lorain had to add many additional employees. Id. at 421. Lorain had to add a desegregation specialist as well as additional administrators, teachers and clerical persons. Lorain employed 692 teachers in 1984. Lorain employed 804 teachers after implementation of its magnet program. Transcript, Docket No. 402 at 826. 6. In order to attempt to achieve the hiring goals under the Consent Decree, Lo-rain had to increase salaries so that it could be competitive in the job market and attract minority applicants. Id. at 421-22. 7. Lorain has received about $3,400,-000.00 in federal grant money for its magnet programs. Id. at 434. Lorain’s last grant was received in fiscal year 1990. Transcript, Docket No. 386 at 167. 8. The Lorain City School District’s total property tax valuation for the tax year 1989 was $469,223,128.00 consisting of agricultural, residential, industrial, commercial, public utility, personal property and railroad. Transcript, Docket No. 399 at 30. Lorain has 3.44 millage within the 10 mill limitation, voter approved, 28.20 outside (the ten mill limitation) millage on a continuing basis. Under Ohio law, voters in the school district may adopt millage on a continuing basis or on a fixed term emergency basis. Lorain has in place a 7.45 emergency five-year levy. The final year of collection of the five-year levy is 1992. Lorain also has in place a 7.50 emergency three-year levy. The last year of collection for that voted levy is 1991. A failure by the Lorain voters to renew the two emergency levies totaling 14.95 millage will create even more serious financial problems for the district and the implementation of the desegregation order. Id. at 3031. 9. Lorain has the lowest tax value per pupil out of the five major Ohio cities under desegregation orders. Lorain’s tax value per pupil is about $39,908.00 while Cleveland’s is $56,660.00, Dayton’s is $56,-928.00, Cincinnati’s is $78,330.00 and Columbus’ is $82,871.00. Lorain Board of Education Exhibit 5002. Lorain ranks about 408th out of about 612 school districts in Ohio in tax value per pupil. Transcript, Docket No. 386 at 177. 10. Lorain’s local tax rate is 53rd in the State. Transcript, Docket No. 386 at 176. When Lorain’s local support is combined with its property tax valuation, it is found that the District is voting millage above the State average, but is still not able to generate enough dollars to support its programs since the property base is so low. Id. at 177. 11. Several years ago Lorain elected to become involved in an early retirement program. The Early Retirement Incentive (“ERI”) program was a negotiated portion of a collective bargaining agreement. Transcript, Docket No. 394 at 459. Lorain entered into the ERI program as a way to save money in the long-term by replacing teachers on the high end of the salary scale with teachers at the lowest end of the pay scale. Lorain also entered into the ERI program as a way to free up positions so that they could be filled by minorities and Lorain could work toward achieving its affirmative action goals under the Consent Decree. Id. ERI’s have certain up front costs since a school district must buy out the existing contracts. However, ERI’s are cost effective in the long-term. The school district involved in an ERI must make payments to the State Teachers Retirement System (“STRS”) on behalf of those persons agreeing to retire early. Id. at 460. The costs of the ERI program are determined by the STRS. Transcript, Docket No. 401 at 748. The costs are based on actuarial tables provided to participating school districts by the STRS. In the early days of ERI programs, simple actuarial accounting was utilized and the ERI programs were a good deal for school districts. However, recently the costs of the ERI program have skyrocketed due to changes made in the actuarial tables by the STRS. Lorain discovered that if all persons eligible to take advantage of the ERI were to take advantage of it in the Spring of 1991, Lorain would have to pay out $9,387,-460.00. Recognizing the potentially devastating effect of the ERI, Lorain met with the teachers union and the administrators association in October of 1990 and negotiated a new contract to begin in August of 1991. As part of this bargain, the teachers association and administrators association and Lorain agreed that anyone who was planning to elect to take the ERI had to make him or herself known by a date certain. The contract entered into by Lorain is less costly than the ERI program would have been had all persons eligible for early retirement taken the option. Transcript, Docket No. 401 at 762. Twenty-four teachers and two administrators are retiring under the ERI in fiscal year 1991 at a cost to Lorain of $2,972,915.00. Transcript, Docket No. 401 at 752; see, Appendix E to the Court’s Opinion. 12. Lorain’s contract with its teachers that runs from August 1, 1988 until August 31, 1991 provided for a ten percent pay increase in January of 1990 and a 6.5 percent pay increase in August of 1990. Transcript, Docket No. 401 at 765. The newly negotiated three-year teachers’ contract to go into effect in August of 1991 provides for raises of five percent for each year beginning in August of 1991. The contract also provides for the option of cashing in an increased number of sick days. In addition, the contract provides for additional steps at the top of the pay scale. Id. at 767. 13. Lorain’s average teacher salary for fiscal year 1991 is $34,259.00 compared to an average teacher salary in the State of Ohio which is $32,053.00. Transcript, Docket No. 386 at 178. Lorain’s average teacher salary is second in the county, second by type of district, and 93rd in the State. Id. 14. In school year 1989-90, the average teacher salaries in the major Ohio cities involved in desegregation programs were as follows: 1.) Cleveland — $34,465.00; 2.) Columbus — $32,450.00; 3.) Cincinnati— $32,487.00; 4.) Dayton — $31,155.00, and 5.) Lorain — $29,256.00. 15. It is projected that Lorain will pay approximately 97.5% of its total revenue for salaries and fringe benefits in fiscal year 1991. Transcript, Docket No. 386 at 159. The average school district spends about 84 to 85% of its general operating funds on salaries and fringe benefits. Id. 16. Lorain made numerous reductions and cuts in its budget in the face of its financial crisis. Lorain, inter alia, cut the hours of library aides, monitors, and magnet teacher aides, made changes in transportation, made cuts in textbook adoptions, and cut out a math program. Transcript, Docket No. 401 at 727. The Board made cuts in its own budget, and overtime was reduced. Id. at 727-28. These cuts, made in December of 1990, resulted in over $963,000.00 in savings. Id. at 728. All but about $200,000.00 worth of these cuts are permanent. Id. A second round of cuts were made in February of 1991. On February 6, 1991, Lorain eliminated Spring activities and sports programs. Lorain also eliminated the need for night custodians, and started a policy whereby classrooms are cleaned only every other day. These cuts resulted in a savings of $1,066,000.00. Id. at 728-29. In April of 1991 Lorain decided to make the following additional cuts effective July 1, 1991. Lorain will close Harrison Academy at a savings of about $73,000.00, and will close the administrative building at an approximate savings of about $150,000.00 per year. By closing these buildings Lo-rain will save over $700,000.00 in repair work that would be necessary were the buildings to remain open. Lorain will reorganize the Hawthorne/Boone school at a savings of $318,000.00; Lorain will also change some school buildings around. Lo-rain will make a reduction in support staff of over $760,000.00 and also a reduction in transportation costs of $275,000.00. Lorain will save $258,000.00 by reducing six administrators. Id. at 732. Lorain has made total reductions in spending this year in the amount of $3,862,-000.00, and only $286,000.00 of the reductions are one time only savings. Id. V. FACTUAL BACKGROUND LEADING TO THE STATE’S AGREEMENT TO PAY 50% OF THE COSTS OF THE LORAIN DESEGREGATION PLAN UP TO A CAP OF $1,000,000.00. 1. The Consent Decree provides that the State of Ohio will pay to the Lorain City School District 50% of the costs of the-Lorain Desegregation Plan up to a cap of $1,000,000.00. Consent Decree, Docket No. 76 at 4. 2. The last payment by the State of Ohio to Lorain for purposes of the desegregation plan was made in fiscal year 1988. Transcript, Docket No. 386 at 167. 3. Dr. G. Robert Bowers, former Assistant Superintendent of Public Instruction in the Ohio Department of Education, was involved in all of the desegregation cases in the State of Ohio involving the State Department of Education, including the Cleveland, Columbus, Dayton, and Cincinnati cases. Dr. Bowers was the representative for the State of Ohio in the Lorain desegregation case. Dr. Bowers advised Dr. Pavic, then Superintendent of the Lo-rain City School District, to settle the Lo-rain desegregation case since Dr. Bowers felt that if the case went to trial the defendants would be found liable for discrimination. Id. at 87; Transcript, Docket No. 394 at 406. 4. In the Cleveland, Columbus and Dayton cases, the school systems were found liable and the State of Ohio was ordered to pay 50% of the costs of implementing the desegregation plans stemming out of those cases. 5. As testified to by Dr. Bowers, the State of Ohio has never challenged at an appellate level a district court’s order following a finding of discrimination that the State of Ohio must bear 50% of the costs of implementation of a desegregation plan. Transcript, Docket No. 383 at 50-51. 6. Dr. Bowers proposed to Dr. Pavic that the State contribute 50% of the desegregation costs up to a cap of $1,000,000.00. Transcript, Docket No. 383 at 28. Neither Superintendent Pavic nor the Lorain City School District had previous experience in a desegregation lawsuit. Transcript, Docket No. 394 at 407-408. Bowers’ $1,000,000.00 proposal was not negotiated; rather, the State, through Dr. Bowers, offered that amount to Lorain and Lorain accepted the $1,000,000.00. Transcript, Docket No. 394 at 411. 7. Dr. Bowers used the earlier settlement agreement entered in the Cincinnati desegregation case as a model for the State’s settlement proposal in Lorain. Transcript, Docket No. 383 at 28. 8. Following intense negotiations between the State and the Board of Education for Cincinnati which included the involvement of then Governor Rhodes, the State agreed to contribute $35,000,000.00 toward the desegregation costs in the Cincinnati case. At the time the Consent Decree was entered in the Cincinnati case, Cincinnati was already transporting 14,000 students in the magnet school program designed to bring about the integration of the student population. Under the terms of the Consent Decree, Cincinnati agreed to increase the magnet school student population to 20,000. The State’s contribution of $35,000,000.00 was related to transportation and capital costs involved in increasing the student population in the magnet school program. The $35,000,000.00 State contribution was to be used to achieve the movement of between 14,000 to 20,000 pupils or an average of 17,000 pupils in order to effect the terms of the Cincinnati Settlement Decree. Transcript, Docket No. 383 at 58. 9. Dr. Bowers proposed the State’s contribution of $1,000,000.00 in the Lorain case because he determined that somewhere between 500 and 650 students would be involved in Lorain to achieve compliance with the Consent Decree’s + 20%/ — 15% mandate in comparison with the 14,000 to 20,-000 students in the Cincinnati magnet school program. Using the median of 17,-000, Dr. Bowers construed the comparison to constitute a ratio of 35 to 1. Those calculations formed the basis for Dr. Bowers’ proposal that the State’s 50% participation in the desegregation costs in Lorain be capped at $1,000,000.00. Id. at 28. 10. The enrollment in the Lorain City School District is approximately 12,300 students. The enrollment in the Cincinnati Public Schools is approximately 51,110. 11. The Court finds that the ratio utilized by Dr. Bowers to arrive at the $1,000,-000.00 figure was faulty in that the testimony and evidence at the hearing in this case revealed that Cincinnati was already moving 14,000 students in magnet programs which were implemented prior to the entrance into the Cincinnati settlement agreement. Thus, the State’s contribution was only going toward the start-up costs for involving an additional 6,000 students in the program. Likewise, as was outlined above, it was necessary to move greater than the 650 students it was originally thought would need to be moved in Lorain to effect compliance with the terms of the Lorain Consent Decree. Accordingly, the ratio used to justify the $1,000,000.00 cap was not realistic nor supported factually. 12. The State envisioned that one half of the $1,000,000.00 would go towards creation or start-up costs of magnet programs and the other half of the $1,000,000.00 would go towards transportation of students involved in the magnet programs. Transcript, Docket No. 383 at 59. 13. For fiscal years 1983 through 1990, the State of Ohio Department of Education has contributed the following amounts to the desegregation programs in the following cities: 1.) Cincinnati — $35,000,000.00 plus $543,628.56 in plaintiffs’ attorney’s fees; 2.) Cleveland — $213,372,782.67 plus $1,425,880.93 in plaintiffs’ attorney’s fees; 3.) Columbus — $41,654,210.00 plus $758,-458.01 in plaintiffs’ attorney’s fees; 4.) Dayton — $29,516,508.00, and 5.) Lorain— $1,000,000.00 plus $60,078.15 in plaintiffs’ attorney’s fees. 14. Neither Superintendent Pavic nor the Lorain School District had ever been involved in a desegregation lawsuit prior to the present case. Transcript, Docket No. 394 at 407-408. The State, as was stated above, had been a defendant in several desegregation cases and had recently been involved in the Cincinnati settlement. 15. Prior to implementation of its magnet program as a means of complying with the Consent Decree, Lorain had little knowledge of what is involved in starting and implementing a magnet program. In particular, Lorain did not understand or comprehend the magnitude of the costs of implementing a magnet desegregation plan. Id. at 476. 16. Lorain’s commitment to the magnet school program as the means to comply with the Consent Decree has produced a successful desegregation program in that the magnet schools have produced a stabilization of the school population, both numerically and racially. Likewise, Lorain’s commitment to achieving the hiring goals in the Consent Decree has resulted in a steady increase in the hiring of minorities for both the certificated and noncertificated staffs. The highly successful desegregation program in Lorain has cost a great deal more than it was originally thought the program would cost. The underlying premise of the State’s agreement to pay 50% of the desegregation costs in Lorain was that the costs would not exceed $2,000,000.00. That premise was not realistic as Lorain’s experience has demonstrated. VI. LAW AND DISCUSSION. A. Statement of the Applicable Law. The Court now turns to a discussion of the law regarding a court’s authority to modify a consent decree. The Sixth Circuit explained in Stotts v. Memphis Fire Department, 679 F.2d 541 (6th Cir.1982), rev’d on other grounds, 467 U.S. 561, 104 S.Ct. 2576, 81 L.Ed.2d 483 (1984), that a “consent decree is essentially a contractual agreement subject to continued judicial policing.” Id. at 556. The Sixth Circuit further explained that “[t]he terms of the decree, unlike those of a simple contract, have unique properties. A consent decree has attributes both of a contract and of a judicial act.” Id. (citations omitted). A trial court always has continuing jurisdiction to enforce a consent decree as written. Id. at 557. Likewise, a “trial court has continuing jurisdiction to modify a decree should its operation become unreasonable.” Id. (citations omitted). The traditional test to determine whether a trial court can rightfully modify a consent decree was set forth by the Supreme Court in United States v. Swift & Co., 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999 (1932), an antitrust case which was resolved through a consent decree. In Swift, the Supreme Court noted that “[a] continuing decree of injunction directed to events to come is subject always to adaptation as events may shape the need.” Id. at 114, 52 S.Ct. at 462 (citations omitted). Thus, the Supreme Court recognized that a trial court does indeed have the power to modify a consent decree. The Supreme Court proceeded, however, to formulate a stringent standard for determining whether a modification of a consent decree is warranted in a particular case. The Court stated in this respect that: [njothing less than a clear showing of grievous wrong evoked by new and un-forseen conditions should lead us to change what was decreed after years of litigation with the consent of all concerned. Id. at 119, 52 S.Ct. at 464. Though cognizant of the stringent Swift standard for modification of consent decrees, several courts have begun to develop a less stringent standard for modification of consent decrees entered into in institutional reform litigation as opposed to litigation involving private individuals such as were involved in the Swift case. In Heath v. DeCourcy, 888 F.2d 1105 (6th Cir.1989), the Sixth Circuit considered the appropriate standard for modifying a consent decree entered into by agreement of the parties in the context of institutional reform litigation. Id. at 1106. In that case, a group of inmates sued under 42 U.S.C. § 1983 challenging the conditions of their confinement in a county jail in Hamilton County. The suit was resolved through the entrance into a consent decree. When the jail population began to exceed the capacity of the facility, the inmates sought to hold the county in contempt of the consent decree and the county moved to modify the consent decree. The district court granted the county’s motion in part, observing that “[t]he modification was ‘mandated by common sense as it does not increase risk to the inmates and permits more effective utilization of the government’s resources...., thereby promoting the public interest of having reasonable and lawful sentences served.’ ” Heath v. DeCourcy, 888 F.2d at 1108. In granting the motion to modify the consent decree, the district court in Heath relied on a prior Sixth Circuit case, Stotts v. Memphis Fire Dep’t, 679 F.2d 541 (6th Cir.1982), in which the Sixth Circuit stated that a consent decree can be modified (1) when done in accordance with basic principles of contract law, (2) when the decree is void or no longer equitable, or (3) when the circumstances of the case change. Heath, 888 F.2d at 1108 (citing Stotts, 679 F.2d at 560-61). The inmates appealed the district court’s ruling. The Sixth Circuit affirmed the district court’s decision and held that the district court did not err in applying the standard set out in Stotts v. Memphis Fire Dep’t., 679 F.2d 541 (6th Cir.1982), rev’d on other grounds, 467 U.S. 561, 104 S.Ct. 2576, 81 L.Ed.2d 483 (1984), for modifying a consent decree. The Sixth Circuit noted that applying a flexible standard in modifying consent decrees is more appropriate in the context of institutional reform than in the context of consent decrees between private parties because, unlike consent decrees between private parties, the effect of institutional consent decrees reaches beyond the immediate parties and impacts on the public’s right to the sound and efficient operation of its institutions. With respect to consent decrees arising out of institutional reform litigation, the Court in Heath observed that [b]roader judicial discretion to modify the parties’ agreement is required so that the agreed upon solution to the problem giving rise to the litigation may be fine-tuned to accomplish its goal. The efficacy and consequences of a decree directing institutional reform cannot be seen clearly from the courtroom. Time and experience may yield new knowledge that compels modification of the original agreement [in order to accomplish its end]. Heath v. DeCourcy, 888 F.2d at 1109. Accordingly, the Sixth Circuit held that “in the area of institutional litigation, consent decrees arrived at by mutual agreement of the parties involved are subject to a lesser standard of modification than that dictated by Swift.” Heath v. DeCourcy, 888 F.2d at 1110. The Court explained that to modify such consent decrees, the Court need only identify a defect or deficiency in its original decree which impedes achieving its goal, either because experience has proven it less effective, disadvantageous, or because circumstances and conditions have changed which warrant fine-tuning the decree.... Id. The Sixth Circuit indicated that “ ‘[a] consent decree may ... be modified where a better appreciation of the facts in light of experience indicates that the decree is not properly adapted to accomplishing its purposes.’ ” Id. at 1108 (quoting Chance v. Board of Examiners, 561 F.2d 1079, 1086 (2d Cir.1977)). The Sixth Circuit further elaborated that the less stringent standard “will require the trial court to balance the interest in preserving consent decrees entered into by agreement between private parties against the public interests sought to be achieved through modification of the decree.” Id. at 1110. The Court noted, however, that: this standard is not inconsistent with Swift, since in the area of commercial consent decrees — which typically involve primarily private, not public, interests— any public interest in modifying the decree will ordinarily be less than the interest in honoring and preserving the private business arrangements established by the decree. Conversely, the public interest in modifying institutional consent decrees — which typically involve significant public interests — will ordinarily outweigh the interest of preserving the decree where sufficient reason for modification is shown. Id. This less stringent standard for modification of consent decrees in institutional-reform cases has been applied by other Circuit courts as well. Heath, 888 F.2d at 1109. The Fourth Circuit applied a less stringent standard in Plyler v. Evatt, 846 F.2d 208 (4th Cir.1988), cert. deni