                   UNITED STATES COURT OF APPEALS
                    FOR THE EIGHTH CIRCUIT
                           ___________

                           No. 96-3333
                            ___________
Little Rock School District;     *
                                 *
                 Appellant,      *
                                 *
Lorene Joshua;                   *
                                 *
      Intervenor Plaintiffs,     *
                                 *
Servicemaster Management         *
Services;                        *
                                 *
                Intervenor,      * Appeal from the United States
                                 * District Court for the
Anne Mitchell; Bob Moore, Pat    * Eastern District of Arkansas.
Gee; Pat Rayburn; Mary J. Gage; *
North Little Rock Classroom      *
Teachers Association; Pulaski    *
Association of Classroom         *
Teachers; Little Rock Classroom *
Teachers Association; Alexa      *
Armstrong; Karlos Armstrong;     *
Ed Bullington; Khayyam Davis;    *
Janice Dent; John Harrison;      *
Alvin Hudson; Tatia Hudson;      *
Milton Jackson; Leslie Joshua; :
Stacy Joshua; Wayne Joshua;      *
Katherine Knight; Sara           *
Matthews; Becky McKinney;        *
Derrick Miles; Janice Miles;     *
John M. Miles; NAACP; Joyce      *
Person; Brian Taylor; Hilton     *
Taylor; Parsha Taylor; Robert    *
Willingham; Tonya Willingham;    *
                                 *
      Intervenor Plaintiffs,     *
                                 *
          v.                     *
                                 *
North Little Rock School         *
District; Leon Barnes; Sheryl    *
Dunn; Mac Faulkner; Richard A. *
Giddings; Marianne Gosser; Don  *
Hindman; Shirley Lowery; Bob    *
Lyon; George A. McCrary; Bob    *
Moore; Steve Morley; Buddy      *
Raines; David Sain; Bob         *
Stender; Dale Ward; John Ward;  *
Judy Wear; Grainger Williams;   *
                                *
                Defendants,     *
                                *
Pulaski County Special School   *
District;                       *
                                *
                   Appellee,    *
                                *
State of Arkansas;              *
                                *
                 Defendants,    *
                                *
Office of Desegregation Monitor;*
                                *
                    Claimant,   *
                                *
Horace A. Walker; P. A.         *
Hollingsworth; Kenneth G.       *
Torrence; Phillip E. Kaplan;    *
Janet Pulliam; John Bilheimer; *
Dale Charles; Robert L. Brown, *
Sr.; Gwen Hevey Jackson; Diane *
Davis; Raymond Frazier;         *
                                *
                Plaintiffs,     *
          v.                    *
                                *
Pulaski County Board of         *
Education; O. G. Jacovelli,     *
individually and as President   *
of the Board of Education of    *
the Little Rock School District;*
Patricia Gee, individually and *
in her official capacity as a   *
member of the Board of          *
Education of the Little Rock    *
School District, a public body; *
Dr. George Cannon, individually *
and in his official capacity    *
as a member of the Board of     *
Education of the Little Rock    *


                                 -2-
School District, a public body; *
John Moore, individually and in *
his official capacity as a      *
member of the Board of          *
Education of the Little Rock    *
School District, a public body; *
Dorsey Jackson, individually    *
and in his official capacity    *
as a member of the Board of     *
Education of the Little Rock    *
School District, a public body; *
Dr. Katherine Mitchell, indivi- *
dually and in her official      *
capacity as a member of the     *
Board of Education of the       *
Little Rock School District, a *
public body; W. D. Hamilton,    *
individually and in his official*
capacity as a member of the     *
Board of Education of the       *
Little Rock School District, a *
public body; Cecil Bailey,      *
individually and in his         *
official capacity as a member   *
of the Pulaski County Board of *
Education, a public corporate; *
Thomas Broughton, individually *
and in his official capacity    *
as a member of the Pulaski      *
County Board of Education, a    *
public corporate; Dr. Martin    *
Zoldessy, individually and in   *
his official capacity as a      *
member of the Pulaski County    *
Board of Education, a public    *
corporate;                      *
                                *
               Defendants,      *

                           ___________

                 Submitted: February 25, 1997

                     Filed: March 31, 1997
                          ___________

Before RICHARD S. ARNOLD, Chief Judge, and HEANEY and WOLLMAN,
     Circuit Judges.


                               -3-
                                ___________


HEANEY, Circuit Judge.



     Little Rock School District (LRSD) appeals from an order of
the United States District Court for the Eastern District of
Arkansas requiring it to pay the Pulaski County School District
(PCSSD)   $345,294   pursuant    to    a    settlement   agreement   in   the
interdistrict desegregation case. We affirm the order of the
district court essentially for the reasons stated in its opinion.


     At issue in this appeal is the entitlement to majority-to-
minority [M-to-M] payments and the amount each school district
would receive pursuant to the settlement agreement.         Paragraph O of
the settlement agreement provides in part:

     [A]ll M-to-M payments generated by Interdistrict School
     students paid by the State to LRSD and PCSSD (including
     payment to each district as sending district and
     receiving district), except transportation payments, will
     be pooled for the education of all Interdistrict School
     students. The instructional budgets of the Interdistrict
     Schools will be equalized.      This provision does not
     change each district’s obligation to construct and
     maintain the Interdistrict Schools within its boundaries.

(Settlement Agreement,§ II, ¶ O(3).)


     Pursuant to this court’s instructions, the district court
judge conducted an evidentiary hearing and subsequently ordered:

     [F]or each school year, the amount of LRSD’s and PCSSD’s
     financial contribution to the pool is calculated in
     accordance   with   Paragraph   O   of  the   Settlement
     Agreement.[There is no dispute as to the methodology for
     calculating these amounts.] The total amount of funds in
     the pool for a given year is then divided by the total

                                      -4-
number of M-to-M students in the interdistrict schools in both
districts to arrive at an equalized, per-student dollar amount for
educating them in the interdistrict schools.       For each school
district, the equalized per-student dollar amount is then
multiplied by the number of M-to-M students hosted by that district
in its interdistrict schools to determine the amount of the pooled
funds to which each district is entitled.

Little Rock School Dist. v. Pulaski Cty. Special School Dist. No.
1, LR-C-82-866, at 3 (E.D. Ark. July 30, 1996) (citations omitted).


     On appeal, LRSD argues that the district court erred in
dividing the pool based on the number of M-to-M transfer students;
rather, it asserts that the court should have divided the pool
based on the total number of students in the interdistrict schools.
Under    LRSD’s   method   of    calculation,   PCSSD    would   owe   LRSD
$1,270,839, instead of LRSD’s owing PCSSD $345,294 as ordered by
the district court.


     We review the factual findings of the district court under a
clearly erroneous standard and its interpretation of the Settlement
Agreement   de    novo.    The   district    court’s    interpretation   of
paragraph O is an acceptable one: it is just, it will promote
voluntary interdistrict transfers to interdistrict schools, and it
will provide a financial incentive to both districts to receive M-
to-M transfer students.     See Little Rock School Dist. v. Pulaski
Cty. Special School Dist. No. 1, 921 F.2d 1371, 1394 (8th Cir.
1990).


     We recognize that LRSD spends more per pupil to educate its
students in the interdistrict schools than PCSSD does and that the
district court formula will not fully equalize these costs, but we
do not believe that these differences are sufficient to release
LRSD from its pooling obligation.         Such a release would certainly



                                    -5-
inhibit   efforts     to   provide   an     integrated    education   to   many
students,    the   principal     objective     of   the   school   integration
proposal.     Nor are the differences sufficient to justify the
alternative   method       of   equalization    suggested    by    LRSD.   The
practical problems in that approach were found by the district
court to be insurmountable and we are not prepared to say that the
district court erred in making that assessment.


     The judgment of the district court is affirmed.


     A true copy.


            Attest:


                   CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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