November 19, 2020

STATE OF HAWAII
BOARD OF EDUCATION
HUMAN RESOURCES COMMITTEE

MINUTES

Thursday, November 19, 2020
*The Board did not meet at a physical location. As part of the response to the threat of COVID-19, Governor David Ige issued a Fourteenth Supplementary Proclamation dated October 13, 2020, suspending Hawaii Revised Statutes Chapter 92, Public Agency Meetings and Records, to the extent necessary to enable boards as defined in Section 92-2, to conduct meetings without any board members or members of the public physically present in the same location, among other things.

PRESENT:
Dwight Takeno, Chairperson
Kaimana Barcarse, Vice Chairperson
Lynn Fallin
Kili Namauʻu
Catherine Payne
Kenneth Uemura
Bruce Voss

EXCUSED:
Margaret Cox

ALSO PRESENT:
Christina Kishimoto, Superintendent
Cynthia Covell, Assistant Superintendent, Office of Talent Management
Alison Kunishige, Executive Director
Kenyon Tam, Board Analyst
Regina Pascua, Executive Secretary

I. Call to Order

Committee Chairperson Dwight Takeno called the Human Resources Committee Meeting to order at 9:31 a.m.

II. Public testimony on Human Resources Committee (“Committee”) agenda items

Committee Chairperson Takeno called for public testimony. The following people provided remote oral testimony.

Name	Organization	Agenda Item	Position
David Miyashiro	HawaiiKidsCAN	IV.A. Presentation on Department of Education’s reorganization plan to preserve classroom instruction: temporary or permanent closure, consolidations, reorganization, restructuring, or merger of offices, programs, services, and positions	Comment
Cheri Nakamura	HE‘E Coalition	IV.A. Presentation on Department of Education’s reorganization plan to preserve classroom instruction: temporary or permanent closure, consolidations, reorganization, restructuring, or merger of offices, programs, services, and positions	Comment

David Miyashiro, HawaiiKidsCAN, testified on the presentation of the Department of Education’s (“Department”) reorganization plan to preserve classroom instruction. He urged the Department to be transparent and noted that the Department’s memorandum falls short. He highlighted various suggestions for grounding spending decisions in evidence-based practices.

Cheri Nakamura, HE‘E Coalition, testified on the presentation of the Department’s reorganization plan to preserve classroom instruction. She stated that the HE‘E Coalition strongly agrees with the Department’s first starting principle of protecting the core mission of teaching and learning. She stated that this means prioritizing curriculum, instruction, assessments, and response to intervention. Nakamura stated that stakeholders should know how reductions would affect students.

Committee members received written testimony. The following is a listing of the people who submitted written testimony before the meeting.

Name	Organization	Agenda Item	Position
Cheri Nakamura	HE‘E Coalition	IV.A. Presentation on Department of Education’s reorganization plan to preserve classroom instruction: temporary or permanent closure, consolidations, reorganization, restructuring, or merger of offices, programs, services, and positions	Comment
David Miyashiro Alex Harris Naiya Lim Kiana Ejercito Tina Huynh-Nguyen Elena Farden Noriko O’Shea Lana Lubecke Ann Keeler Kaʻinoa Kea Phoenix Maimiti Valentine Aisha Heredia Terry George Donna R. Walker Lillian Coltin Tiffany Huynh Shirley M. Yamauchi Ac’Lynne Uesugi Kent Uyehara Lauren Watanabe Cade Watanabe Liz Sager	Collection of community members	IV.A. Presentation on Department of Education’s reorganization plan to preserve classroom instruction: temporary or permanent closure, consolidations, reorganization, restructuring, or merger of offices, programs, services, and positions	Comment

III. Approval of Meeting Minutes of June 18, 2020

Committee Chairperson Takeno asked Committee members to review the minutes of the Committee’s June 18, 2020 meeting.

Committee Member Kenneth Uemura moved to approve the Committee’s meeting minutes of June 18, 2020. Committee Vice Chairperson Kaimana Barcarse seconded.

Committee Chairperson Takeno called for a roll call vote on the motion. The motion carried with Committee Vice Chairperson Barcarse and Committee Members Kili Namauʻu, Catherine Payne, Uemura, and Bruce Voss voting aye, and Committee Member Lynn Fallin abstaining.

ACTION: Motion to approve the Human Resources Committee Meeting minutes of June 18, 2020 (Uemura/Barcarse). The motion carried with five ayes and one abstention.

IV. Discussion Items

Presentation on Department of Education’s reorganization plan to preserve classroom instruction: temporary or permanent closure, consolidations, reorganization, restructuring, or merger of offices, programs, services, and positions

Committee Chairperson Takeno called on Cynthia Covell, Assistant Superintendent, Office of Talent Management, to present the Department of Education’s (“Department”) reorganization plan to preserve classroom instruction. Covell introduced Christina Kishimoto, Superintendent, to provide the key points.

Kishimoto stated that she has heard from the public that more detail is needed and that she is planning on sharing more detail over the next few weeks and months. She detailed that the Finance and Infrastructure Committee will take on the Department’s budget conversation at its meeting scheduled for December 3, 2020, which will include a lot of the details coming out of the process engaged in and core assumptions of protecting quality instruction and teacher school leader capacity to deliver on the work and deliver on it well. After this, the Department will submit its budget to the Governor and a lot of the work will happen after the Department gets feedback from the Governor’s team. Kishimoto asked the public to stay engaged. The Department has the largest share of the state budget and will be at the center of these budget conversations. 94% of the Department’s budget is in schools or services that go directly to students (like food services and student transportation), 5% of the budget is at the state level and 1% at complex area level. Kishimoto clarified that when she talks about a budget reduction of 10-20%, the lions share will be felt at the school level since that is where most of the budget is, but that she will work to minimize the impact to the school level to the greatest extent possible by putting things on hold or eliminating things in a way that does not decimate the overall instructional approach. Kishimoto went on to stated that the Department has 13,000 state office employees and that both the state and complex area levels are pretty streamlined and there are not a lot of extra positions at the state level. Kishimoto stated that at the December 3, 2020 Human Resources Committee meeting, she will present the number of state office full time employees (“FTE”) that are actually at the school level because not all state office employees are in a state office as many are providing direct services to students and are assigned to schools. In Hawaii, the Department serves as both the State Educational Agency (“SEA”) and Local Education Agency (“LEA”), so it can look at what is being done beyond mandatory state level work and cut back on that. Kishimoto also clarified her thinking when looking at the potential for reorganizing. She detailed that there are two parts to the Governor’s mitigation approach, a program review to reduce the budget by 10-20% and furloughs. In December, Kishimoto stated that she will present the Department’s budget to the Board within the context of what the Governor asked her to provide, but that there still must be advocacy for instructional quality. Kishimoto also explained that the Department is carrying an additional impact that the other state agencies are not because it has been advised that there will be a permanent cut $100 million cut to its base budget. Kishimoto stressed that it is important for the public to understand that this means that there is actually a 20-24% impact on the Department’s operating budget, which places extraordinary pressure on school system to deliver quality education with these cuts. The Department’s budget mitigation approach focuses on six areas across the board at the school, complex, and state levels (permanent program eliminations or consolidations, replacement practices, reprioritization of programs, temporary eliminations or reductions of essential programs, staffing reductions/position freezes, and proposed areas for government efficiencies). As part of its process, the Department formed three subcommittees across the tri-levels (Instruction and Equity, Business Function Efficiencies, and School Level Efficiencies), which were designed to align with the seven areas covered by the assistant superintendents (Student Support Services; Information Technology Services; Talent Management; Fiscal Services; Strategy, Innovation and Performance; Facilities and Operations; and Curriculum and Instructional Design). All of this work was merged into a budget proposal that will go to the Board in December. Kishimoto stated that everyone started with 10% cut then reviewed external contracts keeping in mind three primary areas to protect: developing an e-learning system, replacing the Financial Management System (“FMS”) and ensuring the safety and security budget is funded at a sufficient level. She stated that the Department’s budget proposal will generate reorganization plans and impact its staffing model. Kishimoto stated that Cynthia Covell, Assistant Superintendent, Office of Talent Management is creating cohesive reorganization plan to present to the Board that will compliment the budget plan that will go to the Board in December.

Covell stated that Kishimoto covered the key points and what the Department has been doing. She clarified that the subcommittees were very valuable because they were led by complex area superintendents (“CAS”) who provided a view of the budget outside of the state level. The Instruction and Equity subcommittee looked at equity at the school level and instruction practices. The School Level Functions Subcommittee looked at the budget from the complex and school perspective and examined how the state level provides the services. Covell stated that after the Department’s operating budget is in place, the Department will develop reorganization plans and present them to the Board.

Committee Chairperson Takeno asked committee members if they had any questions.

Committee Member Catherine Payne asked whether potential cuts to the Department’s budget could be as high as 25%. Kishimoto stated that when all of the cuts are layered on, including the potential 20% cut and the $100 million bas budget cut, there is potentially a 24% budget cut. She stated that she does not recommend accepting these cuts because they are untenable. Committee Member Payne agreed that these budget cuts at this level will devastate public education system and that the Department needs a robust plan to make sure the public knows what will happen if these cuts are made.

Committee Member Bruce Voss stated that the work presented to the Committee is an important, but initial step because the Department’s budget will still need to go to the Governor and legislature. The Department will not know what the cuts will be until May 2021, so what will the Department do between January and July to implement the cuts that are necessary? Covell stated that the Office of Talent Management typically works through the principals and their academic-financial plan process by using the academic-financial plan and staffing reductions based on student enrollment. The Department’s standard process is to bring a Reduction in Force (“RIF”) plan to the Committee in March to initiate the notification process; the RIF plan will take effect July 1^st. Covell detailed that the Department is starting its pre-planning work and will continue through March, depending on how conversations about the budget progress and whether the Department can get more funding to support keeping the programs and positions.

Kishimoto added that the other important element is the conversations that have to happen in person from January to March with legislative leaders, and in particular where Board Members need to meet with legislators on impacts of these budget cuts. The Department is planning a set of public meetings to keep the public informed and will hold public webinars to inform the public of what the Department has been told and any budget adjustments. She stated that she has already scheduled meeting with non-profit organization and business leaders to make sure there is a collective understanding of budget cut impacts on the public education system.

Committee Member Voss commented that because the biggest percentage of the budget is at the school level, schools will experience large budget reductions. He inquired as to whether the schools will publish their academic-financial plans so that the public can see the impact of school level budget cuts, as requested in the testimony submitted by the Hui for Excellence in Education. Covell stated that she will look into the availability of the academic financial plans and clarified that the complex area superintendents collect these plans and submit a consolidated plan. She stated that she needed to get clarification on what is made public and whether the school level plans are made public or just the consolidate complex area plan. Committee Member Voss expressed his concern that the public will not appreciate the impact of these budget cuts on school schools unless they can see the impacts and that if the Department does not make school level academic-financial plans public, it should consider doing so.

Committee Member Lynn Fallin asked for examples of some of the areas schools are looking at regarding “proposed areas for government efficiencies,” the sixth area that the Department’s prioritized program reductions will identify. Covell stated that the subcommittees have recommendations like reducing some positions from full time to .75., which is not an effectiveness measure, but helps to save money in the least painful way. She emphasized that student achievement is primary and school ideas are bubbling up though the CAS and principals.

Committee Member Fallin asked whether any of the priorities identified by the superintendent, like the FMS, add value to the school and its ability to develop and expend its budget? Kishimoto stated that the value to schools is not immediate, but more long term because a new FMS system is replacing an out of date system that will require re-learning base practices. She stated that eventually the new FMS will increase effectiveness of budget planning and execution because schools will be able to share reports and drill down into the data. The Department is planning on going live with the new FMS on July 1^st and training employees during the summer and upcoming school year.

Committee Member Fallin underscored the importance of supporting schools and providing them with the information and capacity they need to expend money wisely to provide quality instruction and that it is extremely important that any administrative costs reflect how they support schools. Committee Member Fallin asked when the Department is going through the process of identifying programs and positions to cut, whether it is also reviewing processes and the roles and responsibilities of the state office and schools. Covell stated that the process looked at the business function and have looked at process through a review for duplication. She stated that when moving from paper to digital, they are also looking at whether they can do things better or stop doing things that are not high value.

Committee Member Fallin stated that when she was reviewing reports the Department submitted to the Legislature, one was related to special education and the maximization of Medicaid revenues. She inquired as to the Department’s progress on Medicaid revenues because the Department should look at opportunities for revenue in addition to program or position cuts.

Kishimoto stated that the Department reported on the Medicaid reimbursement approach and the Department’s system right before Committee Member Fallin joined the Board. Because Department’s Medicaid reimbursement system was not appropriately stood up, it could not maximize reimbursements. Heidi Armstrong, Assistant Superintendent Office of Student Support Services worked closely with Senator Michelle Kidani to expand staffing and set up the Department’s system. Initial reports were for small amounts of reimbursement of less than $100,000 as the Department stood up the system, but in the first year the Department collected over $1 million in reimbursements. The Department is in the process of adding other areas while working with the University of Massachusetts (“UMass”) and will continue to work on this revenue generation. Kishimoto expanded on the revenue generation question and mentioned maximizing and developing internal capacity to go after major public and private grants and also setting up business relationships in Hawaii. She also mentioned the long-standing conversation of revenue generation through Act 155, which the Legislature and FIC is interested in talking about.

Committee Member Fallin stated that she wants to avoid having the state use any revenue maximization to supplant money, but showing efforts to proactively avoid cuts is really beneficial. She asked whether the Department gets to keep the Medicaid reimbursements. Kishimoto stated that it does and that the Department provides an annual report of how these funds are repurposed, which is generally to support services for students to ensure those areas are fully funded.

Committee Member Namauʻu stated that besides extensive internal reviews, have the subcommittees focused on where can have cost savings. What does the community engagement piece include? Opportunities to dialogue with private sector and public. If opportunities to assist and evaluate and interact with leadership, they may have proposals to share with the Department and also see where there are gaps. What kind of community engagement has been done and if propose to do further and more. Believe the more the public understands and aware of how impacts students and specific schools, more people will get involved and be there to assist. Kishimoto stated that the work so far has been internal and there have been tri-level conversations about how to consider the major strategies. She stated that the Department will be transitioning from concept and idea generation by the tri-level to public input. Each step along the way, the strategies identified are either reinforcing strategies or approaches everyone is in agreement with. The Department will take its ideas to the public, starting with non-profit convening then business convening. What is generated will be submitted to the Governor. From January to March the Department will get more detailed feedback from the Legislature, then it can go back to the public with that and continue the conversation.

Committee Member Namauʻu asked whether this information would be provided as a part of the budget presentation in December. Kishimoto stated that the Department would present its tri-level budget and input from two public meetings. The Board would submit this budget to the Governor and get the Governor’s feedback before get into next level budget that is much more specific. Kishimoto stated that the Department would not get public input not ahead of the board presentation

Committee Member Barcarse expressed his support for Committee Member Voss’ request that school academic-financial plans be shared with the public. He stated that he heard a lot of businesses and organizations want to support schools, but they do not know how and sharing the schools’ academic-financial plans might be a good communication tool. Committee Member Barcarse asked whether the Department has requested specific help to cover shortfalls during these non-profit and business convenings and asked for more information on how families and other community members will be engaged in this public input process. Kishimoto clarified that the School Community Councils (“SCC”) have community representation and the SCCs meet publicly and post notes of their meetings. She stated that there are ways for the community to support schools and that it is important for the Department to specify ways the community can support schools. The business representatives that serve on SCCs are having tremendous impact on what is happening in schools and can be connections to other business leaders. Kishimoto stated that as she has gone through this crisis period, she has had several meetings about big policy questions and change process to make sure the Department comes out in a better place. She detailed that this change time period can be used to push these critical areas, which is different from a one off ask or item. Overall, how do we ensure a child in the public school system is guaranteed access to connectivity and what are the guaranties that come with equity? This is a question for the Legislature and all business partners.

Committee Member Barcarse encouraged Kishimoto to look for support at all levels, not just one because the answer to the issue lies at multiple levels. He also encouraged her to make specific asks when meeting with business sectors and urged her to ensure that school academic-financial plans are made public. Kishimoto stated that she will look into getting the school academic-financial plans posted to make sure the public has the next level of access to information about where the money is going, how it is being used, and the impact.

Committee Chairperson Takeno stated that at least from April 2020, the Governor warned all state agencies of COVID-19’s impact on government and it was apparent from the middle of this year that there would be significant budget shortfalls and reduced funds. He expressed his hope that by the December Committee meeting the Department will provide the status of any proposed plans for issues of permanent closures and provide all the information requested for this agenda item. Committee Chairperson Takeno detailed what this would include: ballpark estimates of how much the Department’s budget will be cut, and information on what expenditures the Department can reduce now. Simultaneously having conversations with unions. He stated that he would like the plan to anticipate a reduction in personnel costs through furloughs and also a back-up plan for what the Department will do if furloughs do not go through. He stated that he would like to see these scenarios and the Department’s plan to address these scenarios with specific recommendations and a detailed program review. The Department’s presentation said 94% of its budget is at the school level, 5% at the State Office level and 1% at the Complex Area Level, but the Department needs to review, explain, and justify every program and why they are needed during this time if they are being kept. He stated that the plan should look at how the Department can save money to preserve classroom instruction as much as possible. He asked whether the Department could provide this at the next Committee meeting. Covell stated that she could focus on actions at the state level and bring that to the Board, but the school financial-academic plans are not due until the end of December, so that information would not be available until January. Committee Chairperson Takeno asked whether the information on complex areas could also be presented in December. Covell said that the Department could present on state and complex area levels in December.

Committee Chairperson Takeno asked if there could be two scenarios in the plan, one with salary savings through furloughs and one without furloughs, but reflecting an additional 10% cut, which would be about the amount that the Department would expect to save with furloughs. He clarified that furloughs are not in the collective bargaining agreement, so it is not guaranteed; the only contractual option is a RIF. Covell stated that in order for a plan to reflect an additional 10% cut, schools would need to be included in the plan and that information would not be available until January. Committee Chairperson Takeno expressed his belief that the Department should be working on two scenarios, a worse case scenario and best case scenario because it should not be predicating its budget on non-guaranteed factors, like furloughs.
Kishimoto stated that the Department can produce these two scenarios from a financial and FTE perspective. She stated that she has looked at this from a financial perspective, but has not gone into programmatic modeling for those scenarios. If another 10% is cut from the budget, the Department would not be able to run its state or complex area offices. She stated that the Department can give the Committee what the scope would mean, but it would not be scoped out to the program level. Kishimoto also stated that the Department can present on the state office and complex area levels knowing the complex area level will have some shift as it changes what schools need for support.

Committee Chairperson Takeno stated that he really wants to see the programmatic recommendations so he can understand the impact to the operations. He asked whether the Department can provide a target, like a 20% reduction, then do a deep dive on the impact (like which positions would be RIF’d and who would assume the work of individuals who are RIF’d) and provide recommendations to mitigate impact (like closing or consolidation). Kishimoto stated that the Department can provide a very high level look, but that she would be very cautious about them being superintendent recommendations because that would cause panic and would be a leading story before the Department even knows where it is going. She respectfully asked that a plan would not be considered superintendent recommendations and that the Department be allowed to provide high level scope of impacts in areas. Kishimoto stated that the Department would need to look at school closures and consolidations and consolidation of administrative positions.

Committee Member Uemura stated that FIC will review the Department’s budget on December 3, 2020 and that he is concerned about the personnel plan and that what Committee Chairperson Takeno is requesting is the detail that will drive the financial plan. Without the foundation of a personnel plan to see how it impacts programs, he do not see how the Department can develop a budget with the necessary details for the Board to approve. He stated that he understands Kishimoto’s concerns, but public transparency is important to the Board. He emphasized that what Committee Chairperson Takeno is asking for is necessary to build the Department budget and if the Department is no presenting that on December 3, then he will consider taking the Department’s budget off the agenda because it will be a waste of time to consider it. Committee Member Voss also expressed his support for Committee Chairperson Takeno’s request because the Committee needs to understand programmatic impacts. Committee Chairperson Takeno stated that he will schedule a Committee meeting for December and that he believes that the Department understands what is being requested.

V. Recommendation for Action

Committee Action on compensation adjustments for Department of Education employees excluded from Bargaining Units 3 and 13

Committee Chairperson Takeno called on Covell to present the Department’s recommendation regarding compensation adjustments for Department employees excluded from Bargaining Units (“BU”) 3 and 13. Covell state that compensation adjustments for BU 3 and 13 expired in June 2019, went over previous related action and stated that 177 excluded employees are impacted by adjustment to salaries. She clarified that funding for these compensation adjustments are included in the Department’s collective bargaining appropriation. She recommended approval and upon approval the Department will adjust salaries.

Committee Member Fallin asked for clarification on the appropriation for the adjustments. Covell clarified that the Office of Collective Bargaining provided a lump sum amount, which included employees in BU 3 and 13 statewide.

Committee Vice Chairperson Barcarse moved to approve the compensation adjustments for Department employees excluded from HGEA Bargaining Units 3 and 13 as described in Superintendent Christina Kishimoto’s memorandum dated November 19, 2020. Committee Member Payne seconded.

Committee Chairperson Takeno called for a roll call vote on the motion. The motion carried unanimously with all Committee members present (Committee Vice Chairperson Barcarse, Committee Members Fallin, Namauʻu, Payne, Uemura, and Voss) voting aye.

ACTION: Motion to approve the compensation adjustments for Department employees excluded from HGEA Bargaining Units 3 and 13 as described in Superintendent Christina Kishimoto’s memorandum dated November 19, 2020 (Barcarse/Payne). The motion carried unanimously with all members present voting aye.

VI. Adjournment

Committee Chairperson Takeno adjourned the meeting at 11:00 a.m.