The D.C. school system, in a move aimed at efficiency and economy, several years ago began renting vacant schools to the D.C. government. But now rueful school officials claim that their tenants will not pay, and they say they are afraid to get tough for fear that their tenants might do likewise and take an ax to the school budget.

The city, school officials say, owes the Board of Education about $2.7 million in back rent for the space three District agencies have occupied since 1982.

City officials counter, however, that their initial agreement with the schools was for a one-time payment for indefinite use of the buildings, which they point out are District property.

Meanwhile, school officials recently launched a leasing program designed to turn into rental space hundreds of classrooms in schools where enrollments are below capacity. The program is ideal, officials said, because it allows them to make money while keeping open dozens of underutilized schools.

Despite school officials' inability to collect money from the District government, the first institution asked if it wanted to rent empty classrooms under the new program was the government.

"The worst tenant we have is the D.C. government," said R. David Hall, a member of the D.C. Board of Education. "We have threatened to sue them. City Council member Hilda Mason (Statehood-At-Large) has written letters to D.C. Mayor Marion Barry about it. But, nothing's been done, yet," Hall said. "It has resulted in two sides of government fighting each other."

But, James Brown, associate superintendent for management services, said, "There could be a definite backlash if we try to make them pay or kick them out. We'll probably just forget it and try to make sure similar problems don't crop up under the new leasing program."

The Department of Human Services moved some of its offices into the Randall Elementary School building at First and I streets SW, and the Department of Corrections and the Fire Department moved their administrative headquarters into the Grimke Elementary School building at 1923 Vermont Ave. NW.

Documents shown to a reporter by school officials stipulated that the city government pay $970,944 each year, which figures out to less than $10 per square foot, for nine years to use Randall.

However, Gladys Mack, director of the District's Office of Policy and Program Evaluation, said, "Some of the documents in the contract pertaining to future payments just were not there when we signed.

"There was never any understanding that there would be any ongoing payments for either Grimke or Randall," Mack said. She said the city, which pays as much as $27 per square foot to rent commercial office space, saves money by using the school buildings. "The buildings are really owned by the D.C. government and they are in the school inventory for their use until such time that they turn them back to us," she said.

Mack, however, noted that she was hopeful of soon reaching an agreement with the schools that would take care of the situation. School officials would not comment on that.

The contracts for the corrections and fire department's use of Grimke, which stipulated that an initial payment of $282,975 and nine annual payments of $377,300 be made by the city, were never signed by city or school officials.

A contract is not binding "unless it is signed," Mack said.

But, George Margolies, legal counsel for the school system, said, "It's been our position that the city was obligated to pay us [annually] , or we could have rented those schools out to someone else." City officials apparently decided to "play us for suckers," he said.

The Rev. David Eaton, president of the school board, said school officials are reluctant to evict the city agencies for fear of reprisals. Collecting the overdue rents "hasn't been a top priority, but if someone recommends we sue, I'll put it on the agenda," he said. " [But] if we win the suit [and] city officials are forced to pay, all they're going to do is take it out of our operating budget for another program. It's a Catch-22 situation."

Gerry Johnson, an information specialist for the buildings and grounds division, said the city agencies were allowed to move into the buildings on "good faith" without being required to sign the contracts or pay "up-front money because the assumption was that, 'Hey, we're all in the District of Columbia government, they'll pay us.' But that hasn't been the case."

Brown said that, according to building inventory records, there is an estimated 850,000 square feet of space not being used for instructional programs and "potentially" available for leasing under the classroom leasing program. The income is supposed to be used for building repairs and other capital improvements, Brown said.

Brown has sent letters to the city General Services Administration real estate division, the Department of Administrative Services and 30 real estate companies in the city announcing that space is available for rent. The letters state that "priority will be given to agencies or companies with functional compatibility between school and tenant programs."

According to school documents, officials will consider "the needs of the particular community . . . to be affected by the occupancy" of schools, and a community meeting will be required before leases with noneducational businesses are made final. The documents state that top consideration will be given to businesses and organizations that can provide "direct support" to students and "enhance learning experience for children [e.g., day care centers, public college programs and job or employment counseling centers] ."

Currently, about 20 nonprofit organizations, churches and small businesses pay user fees of up to $4,500 a month for short term use of space in city schools where enrollments have shrunk to as much as 70 percent below capacity, Johnson said.

Delabian Rice-Thurston, executive director of Parents United for the D.C. Public Schools, favors the leasing of vacant classrooms. "Parents do not want schools in their neighborhoods closed, and they would rather see a neighborhood activity taking up space than see the schools closed." School officials have been reluctant to make the politically unpopular decision of closing schools.

Leasing vacant space in schools "is a way to use public space for the benefit of the community -- provided that space does not detract from the educational programs that are taking place in the schools," said Gary Marx, associate executive director of the American Association of School Administrators. Marx noted that several cities have launched leasing programs and that "in the future, with the growing number of women entering the work force," there could be a proliferation of day care centers housed in urban schools.

Daniel Wright, special assistant in the schools' management services division, recently investigated the way space is being used in 27 school buildings with enrollments that are at least 50 percent beneath their capacities.

"Some schools have so many empty classrooms that teachers are using them as private offices," Wright said. One entire school building, the vacant Nichols Avenue School, located in Anacostia, is available for lease, he said. Officials are asking $66,900 a year for the building, he said.

"We're now in the process of determining how our space is being used and what changes we can make to create maximum space in each school," Wright said. "If classes in a half-empty building are spread out, we might move all the classes together in one half of the building and use the other half for rental space."