Committee Chairperson Uemura detailed that the Committee adopted a work plan and timeline for at its August 15, 2019 meeting and the Department presented a draft policy at its September 19, 2019 meeting in accordance with this timeline. Committee members provided comments and asked the Department to present a revised policy at its October 3, 2019 meeting. He stated that the next task on the timeline is for the Department to present a draft repair and maintenance (“R&M”) priority list and a draft Capital Improvement Program (“CIP”) execution criteria. He noted that this is scheduled to occur at the Committee’s November 21, 2019 meeting.
Committee Chairperson Uemura noted that the Department is not ready to present its policy at the meeting today but he does not want to fall behind on the timeline. He tasked Committee Vice Chairperson Bruce Voss to work on revising the policy and the Department to work on a draft R&M priority list and CIP execution criteria. He stated that the Department would present all elements at the Committee’s November 21, 2019 meeting. Committee Chairperson Uemura noted that reviewing all three elements as a package would be helpful in developing a clear and useful policy.
IV. Recommendation for Action
Committee Chairperson Uemura asked how HSPLS determined its requests and whether HSPLS included any of its requests in its biennium budget. Fujitani confirmed that several requests are new and several are additional funding requests, such as its request for collections.
Committee Vice Chairperson Voss asked about HSPLS’s $1 million request for security services. He asked if security incidences were attributable to populations experiencing homelessness or conflict within libraries. Fujitani stated that it is difficult to determine whether incidences are attributable to homelessness or mental instability.
Committee Vice Chairperson Voss asked about HSPLS’s expenditure plan for security services. Fujitani explained that HSPLS currently employs security attendants who circulate libraries to ensure that there is no damage to property. HSPLS’s plan is to employ uniformed officers in some locations if the Legislature approves additional funding for security services.
Committee Vice Chairperson Voss expressed concern regarding HSPLS’s declining special funds revenue and asked if its $250,000 request for library collections is sufficient. Fujitani explained that HSPLS is attempting to reach a $3 million base budget for collections. HSPLS’s current base is $750,000. She explained that HSPLS’s supplemental budget increases its base to $1 million and it plans to request $2 million in the next biennium. She noted that HSPLS is trying to slowly increase its budget so that it is sustainable.
Committee Vice Chairperson Voss asked about wants versus needs. Fujitani confirmed that HSPLS needs more than $250,000 because it spends $3 million for collections on average. She stated that its requests and revenue are sufficient. Committee Vice Chairperson Voss asked about HSPLS’s needs. Fujitani stated that HSPLS would need an additional $2, 250,000 in funding for collections because its base is currently at $750,000.
Committee Member Nolan Kawano commented on HSPLS’s R&M backlog. He asked if HSPLS would need to spend $15,000 on design costs for each project or if $15,000 is the minimum design amount. Fujitani stated that she would need to provide this information at a later time. Committee Member Kawano stated that HSPLS’s amounts are overstated if it includes minimum design amounts versus actual costs. He noted that HSPLS lists construction costs as $300 for some projects but design costs as $15,000. Fujitani stated that HSPLS provided rough estimates and explained that costs might be higher for designs. She detailed that equipment for fire alarm systems, for example, is inexpensive but the design of electrical systems might be more expensive. She stated that HSPLS would review its amounts and provide information to the Committee at a later time.
Committee Chairperson Uemura asked if HSPLS conducted any studies to determine its budget request for security services. Stacie Kaneshige, Public Libraries Branch, Hawaii State Public Library System, detailed that HSPLS reviewed incidences across the state, including frequency, intensity, security reports, and damage reports, and received input from current security attendants. She explained that incidences tend to occur after closing hours. Kaneshige detailed that HSPLS learned that libraries within the urban core need a higher level expertise and HSPLS worked with contractors to determine how to ensure its spaces are safe.
Committee Chairperson Uemura asked if HSPLS is using its current contractor to determine necessary services and additional funding costs. Kaneshige noted that HSPLS approached the Sheriff’s Office but the cost was too high. She explained that the contractor calculated the amount based on locations, hours, and time of day.
Committee Chairperson Uemura expressed concern regarding whether $1 million is adequate and asked about procurement. Fujitani stated that HSPLS plans to issue a request for proposal and expects additional security services to cost $1.6 million, which includes its request from the previous year. She stated that the cost for additional security officers, including the Sheriff’s Office, amounts to $2.7 million. Committee Chairperson Uemura asked if security officers carry weapons. Fujitani confirmed that they do if it is necessary. She detailed that incidences have included physical damage and assaults against patrons.
Committee Chairperson Uemura asked about funding for R&M. Fujitani stated that HSPLS expects to expend $1 million from its base budget and further expend any savings it has at the end of the fiscal year. She stated that an additional $500,000 would help HSPLS fund interior renovations that it cannot fund with CIP funds, such as flooring replacement, furniture, and facility upgrades.
Committee Chairperson Uemura asked how $1.5 million would affect HSPLS’s backlog and asked for more detail regarding HSPLS’s backlog, including how HSPLS plans to expend $1.5 million. Fujitani explained that HSPLS receives a list from the Department of Accounting and General Services (“DAGS”). She noted that DAGS recommends $7.7 million for repairs. However, HSPLS cannot implement $7.7 million simultaneously.
Committee Chairperson Uemura commented that resources, personnel, and management appear to be challenges. He asked if $1.5 million would cover HSPLS’s priorities. Kaneshige stated that $1.5 million might not cover all of HSPLS’s priorities but HSPLS plans to request additional money in the next biennium. She noted that $1.5 million would cover projects that affect services. Fujitani noted that damage might occur throughout the year that stalls HSPLS’s R&M list. She stated that there was damage to the iron gates at Aiea Library and HSPLS is working with DAGS to determine how to conduct repairs. She stated that occurrences such as these take precedent over the R&M list.
Committee Chairperson Uemura stated that he wanted to ensure that $1.5 million covers safety and health concerns. He noted that HSPLS should request funds for areas that are in need of immediate repairs and that affect the health and safety of patrons and employees. Kaneshige confirmed that HSPLS maintains its facilities so that facilities are healthy and safe for patrons and employees. She noted that unforeseen issues cause delays in moving forward on HSPLS’s R&M list. Fujitani emphasized that HSPLS’s highest priority is health and safety. She noted that HSPLS redirects funds to address health and safety concerns when issues arise.
Committee Chairperson Uemura stated that it is unclear how HSPLS plans to expend CIP funds. He asked if there are appropriations that HSPLS allotted but did not spend and what the status is of current funds. Fujitani noted that HSPLS has moved forward on a dozen projects in the last few weeks and stated that HSPLS could provide the Committee with more details regarding status of funds and planned expenditures.
ACTION: Motion to approve the Hawaii State Public Library System’s supplemental budget for Fiscal Year 2020-2021 as described in the Hawaii State Public Library System’s memorandum dated October 3, 2019 (Namauʻu/Payne). The motion carried unanimously with all members present voting aye.
Committee Vice Chairperson Voss moved to approve the Department’s supplemental operating budget for the 2020-2021 fiscal year as described in the Department’s memorandum dated October 3, 2019. Committee Member Kili Namauʻu seconded.
Committee Chairperson Uemura commented that the Department of Budget and Finance (“B&F”) set a due date for supplemental budget submittals and granted the Department an extension until Monday, October 7, 2019, to transmit its Board-approved supplemental operating budget request. He stated that the Department’s memorandum does not explain why the Department did not present its request for Board review and approval at the Committee’s September 19, 2019 meeting. He noted that there is a process in place to ensure compliance with due dates.
Committee Chairperson Uemura stated that it would be helpful for the Department to explain how it determined additional fund amounts. He noted that the Committee adopted the Committee on Weights XI recommendation regarding the Weighted Student Formula (“WSF”), including $13.2 million in additional funds to support English learner and homeless students. He noted that the Department should have described its request of $27.7 million as a new request in its memorandum and explained that the Department resubmitted this request because it did not receive it in the biennium budget. He stated that these explanations would help the Committee to effectively discuss the Department’s requests and recommendations.
Committee Chairperson Uemura stated that the Department listed financial adequacy as one of its key issues and noted ongoing concerns regarding the inadequacy of WSF funding. He expressed concern that the Department did not thoroughly explain adequacy or provide amounts. The Department also did not thoroughly describe the how a lack of operating funds would negatively impact the Department’s strategic goals and priorities. Committee Chairperson Uemura emphasized that it is important for the Department to explain its reasoning and potential impacts to support its request.
Committee Vice Chairperson Voss noted that the Department requested two permanent positions for youth suicide awareness and prevention and $979,012 in supplemental funds. The Department also requested three permanent positions for school-level leadership development and capacity building and $769,545 in supplemental funds. He stated that the Department would need to better explain how it would use funds to further its priorities and expressed concern that the Department did not list any additional funds it would need for these two programs.
Brian Hallett, Interim Assistant Superintendent and Chief Financial Officer, Office of Fiscal Services, explained that the Department would hire a Behavior Specialist IV and an Office Assistant IV for youth suicide awareness and prevention. He noted that the supplemental request includes salary costs as well as additional expenses, such as $220,000 for professional development courses, $110,000 for classroom supplies, $25,000 for printing and licensing, and so forth. He stated that the Department provides these details to the Legislature. Heidi Armstrong, Assistant Superintendent, Office of Student Support Services, detailed that the Department’s supplemental budget request includes training costs, including materials, printing, and supplies. She stated that the Department could provide the Committee with a breakdown of these costs.
Committee Vice Chairperson Voss expressed concern that the Department does not provide the Committee with detailed materials. He stated that the Department provides lump sums but does not explain how it plans to spend funding for new initiatives beyond personnel costs.
Committee Member Kawano asked about consulting contracts. Armstrong explained that the Department’s funding for youth suicide awareness and prevention would go toward personnel, materials, and training. Committee Member Kawano asked about the costs of training. Armstrong detailed that training might cost $400,000. She explained that the Department might purchase programs that already exist. Committee Member Kawano asked about ongoing costs and initial costs for youth suicide awareness and prevention. Armstrong stated that she could provide the Committee with a breakdown. She explained that the Department would need to provide statewide training in the first year and refresher courses in subsequent years. Committee Member Kawano asked if the Department would purchase existing programs or use a consultant. He asked if the Department would use half of $979,012 in the initial year. Armstrong detailed that the Department would use a large portion of funding for initial start-up costs.
Committee Vice Chairperson Voss asked about additional expenses for school-level leadership development and capacity building. Hallett noted that the Department plans to hire educational specialists. He detailed that the lump sum request includes $40,000 for substitute teachers, $400,000 for educators, $200,000 for transportation, and $100,000 for other expenses.
Committee Member Catherine Payne asked if the Department plans to spend funding on coaching. She noted that the Department made a commitment to coach new teachers and hires. Cynthia Covell, Assistant Superintendent, Office of Talent Management, explained that the Department is requesting three positions within the Leadership Institute. She noted that the Department’s request includes coaching, travel, and training.
Committee Vice Chairperson Voss asked about the Department’s request of $1.5 million for complex areas to implement the strategic plan. Hallett explained that the Department received input from complex areas and noted that each complex area has varying needs. He detailed that the Department distributes operational funds to complex areas similar to how it distributes WSF funds to schools and complex areas determine how to utilize those funds. The Department’s intent is to use the $1.5 million to provide each complex area with $100,000, which is the cost of an educational officer. He noted that the Department would distribute by base funding to provide each complex area with an equal amount to enhance their work to support schools. Committee Vice Chairperson Voss stated that the Department would need to provide the Legislature with specific details, justify its requests, explain why its requests are important, and improve how the Department articulates its reasoning.
Committee Chairperson Uemura commented that some complex areas might need more than $100,000 while others might need less depending on needs and how complex areas plan to utilize the funding. He emphasized the importance of the Department supporting complex areas but noted that the Department would need to provide more detail for the Legislature to support its requests.
Committee Chairperson Uemura asked about electric utilities cost adjustment charges. Hallett detailed that the Legislature did not approve the Department’s request for utility funds during the last legislative session. He explained that the Department based its request on the Legislature’s funding formula, which the Legislature put into place to allow the Department to invest in alternate energy. He stated that the Legislature did not match its funding formula or basis for funding so the Department would need to re-submit its request in its supplemental operating budget. Committee Chairperson Uemura asked about the Department’s justification. Hallett explained that the Department is working with partners who support alternative energy and communicating the importance of sustainability. Christine Shaw, Interim Assistant Superintendent, Office of School Facilities and Support Services, highlighted that the Department is continuing alternative energy efforts. She noted that there are simultaneous increases and savings. Committee Chairperson Uemura asked about the Legislature’s message. Hallett stated that the Legislature is sending mixed message and the Department is seeking clarity on the Legislature’s policy positions.
Committee Chairperson Uemura asked about full-time permanent positions and costs. Hallett detailed positions counts and examples. He noted that he does not have an exact amount.
Committee Chairperson Uemura asked about recurring costs for the financial management system (“FMS”) replacement. He noted that the Department removed this request from its previous budget. He emphasized the importance of a new FMS system but noted that the Department is requesting maintenance funds for a system that is not yet in place. He stated that the Department did not include funds in its CIP requests and asked about the Department’s approach. Hallett explained that the Department is reviewing software services, lower entrance costs, and leasing. He detailed that $3 million is the annual cost for the Department to continue licensing for the service.
Committee Chairperson Uemura commented that the Department listed annual maintenance costs versus software costs. David Brookshire “Brook” Conner, Assistant Superintendent and Chief Information Officer, Office of Information Technology Services, explained that the Department’s request includes the annual cost for access to the system on a recurring basis. He described how agencies purchase enterprise software systems and explained that the Department based its estimate on input from a consultant.
Committee Chairperson Uemura asked if the Department’s purchase is similar to a lease. Conner confirmed that it is similar to a lease. Committee Chairperson Uemura asked if the Department plans to spend operational funds rather than CIP funds. Conner confirmed that this is the Department’s plan. Committee Chairperson Uemura stated that he would like to better understand the Department’s process and $3 million request. He emphasized the importance of a new FMS system but noted that he would like more detail regarding the process, scope, and the Department’s needs. He stated that he would consider whether a special meeting would be appropriate to address these questions and receive an update. He stated that the Department should earmark $3 million in its budget moving forward.
Committee Member Kawano asked if the Department’s approach would reduce costs. Conner explained that the Department’s approach would reduce indirect costs. He described the current state of the FMS system and noted that the Department does not pay licensing costs or direct costs because it is completely custom. He stated that the Department expects substantial organizational savings in terms of time and effort for employees processing finances.
Committee Vice Chairperson Voss asked whether the Department conducted a study to determine whether it should contract security services or hire individuals for certain schools. He asked how the Department plans to spend $1 million for security services. Shaw explained that the Department has similar needs as HSPLS in terms of security and noted that many schools experience after-hours incidences. Shaw stated that the Department has not conducted a study but plans to contract security for night patrols and day patrols.
Christina Kishimoto, Superintendent, noted that the Department provided the Board with a report at the end of the previous school year concerning incidences, such as homeless encampments and drug paraphernalia. She stated that the Department had a short-term contract at the end of the previous school year because incidences significantly increased. The Department used that internal short study to develop a transition plan for this year into next year and has been monitoring incidences and working with homeless liaisons and other agencies to review holistic approaches. She explained that the Department plans to use $1 million to provide services in high need areas and track ongoing incidences. She stated that she could provide the Committee with additional information regarding incidences at specific schools and locations.
Committee Vice Chairperson Voss asked if security services would be an ongoing expense for the Department and stated that the Legislature would ask about the Department’s plan. He expressed concern regarding uncontrolled and increasing expenditures. Kishimoto stated that the Department has relayed concerns to the Legislature regarding understaffing, safety, and security. She noted that issues appear to be escalating and the Department is assessing safety and security needs for each school. She stated that the Department plans to continue assessments. Kishimoto detailed that the Department would need to make adjustments to continue to respond to incidences and is working on a comprehensive plan. She stated that the Department is reviewing whether trends are continuing and whether the Department would need additional funds for security in future years.
Committee Vice Chairperson Voss asked about the Department’s next steps. Kishimoto stated that the Department is taking steps to address imminent needs while determining long-term plans.
Committee Chairperson Uemura emphasized that the Department would need to provide additional detail in future memorandums and highlight areas of focus. He stated that Committee members are most interested in how the Department’s requests affect strategic goals and priorities.
ACTION: Motion to approve the Department’s supplemental operating budget request for Fiscal Year 2020-2021 as described in the Department’s memorandum dated October 3, 2019 (Voss/Namauʻu). The motion carried unanimously with all members present voting aye.
Committee Chairperson Uemura stated that the purpose of materials and memorandums are for the Department to provide the Committee with sufficient information. He stated that the Committee would need additional information to make an informed decision, such as how the Department determined its funding requests, explanations accompanying footnotes, the role of the Facilities Master Plan Guide, and so forth. He noted that the Department issued the Facilities Master Plan Guide in 2019 but has not yet presented to the Committee. The Department will receive the Committee’s input in the future to determine how to use the guide to develop a facilities master plan. Committee Chairperson Uemura expressed concern that the Department’s description of financial impacts does not address how the Department would be negatively affected if it were to not receive additional funds. He stated that the Committee would need to know how requests affect strategic goals and priorities and allocation plans.
Committee Chairperson Uemura asked about the term “acknowledges” in the Department’s memorandum. John Chung, Public Works Manager, Project Management Section, Office of School Facilities and Support Services, explained that the Department reviewed its requests and identified all requests under instruction and support categories for schools designated as Title I. He highlighted that the Department focused on Title I schools in its planning process and requests.
Committee Chairperson Uemura asked if the Department’s requests would align with its priority list related to the working group tasked with ensuring that Board policies and structures enable the Department to complete all facilities projects at its schools with the greatest socioeconomic and academic needs as determined by an equity priority order. He emphasized the importance of alignment between policies and budget. Chung confirmed that the requests and priority lists would be similar. He stated that the Board has not adopted a policy related to socioeconomic needs but the Department foresees that its budget will align with the intent of the policy. He stated that the policy would provide the Department with direction regarding how to prioritize different Title I schools.
Committee Chairperson Uemura commented that equitable does not refer to solely focusing on Title I schools. Chung explained that the Department has discussed how to ensure equity for all schools. He stated that Title I schools might have preference but the Department would need to address needs in other schools as well. He noted that preference refers to program support and capacity independent of socioeconomic needs. He stated that the Department would need to address needs regardless of school status.
Committee Chairperson Uemura asked if the Department used the Facilities Master Plan Guide to develop its supplemental budget. Chung explained that the Department is in the process of reviewing how to incorporate the guide into its budget process.
Committee Chairperson Uemura commented that the Department listed lump sum appropriations and asked for the Department to provide the Committee with categorized Act 40 appropriations. Chung confirmed that the Department could provide the Committee with this information.
Committee Chairperson Uemura asked about impact fee funds. Chung explained that the Department would need legislative approval. He further explained that the Department’s request to use impact fee funds would fall under its general fund operating budget rather than its CIP budget. He stated that the Department is working with counties to determine how the process works and reviewing capacity projects. He stated that the Department is considering whether to request the use of impact fee funds for a capacity project at Kapolei High School.
Committee Chairperson Uemura asked about fair share funds. Chung detailed how the Department uses fair share funds, including portions of total available fair share funds.
Committee Vice Chairperson Voss asked about specific projects, including nine gymnasiums. Chung explained that gymnasiums serve as shelters in areas where there are no emergency facilities. He explained that gymnasiums are necessary to support programs and ensure that students are able to complete high school graduation requirements. Chung detailed that some projects are legislative add-ons while others are Department needs. He explained that it gymnasium projects might cost more than the Department budgeted and the Department anticipates shortfalls which is why it included additional requests in its supplemental budget.
Committee Vice Chairperson Voss emphasized the importance of the Department clearly articulating why some projects receive priorities over others. He stated that the Department would need to thoroughly justify its request to the Legislature and public. Chung agreed with Committee Vice Chairperson Voss and highlighted that the Department is refining its processes and reviewing the bigger pictures. He stated that the Department focuses on multiple areas and balances needs so that programs are not in jeopardy.
Committee Member Kawano asked about the Department’s ten-year plan to address Title IX. Chung stated that the Department’s plan has evolved. Committee Member Kawano asked if the Department incorporated this plan into its budget. Chung confirmed that the Department contemplated its ten-year plan within its budget. He stated that he could provide the Committee with additional information.
Committee Member Kawano asked about requests related to housing. Chung stated that the Department anticipates population increases and has opportunities to provide additional capacity.
Committee Vice Chairperson Voss asked about Pohukaina Elementary School. He asked if the Department plans to build a school if market conditions change and residential development does not move forward. Chung highlighted the Department’s opportunity to obtain land in the urban core. He stated that the Department would have challenges providing additional resources if it loses this opportunity.
Committee Vice Chairperson Voss commented that there is a level of uncertainty regarding residential development. He asked about the Department’s next steps if developers abandon the real estate project. Chung stated that the Department plans to move forward with Pohukaina Elementary School regardless of residential development. Committee Vice Chairperson commented that the two projects might be in conjunction with one another. Chung stated that he could provide the Committee with additional detail but the Department’s understanding is that it could move forward with Pohukaina Elementary School regardless of the real estate projects. Committee Chairperson Uemura commented that the Department requested funding for construction and there might be issues if the Legislature does not approve the request.
Committee Chairperson Uemura asked about the Department’s consultant contracts. He expressed concern that the Department did not explain why it needs consultants, scope of work, deliverables, or how it determined the amount. He emphasized the importance of the Department properly managing contracts and highlighted that the Department would need to provide consultants with a scope of work and deliverables. Committee Chairperson Uemura asked for assurances. Chung detailed the history of educational specifications. He noted that the Department is understaffed and does not have the expertise to update educational specifications. The Department needs a consultant with subject matter expertise. Chung stated that the Department could provide additional detail regarding scope of work.
Committee Chairperson Uemura emphasized the importance of a cost analysis and stated that he would like to understand how the Department determined a request of $500,000. He stated that he would like information regarding how the Department plans to manage consultant contracts and ensure that the cost does not expand. Kishimoto stated that the Department would not move forward with these expenditures until it provided the Committee with additional detail to ensure that the cost does not escalate.
Committee Member Kawano expressed concern that the Department would not update facilities using educational specifications because it has many other areas to address, such as Title IX compliance and its R&M backlog. Chung explained that the Department uses educational specifications intermittently with all of its projects. He explained that educational specifications provide the basis for design. Chung stated that the Department is unable to provide students with the best facilities if it does not move forward on comprehensively updated educational specifications.
Committee Member Kawano suggested that the Department update educational specifications for specific projects. Chung detailed challenges and the importance of the Department updating educational specifications. He stated that the Department could review its needs for the immediate future and conduct incremental updates. He stated that eventually the Department would like to update educational specifications on a large scale rather than on a project by project basis.
Committee Chairperson Uemura asked about the facilities master plan. Chung stated that the facilities master plan and educational specifications are related. He stated that the facilities master plan identifies needs and educational specifications are necessary when projects come to fruition. Committee Chairperson Uemura asked about studies. Chung stated that the Department updated its educational specifications in 2008. He explained that the Department is relying on consultants because it is experiencing challenges hiring someone with expertise.
Committee Chairperson Uemura stated that the Department is not to expend funds related to consultant contracts until the Department provides the Committee with additional information.
ACTION: Motion to approve the Department’s supplemental capital improvement projects budget for Fiscal Year 2020-2021 as described in the Department’s memorandum dated October 3, 2019 (Voss/Kawano). The motion carried unanimously with all members present voting aye.
V. Adjournment
Committee Chairperson Uemura adjourned the meeting at 12:31 p.m.