STATE OF HAWAII
BOARD OF EDUCATION
FINANCE AND INFRASTRUCTURE COMMITTEE

MINUTES

Queen Liliuokalani Building
1390 Miller Street, Room 404
Honolulu, Hawaii 96813
Thursday, November 21, 2019


PRESENT:
Kenneth Uemura, Committee Chairperson
Bruce Voss, Esq., Committee Vice Chairperson
Margaret Cox
Nolan Kawano
Kili Namauʻu
Catherine Payne

EXCUSED:
Brian De Lima, Esq.
Dwight Takeno

ALSO PRESENT:
Christina Kishimoto, Superintendent
Brian Hallett, Interim Assistant Superintendent and Chief Financial Officer, Office of Fiscal Services
John Chung, Public Works Manager, Project Management Section, Office of School Facilities and Support Services
Alison Kunishige, Executive Director
Regina Pascua, Board Private Secretary
Irina Dana, Secretary


I. Call to Order

The Finance and Infrastructure Committee (“Committee”) was called to order by Committee Chairperson Kenneth Uemura at 10:43 a.m.


II. *Public testimony on Finance and Infrastructure Committee (“Committee”) agenda items

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

Name
Organization
Agenda Item
Position
Barrett FrancisPuu Panini-Palekaua HuiIV.B. Update on status of implementation of Act 155 (Hawaii Revised Statutes Section 302A-1151.1, Pilot program for lease of public school land): status of community engagement efforts, status of due diligence, status of Requests for Proposals (“RFPs”), information on independent contractor, and status of Memorandum of Understanding with Hawaii Housing Finance & Development Corporation (“HHFDC”)Comment
Randall PortPuu Panini-Palekaua HuiIV.B. Update on status of implementation of Act 155 (Hawaii Revised Statutes Section 302A-1151.1, Pilot program for lease of public school land): status of community engagement efforts, status of due diligence, status of Requests for Proposals (“RFPs”), information on independent contractor, and status of Memorandum of Understanding with Hawaii Housing Finance & Development Corporation (“HHFDC”)Comment

Barrett Francis, Puu Panini-Palekaua Hui, testified on Act 155 and provided background information regarding two properties. He detailed the sensitivity of the area and its features and stated that he and other community members would like to be constructively engaged with the Department as it moves forward.

Randall Port, Puu Panini-Palekaua Hui, testified on Act 155 and the concerns of residential communities regarding development and the lack of community engagement efforts. He detailed that affected communities would like more information regarding development and emphasized the importance of the Department keeping communities informed to mitigate fears and anxieties.

Committee Chairperson Uemura assured that the Committee and Department of Education (“Department”) would engage communities prior to any decision-making regarding properties and development.


III. Approval of Meeting Minutes of October 3, 2019

ACTION: Motion to approve the Finance and Infrastructure Committee Meeting minutes of October 3, 2019 (Voss/Payne). The motion carried unanimously with all members present voting aye.
IV. Discussion Items Committee Chairperson Uemura asked Committee members to refer to their materials regarding the Department’s fiscal reports as of September 30, 2019.

Committee Vice Chairperson Bruce Voss commented that the Department’s materials indicate that federal and special fund cash balances will likely continue to decline within school food services. He asked about the Department’s next steps to ensure that the Department continues to fund this program through the fiscal year. Brian Hallett, Interim Assistant Superintendent and Chief Financial Officer, Office of Fiscal Services, stated that the Department plans to seek increases in federal reimbursement rates to alleviate the problem. He noted that funding is available this fiscal year but stated that the Department anticipates it will need to seek additional funds in future budget years if it is unable to receive increases in reimbursement rates. He stated that the Department does not anticipate food costs decreasing and noted that food costs are subject to inflation. He stated that the Department continues to monitor participation, reimbursement rates, and program expenditures.

Committee Vice Chairperson Voss asked about sources of funding. Hallett explained that the school food services program has three sources of funding, including general funds, federal reimbursements, and student payments. If the Department does not receive reimbursement increases its only other options are to increase lunch prices or seek additional funds from the Legislature. He noted that lunch price increases would negatively affect participation and is not a viable option. Seeking additional general fund support is the Department’s next best option.

Committee Member Nolan Kawano asked about the Department’s comparison to budget report, specifically current year expenditures versus available funds. He noted that with the exclusion of EDN 400, it appears as though the Department will have almost $30 million in salary savings. Hallett detailed the Department’s comparison to budget reports and noted that these reports are more useful in the second and third quarters. He stated that it is difficult to draw conclusions regarding what will occur during the fiscal year from these reports in the first quarter.

Committee Member Kawano asked about the Department’s repair and maintenance (“R&M”) backlog and whether the Department removes projects in the design phase from the R&M backlog. Committee Member Kawano commented that the R&M backlog increases if projects are in the design phase but not yet completed. John Chung, Public Works Manager, Project Management Section, Office of School Facilities and Support Services, explained that the Department adds projects to its backlog once it identifies projects. The Department’s next step is to move projects into the design phase. The Department removes projects from the R&M backlog once projects are in the design phase. Chung noted that there are complications if projects are in the design phase but the Department does not have available funds to complete the project. He explained that the Department had to restate its backlog to include these projects. Currently the R&M backlog accurately reflects projects waiting to be acted upon.

Committee Member Kawano commented that the Department has not completed projects in the design phase which means that issues still exist. Chung stated that it takes time to execute projects.

Committee Member Kawano asked about project timelines. Chung detailed that contracting phase design takes six months to one year. He noted that permitting can take more than six months. He detailed that construction is complicated because of vacation windows. The Department might extend construction by one year because it missed vacation windows. He noted that bidding can take one or two years and actual construction can take anywhere from six months to a year and a half. Committee Member Kawano commented that he anticipates the number of projects in the design phase to increase due to the Department’s timelines.

Committee Chairperson Uemura commented that the Department’s financial system requires the Department to estimate and prorate costs and the new financial system might not be in place for another year or longer. He asked if it makes sense for the Committee to review financial reports on a quarterly basis or if it would make more sense to review reports on a semi-annual or annual basis.

Committee Member Kawano commented on reports comparing current years to previous years and weighted student formula by school. He stated that these kinds of reports have more comparability to actual funds versus allocations.

Committee Chairperson Uemura asked if the Committee prefers comparative reports on a quarterly or semi-annual basis. He emphasized that the Department’s workload and systems require manual input. He stated that he believes it might be more appropriate to review financial reports on a semi-annual basis.

Committee Member Kawano agreed that it makes sense for the Committee to review financial reports on a semi-annual basis. He stated that the Department’s first quarter reports do not provide the Committee with enough information.

Committee Vice Chairperson Voss agreed that first quarter reports have little value and stated that he supported receiving reports on a semi-annual basis. He expressed concern regarding school food service funds and stated that he would not want the Department to wait to disclose important information due to the scheduling of fiscal reports. He stated that if the Committee agreed to receive fiscal reports on a semi-annual basis he would like to direct the Department to report on any issue that could have a material effect on finances compared to the previous year as soon as possible.

Committee Chairperson Uemura agreed with Committee Vice Chairperson Voss and stated that the Committee expects the Department to report on issues sooner rather than later if the Committee were to receive fiscal reports on a semi-annual basis. Hallett confirmed that the Department would do so. Committee Chairperson Uemura confirmed that the Committee would like to review fiscal reports every six months rather than quarterly.

Committee Chairperson Uemura stated that it has been about five months since the Department presented an update on the implementation of Act 155. He detailed that there were several areas that the Department was pursuing in order to move Act 155 forward at that time, specifically the status of community engagement meetings on the three Board of Education (“Board”) approved sites that the Department was to complete by the end of August; the status of due diligence on the three sites; the status of the request for proposals (“RFP”); the status of information on independent contractors, specifically SSFM; and the status of the memorandum of understanding (“MOU”) with the Hawaii Housing Finance and Development Corporation (“HHFDC”).

Committee Chairperson Uemura stated that the Department’s memorandum in the Committee’s meeting materials indicates that the Department has made progress in certain areas. He stated that the Committee was unaware of these steps. For example, the transferring of the fee simple interest of the three properties. He detailed that the Board of Land and Natural Resources approved the transfer and the Department of Natural Resources is working on the cancellation of three executive orders. He stated that the Committee is interested in this timeline and how these developments impact the development of these properties. Committee Chairperson Uemura stated that Act 272 extends the lease term for Act 155 properties from 55 years to 99 years. He highlighted that the extended lease term makes projects more financially feasible for developers. Committee Chairperson Uemura stated that Act 206 transfers high school properties directly to the Department. He detailed that he has questions regarding properties other than high schools, such as middle school and elementary school properties.

Committee Chairperson Uemura stated that the Department’s memorandum addresses due diligence efforts on Act 155 sites. He detailed that the 22nd Avenue and Diamond Head sites have inadequate sewer capacity for development and the sewer needs to be upgraded. Committee Chairperson Uemura stated that the question is who is responsible for the upgrades. He noted that the City and County of Honolulu indicated that it does not have plans to complete upgrades and stated developers can assume the cost.

Committee Chairperson Uemura stated that the Department’s memorandum indicates that the Department of Budget and Finance (“B&F”) wrote a letter to the Department indicating that there may be an issue with entering into a long-term lease of public school land and related improvement with a private developer pursuant to Act 155 where appropriations of proceeds of outstanding tax-exempt general obligation (“GO”) bonds were used for the acquisition, construction, or improvement of such land. He stated that the Department would need to address this issue and detailed that these restrictions apply for as long as the GO bonds are outstanding.

Committee Chairperson Uemura stated that the Department’s memorandum indicates that the Department met with the University of Hawaii’s Land Development Branch to discuss the issue of bond funding and to better understand the process for developing public land. He stated that the Department drafted a response memorandum to B&F citing conditions under which the Department would hope to proceed with Act 155. He emphasized that the Committee needed to know the key points in the memorandum that describe the conditions under which the Department could proceed.

Committee Chairperson Uemura stated that the Department’s memorandum indicates properties which the Department hopes to pursue based on the original B&F memorandum. He noted that public school lands are not acquired using appropriations of tax-exempt GO bonds. He stated that he has questions regarding the process the Department is using to identify these public school lands and asked how many properties fall under this category and fit under the initial criteria used to select the five original properties that the Department presented to the Board for approval. He detailed that the Department went through this process with the help of a consultant and used a consultant to identify criteria to present five sites, of which the Board selected three. He asked how the new criteria affects the original criteria. He detailed state-owned properties with no bond-financed improvements or properties where such improvements have exceeded their life-cycle utility and are scheduled to be demolished. He asked if the Department has such properties and asks how it identifies these properties.

Committee Chairperson Uemura stated that the Department’s memorandum states that the Department is continuing efforts to move forward but noted that he has questions and concerns regarding the Department’s good intentions. He questioned how realistic it is for the Department to look for new properties and how long this would take. He asked if any of the current three properties fall under the description for new properties. He asked why the Department is pursuing an RFP, MOU, and community meetings if the three properties do not fall under the description for new properties.

Committee Chairperson Uemura stated that the Department’s MOU with HHFDC is questionable because HHFDC’s main domain is affordable housing. He noted that he shared his concerns regarding the MOU with the Department but did not receive a response. Committee Chairperson Uemura stated that he had discussions with HHFDC’s executive director and it was confirmed that HHFDC’s charge is affordable housing which is not the primary interest of the Department or the charge of Act 155.

Committee Chairperson Uemura stated that he had some food for thought and emphasized how critical GO bonds are. Chung stated that GO bonds are an issue and they give the Department pause in moving forward due to uncertainty and unknowns. He detailed that the Department is working with B&F and waiting to receive clarity from B&F regarding any restrictions relating to GO bonds. He noted that GO bonds might have direct implications on RFPs. Chung stated that the Department submitted descriptions of its project plans and B&F is working with bond counsel to seek clarification. Committee Chairperson Uemura asked if the Department provided plans on the three original properties. Chung confirmed that the Department submitted plans for the three properties. He noted that the Department is working through a number of issues outside of Act 155. He stated that B&F determined that every development is unique and would need to be reviewed independently.

Committee Chairperson Uemura asked if it would be prudent for the Board to reduce the three properties to one. He noted that the ultimate goal is to have one project. Committee Chairperson Uemura stated that it would be interesting to see which properties fall under the other criteria. He noted that GO bonds are refinanced periodically. Chung confirmed that this is correct. He detailed that the typical bond is financed for 30 years but B&F noted that GO bonds are frequently refinanced. He noted that the challenge is that systems of record are not set up to show statuses or whether bonds were used and expended. Chung explained that the Department would need to identify all project funding and determine which projects were executed at schools and which projects used bond funding.

Committee Chairperson Uemura noted that GO bond-financed property might be cleansed of any obligation debt prior to issuing a lease by redeeming the GO bond issue expended on a site or returning the site to the original condition. He asked if cleansing refers to sewer, water, and so forth. Chung confirmed that this is correct.

Committee Chairperson Uemura stated that the Department should identify properties in which it would be easy to move forward and focus on these properties. He stated that the Department should determine which property makes the most sense to move forward and then determine development options. Chung stated that the Department has done this and is waiting for determinations from B&F. Committee Chairperson Uemura asked when B&F would release its determination. Chung explained that B&F is still working on making a determination. He noted that the Department checked in with B&F the previous week and B&F did not have an answer at that time.

Committee Vice Chairperson Voss emphasized the importance of the Department moving forward. He stated that he understands the difficulties of bond financing but the Department could solve some problems by subdividing. He stated that the Department should weed out projects that are not feasible. He noted that two of the properties require 1,600 feet of linear sewer line and stated that the cost of this might be high and it might be unrealistic for the Department to move forward on these two properties. Chung stated that the cost might be $4 million or $5 million. He noted that the sizing of the pipe is based on theoretical maximum density. He stated that the project might be feasible if developers are interested in the RFP and fund the sewer improvements. Committee Vice Chairperson Voss stated that it appears as though these two properties are not feasible for the purpose of Act 155 and do not meet the objectives of Act 155.

Committee Chairperson Uemura stated that it might make more sense for the Department to focus on one property and potentially present two new properties.

Christina Kishimoto, Superintendent, stated that the Department received feedback from business leaders, legislators, and the Committee, and intends to return in January 2020 to present an updated recommendation based on feedback. She stated that the Department’s goal is to execute one significant project that is feasible, has community support, and minimizes risks and challenges.

Committee Chairperson Uemura asked Committee members to refer to their materials regarding the Department’s financial management system (“FMS”) modernization update.

Committee Chairperson Uemura detailed that the Department reported on the need to replace the Department’s FMS and move the project forward as recently as the Committee’s February 21, 2019 meeting. He noted that he recognizes the need for a replacement system and supports the Department’s efforts to install a new system.

Committee Chairperson Uemura stated that he would like to remind the Committee that the Board, through the Committee, has oversight responsibility to ensure that the replacement system meets the entirety of the Department’s intended objectives. He noted that the Committee’s charter specifically states that the Committee is to review and recommend strategic information technology plans to the Board and review plans for implementation of major information technology infrastructure.

Committee Chairperson Uemura noted that the Board does not have the requisite experience to accomplish its oversight responsibilities without assistance. However, the Board has several options. Per the Committee’s charter, the Board has the authority to retain independent parties to assist in fulfilling its oversight responsibilities or the Committee can rely on Administrative Directive (“AD”) 18-03 and Hawaii Revised Statutes 27-43 to meet its oversight responsibilities.

Committee Chairperson Uemura detailed that Governor Ige signed AD 18-03 on October 1, 2018, which outlines the mandatory governance process through the Office of Enterprise Technology (“ETS”), headed by the Chief Information Officer, to organize, manage, and oversee statewide information technology governance. He stated that FMS meets the AD 18-03 program criteria and therefore must adhere to the governance process criteria described in the directive. Committee Chairperson Uemura detailed that the governance process for information technology projects consists of project review gates to ensure project execution and associated expenditures are sufficiently evaluated and receive approval by the appropriate governing body in each phase.

Committee Chairperson Uemura reviewed the Committee’s responsibilities as detailed in various phases. He detailed the information technology road-mapping phase and noted that departments must develop and maintain multi-year information technology roadmaps which identify all existing and planned expenditures for information technology projects, operations and maintenance, hardware, software, infrastructure, and services in support of department and administrative priorities. He stated that departments are to meet with the Chief Information Officer and ETS’s information technology governance staff on a monthly basis to review and validate information technology roadmaps.

Committee Chairperson Uemura detailed the budgeting phase and noted that B&F will send all department information technology budget requests for ETS for review. Governance staff will review and analyze the requests and the Chief Information Officer will then recommend which requests merit consideration for inclusion into the proposed budget to B&F.

Committee Chairperson Uemura detailed the initiating phase and noted that all requested funds for the project or initiative must be secured by and available to the Department prior to starting the phase. Governance staff will analyze the request and meet with the Chief Information Officer to review and recommend whether the request can proceed to the planning phase.

Committee Chairperson Uemura detailed the planning phase and noted that the Project Advisory Council will review and approve the project before it proceeds to the procurement phase. He stated that the council meets once per month and is comprised of the Department of Accounting and General Services Comptroller, B&F’s Director of Finance, and the Director of the Department of Human Resources Development. He detailed that information to be presented includes return on investment, alternatives to be considered, total estimated costs, business justification, project requirements, phases, deliverables, funding mechanism, personnel impact, procurement method, contract management approach, and a schedule.

Committee Chairperson Uemura detailed the procurement phase and noted that the Chief Information Officer must review and approve RFPs, quotes, bids, and corresponding statements of work prior to release. The Chief Information Officer must also review and approve best and final contract versions after a vendor has been selected prior to final execution.

Committee Chairperson Uemura detailed the contract and operations phase and noted that ETS’s governance staff must review project implementation schedules and supporting documentation within 30 days of the notice to proceed date. Thereafter, departments must submit quarterly status updates to ETS to monitor progress and ensure production readiness. Committee Chairperson Uemura noted that the Chief Information Officer has full discretion in identifying projects that will be subject to independent verification and identification.

Committee Chairperson Uemura emphasized that the Committee will be relying on ETS and the Chief Information Officer to provide the necessary oversight to the FMS project. He noted that the Committee will need to ensure that the Department complies with the various requirements in AD 18-03 to fulfill its responsibilities. Committee Chairperson Uemura detailed efficiency and asked whether the Department has followed AD 18-03 or whether the Committee would need to retain independent parties.

Kishimoto stated that she is chairing a steering committee and the Chief Information Officer and Comptroller serve on this committee as well. She detailed that all individuals on the steering committee have agreed to attend every meeting and noted that the steering committee maintains meeting minutes. She stated that the Department received a letter and discussed independent verification and exceptions and is aware of the cost it will need to incur. She added that ETS would put the Department’s contract into place.

Committee Chairperson Uemura stated that he would like the Department to provide information regarding exceptions to AD 18-03 and emphasized that exceptions do not relieve the Committee of fulfilling its responsibilities. He emphasized that the Department needs to make the Committee aware of whether exceptions exist and what these exceptions are. He stated that he understands that there is a steering committee but other oversight groups review the various phases as well. He stated that he would like information regarding roles and how the steering committee is addressing different areas. He stated that he would like to review the letter and discuss exceptions but emphasized that he does not want to downplay the Committee’s responsibility and role in this new system.




V. Recommendation for Action

Committee Chairperson Uemura reviewed a new Board policy, entitled “Equitable Allocation of Facilities,” to ensure 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. Committee Chairperson Uemura asked Committee members to refer to their materials.

Committee Chairperson Uemura directed the Committee’s attention to the memorandum submitted by Committee Vice Chairperson Voss dated November 21, 2019. He stated that at its October 3, 2019 meeting, the Department was not ready to present a draft policy. The Committee did not want to fall behind on achieving its priority thus it issued a new timeline where Committee Vice Chairperson Voss would revise the draft policy and the Department would work on an R&M priority list.

Committee Chairperson Uemura commended Committee Vice Chairperson Voss’s memorandum and stated that he expects similar memoranda from the Department as part of its meeting materials. He highlighted that Committee Vice Chairperson Voss’s memorandum makes for efficient use of the Committee’s time. The memorandum lists important discussion points, rationale and an analysis, policy intent, and provides guidance for the Department as to the Board’s expectations. He highlighted that both the memorandum and draft policy were well written and further highlighted that the memorandum supports the policy. He noted that the proposed policy language was not created in a vacuum and was based on ideas and expectations of how implementation would work.

Committee Member Dwight Takeno moved to adopt Board Policy 301-_, entitled “Equitable Allocation of Facilities Resources,” as provided in Exhibit A of Finance and Infrastructure Committee Vice Chairperson Voss’s memorandum dated November 21, 2019. Committee Member Kili Namauʻu seconded.

Committee Vice Chairperson Voss emphasized the importance of the new policy and stated that it restores the promise of equity in facilities statewide and establishes a baseline requirement of safe and equitable facilities. He highlighted that the policy directs the Department to allocate resources equitably and transparently for CIP and R&M and take into account socioeconomic needs. He stated that the most important component of the memorandum is that is sets forth the Board’s expectations regarding implementation of the policy. The Board’s expectation is that the Department will develop public priority lists after it develops processes for prioritizing CIP and R&M projects. He stated that these priority lists would be part of the Department’s budgeting process for R&M and CIP and would serve as integral tool for everyone in the state, including legislators.

Committee Member Catherine Payne stated that she likes the clarity of the policy.

Committee Member Kawano commented on the size of the first priority group and expressed concern regarding the Department’s ability to complete projects, especially taking into account design phases, timelines, and so forth. He stated that the Department has many projects to complete and expressed concern that it would be unable to complete important projects that are not part of the first priority group. He noted that it might take the Department two or four years to complete various projects and some schools might never see projects to completion. He stated that he appreciates the clarity of the policy but is concerned regarding implementation.

Committee Vice Chairperson Voss agreed with Committee Member Kawano’s concerns. He stated that the Department would need to develop a process and might model its process after other successful states. He emphasized that the process would need to be dynamic and under regular review. He expressed concern that it is unclear what the Department’s priorities are at any given time in terms of R&M and CIP projects. He emphasized that the Department would need to be transparent about its priorities, create a dynamic process, ensure yearly reviews, and ensure that projects rise to the top of the list.

ACTION: Motion to adopt Board Policy 301-_, entitled “Equitable Allocation of Facilities Resources,” as provided in Exhibit A of Finance and Infrastructure Committee Vice Chairperson Voss’s memorandum dated November 21, 2019 (Takeno/Namauʻu). The motion carried unanimously with all members present voting aye.

Committee Chairperson Uemura stated that he would like the Committee to adopt the intent and expectations described in Committee Vice Chairperson Voss’s memorandum.

Committee Member Namauʻu moved to adopt the intent and expectations described in Finance and Infrastructure Committee Vice Chairperson Voss’s memorandum dated November 21, 2019. Committee Member Takeno seconded.

ACTION: Motion to adopt the intent and expectations described in Finance and Infrastructure Committee Vice Chairperson Voss’s memorandum dated November 21, 2019 (Namauʻu/Takeno). The motion carried unanimously with all members present voting aye.

The Committee took this agenda item together with agenda item VI.C, entitled “Committee Action on Department of Education’s priority criteria for executing Capital Improvement Program projects (FIC Strategic Priority 2)” See the minutes under agenda item VI.C for the discussion.

Committee Chairperson Uemura asked Committee members to refer to their materials regarding the Department’s R&M priority list. He stated that the Committee’s work timeline is compressed. The Committee was originally supposed to review the new Board policy at its September 19, 2019 meeting but the review was delayed to its October 3, 2019 meeting. The draft of the new policy was not ready for approval at that time and the Committee moved it to today’s meeting.

Committee Chairperson Uemura stated that the compression of its work timeline occurred because the new policy review and approval and the R&M and CIP priority execution criteria review and approval is to occur on the same day. The expectation was for the Department to develop and present an R&M priority list based on equity and equity-based criteria to determine the priority order of the execution of school-based CIP projects after the adoption of the new policy.

Committee Chairperson Uemura stated that the Committee envisioned lists that would be used to establish the priority order in which the Department executes R&M and CIP projects. He emphasized the importance of the process for how the Department determines these lists. Committee Chairperson Uemura stated that the draft priority list would be designed to reach the outcome described in the new Board policy. He stated that it is difficult to address the list in conjunction with the new Board policy because the Committee just adopted the new Board policy.

Committee Chairperson Uemura suggested that the Committee defer action on the Department’s R&M priority list to its next meeting on January 16, 2020 to allow the Department to fully incorporate the new policy as described in Committee Vice Chairperson Voss’s memorandum dated November 21, 2019.

Committee Vice Chairperson Voss moved to defer action on the Department’s R&M priority list and priority criteria for executing CIP projects to its next meeting on January 16, 2020 to allow the Department to fully incorporate the new policy as described in Committee Vice Chairperson Voss’s memorandum dated November 21, 2019. Committee Member Namauʻu seconded.

Committee Vice Chairperson Voss asked how the Department would quantify needs and then allocate resources. Chung explained that it has been a challenge for the Department to determine prioritization. He noted that the Department has many needs but limited resources. Chung expressed concern regarding the length of time it might take for the Department to complete projects after determining how to prioritize projects. He expressed further concern that the Department would be unable to address low priority needs due to the number of high priority projects and lack of funding. Chung stated that he agrees with the new Board policy but has concerns regarding long-term implementation.

Committee Vice Chairperson Voss stated that the intent of the new Board policy is for the Department to pursue a process that is more transparent and publicly accessible. He stated that it is important for the Department to be clear on its priorities. Committee Vice Chairperson Voss asked how the Department might change its process to align with the new Board policy. Chung explained that the Department would need to review the current state of things and determine where and how it wants to move forward. He detailed that the Department would need to identify all needs and publish information publicly. Chung stated that the Department would need to determine how to merge socioeconomic and facilities lenses because it has not done so in the past.

Committee Vice Chairperson Voss asked if the Department could complete a comprehensive priority list so that it could consider this list for the next biennium. Chung confirmed that the Department could complete a list in time for the next biennium.

Kishimoto stated that the Department is overlaying the Committee’s expectations and equity criteria as it moves through the process. The Department is reviewing capacity, current structures, demands, and sufficiency. She stated that the Department would need to examine its facilities structures and capacity in addition to prioritizing projects. She detailed challenges such as procurement, staffing, and wages, and stated that the Committee and Department should continue to have these discussions.

ACTION: Motion to defer action on the Department’s R&M priority list and priority criteria for executing CIP projects to its next meeting on January 16, 2020 to allow the Department to fully incorporate the new policy as described in Finance and Infrastructure Committee Vice Chairperson Voss’s memorandum dated November 21, 2019 (Voss/Namauʻu). The motion carried unanimously with all members present voting aye.

VI. Adjournment

Committee Chairperson Uemura adjourned the meeting at 12:01 p.m.