December 7, 2023

DRAFT

STATE OF HAWAII
BOARD OF EDUCATION
FINANCE AND INFRASTRUCTURE COMMITTEE MEETING

MINUTES

Queen Liliuokalani Building
1390 Miller Street, Room 404
Honolulu, Hawaii 96813
Thursday, December 7, 2023

PRESENT:
Ken Kuraya, Chairperson
Bill Arakaki
Kaimana Barcarse
Warren Haruki
Lauren Moriarty
Kahele Dukelow, ex officio

EXCUSED:
Makana McClellan

ALSO PRESENT:
Keith Hayashi, Superintendent, Department of Education
Brian Hallett, Assistant Superintendent, Office of Fiscal Services, Department of Education
Capsun Poe, Board Executive Director
Wimmie Wong Lui, Board Analyst
Lady Garrett, Secretary

AGENDA

I. Call to Order

Committee Chairperson Ken Kuraya called the Finance and Infrastructure Committee (“Committee”) Meeting to order at 9:00 a.m. Committee Chairperson Kuraya, Committee Members Bill Arakaki, Kaimana Barcarse, Lauren Moriarty and Warren Haruki, and Ex-officio Committee Member Kahele Dukelow were present.

II. Discussion Items

Update on the Department of Education’s Supplemental Operating Budget Request for Fiscal Year 2025 (FY25)

Committee Chairperson Kuraya called on Keith Hayashi, Superintendent, and Brian Hallett, Chief Financial Officer and Assistant Superintendent of the Office of Fiscal Services to provide the update on the Department of Education’s (“Department”) Supplemental Operating Budget Request for Fiscal Year 2025 (“FY25”).

Hallett updated the Board on the Department’s supplemental operating budget request. He stated that of the $198 million requested by the Department, $101.5 was recommended to be included in the executive supplemental budget. Hallett noted that an additional $10 million in new general funds will be appropriated to fund door locks at schools. The executive supplemental budget request contains support for many critical basic needs but falls far short of what schools need to sustain existing supports designed to meet student needs. He shared that Attachment A includes a listing of all general fund line items sorted by the largest unfunded amounts to the largest funded amounts.

Hallett expressed appreciation for funding of the Department’s critical basic operational needs, but noted that the amount falls short of the required amount to support students, including instructional support. He recognizes that the Governor's proposal was made in the context of revenue projections, but expressed hope that the Legislature will be able to support these needs.

Hallett outlined next steps which include working with the legislature to provide continued, reliable funding for schools, including funding that was only made available for FY24.

Committee Member Arakaki expressed appreciation for the report and asked for clarification regarding the amount approved by the Governor in relation to the weighted student formula reserve funding which is helpful for small remote schools. He asked if this will be looked at for the schools who receive these funding. Hallett replied that the Committee on Weights recommendation will be built into the school financial plans including reserve funds that are not in the Governor’s budget which will be an area of concern.

Committee Member Arakaki asked if the additional funding for the superintendent is still available. Hallett replied that the funding he is referencing is part of the superintendent reserve.

Hayashi recognized that while visiting smaller schools he is aware that there are unique challenges and commended the rural small schools for working with their communities despite fiscal challenges. He emphasized that additional funding is important for small remote rural schools.

Committee Member Arakaki expressed appreciation for the recognition of the creativity of small schools.

Committee Member Haruki requested clarification on the work being done to “restore” funding requests for items that were not included in the Governor’s budget, such as $6 million for WSF. Hallett confirmed and expressed appreciation for the funds received already but noted that he is hoping for change.

Committee Member Haruki asked what the proposed timeline is. Hallett replied that the memorandum describes what Governor Green will be transmitting to the Legislature in December, and any pivoting that will need to be done will be based on new Council on Revenues projections in January.

Committee Chairperson Kuraya apologized to the Committee and noted that testimony should have been taken up first. He provided time for members to review testimony submitted after the 49-hour deadline.

Susan Pcola-Davis, member of the public, testified in support of the process to have the presentation first since it allows her to understand the subject better. She opined that there are several areas of concern which need to be addressed and she will provide testimony to the Hawaii State Legislature.

Julie Reyes-Oda, member of the public, testified and reminded the Board of her previous testimony in opposition to the additional deputy superintendent positions in light of the need for fairness to all Department workers, especially school-level employees.

Cheri Nakamura of HEʻE Coalition, member of the public, testified that they were disappointed that the Governor's budget did not include all of the Department’s requests. They will do what they can to advocate, including for weighted student formula funds. She requested information on what the Department’s contingency plan is, if the Legislature chooses not to fund.

Committee Member Moriarty expressed appreciation for the funding from Governor Green for high priority items and the updated information from the Department. She suggested that the Department tag each item back to the strategic plan goal which is being supported to track the alignment between resources and priorities. Committee Member Moriarty noted concern regarding funding requests not approved for items relating to student achievement, e.g., two strategies to support math learning, including math camps. She also suggested that the Department, in addition to providing the impact of not funding certain items, use research-based data and evidence to show return on investment whenever possible.

Committee Member Barcarse expressed appreciation for what was allocated, but would like to gain an understanding about the tangible negative impacts for items not funded, and what alternatives would be. He emphasized that the request needs to be conveyed that the budget items are needs including information that academic progress will be stifled without necessary resources.

Senator Kurt Fevella testified regarding the Superintendent's contract amendment and availability of funds to provide a salary increase in light of current employees in other positions suffering to make ends meet in Hawaii.

Committee Member Arakaki referenced the top five unfunded items including information on the entire amount unfunded and impact statements. He asked that Board Members provide more clarity on what additional information is being requested of the Department.

Committee Member Moriarty clarified that her request was not for more information to be provided to the Board, but that clear evidence be provided about the positive benefits of fully funding the request to assist in the Board’s advocacy with the Legislature, rather than sharing only the negative impacts.

Committee Member Barcarse added that it is important to communicate clearly so the community can understand and support the request.

Committee Member Moriarty stated that she did not receive a response from the Department regarding whether federal money received for summer programs made an impact so a request for additional funds would make a difference. The Department should justify why it makes sense to request funds to continue the program.

Committee Member Arakaki stated that schools presented various items and how things were going, including during recent school visits. He stated that to compile the information requested by Committee Members Moriarty and Barcarse would take the Department some time.

Board Member Dukelow, ex officio, asked what is the process moving forward and when do the schools need to start planning.

Hallett clarified the budget development process with the Governor and legislature and noted that the Department is always looking for what additional information to provide to help explain the need for the request. Hallett stated that schools are still struggling, but hopes that continued communication will help others understand the challenges because the Department is facing $100 million less in state funding.

Board Member Dukelow, ex officio, asked how the Department prioritizes funding requests. Hallett responded that communication is a struggle on how to best make use of limited resources.

Board Member Dukelow, ex officio, requested clarification of what will remain status quo or decreased without funding and what will be prioritized including the negative effects. She suggested that the Department explore alternative ways for information to be presented. Hayashi replied that the Department is looking forward to working with legislators and continued support from the Board going forward.

Committee Chairperson Kuraya stated that there is a lot of work and suggested that the Committee review the budget cycle referenced in the memorandum. He asked the Department to keep the Board updated so the Board can support the Department’s initiatives.

Update on status of schools’ fire alarm systems

Committee Chairperson Kuraya called on Hayashi and Curt Otaguro, Deputy Superintendent of Operations to provide the update on the status of schools’ fire alarm systems.

Otaguro outlined the status of fire alarm systems and noted that 90% of schools have working fire alarms. He explained that if a school has a non-working fire alarm, it will submit a work order, either to DAGS on the neighbor islands, or to the Office of Facilities and Operations (OFO) on Oahu.

Otaguro emphasized that the challenge for the Department is when the fire alarm system is inoperable because the access control panel fails. The access control panel is a single point of failure for schools with multiple buildings which needs to be changed. He stated that the average life of a fire alarm system is 15 years, and most of the school systems are well beyond this timeframe. Otaguro noted that new systems are more sophisticated and installation requires asbestos mitigation and expressed appreciation to the legislature for providing funding for fire alarm systems. He opined that an opportunity exists to reset and asked for the Board to support lobbying the legislature to provide the Department with a dedicated lump sum to address the fire alarm system.

Committee Member Arakaki left the meeting at 10:07 a.m.

Hayashi acknowledged that there are challenges with the fire alarm systems, and a more proactive approach to work with the contractors is needed. He stated that the Department will keep the Board updated.

Osa Tui, President of Hawaii State Teachers Association, member of the public, testified that only 90% of schools passing their fire inspections is despicable, and repairing fire alarms should be the highest priority. He expressed frustration that nothing was being done under the previous OFO leadership.

Committee Member Arakaki returned to the meeting at 10:15 a.m.

Susan Pcola-Davis, member of the public, testified that the public needs to know the inventory of all schools that do not have a fire alarm system or needs repair, a proposed schedule, and how the order of work is determined. She expressed concern that the Governor may be diverting money from the Department to assist with the recovery efforts from the Lahaina disaster.

Committee Member Haruki requested confirmation that working fire alarms should be one of the three top priorities, especially after the lessons from Lahaina. He noted that nothing much has happened and there is an acknowledgement that there is no plan, but there should be a reprioritizing of the repair and maintenance budget to cover some of these items. Committee Member Haruki requested clarification about the cost of a wireless fire alarm system in relation to the traditional system.

Otaguro responded that the Department is currently working on addressing these concerns and acknowledged that fire alarms are a top priority due to the Lahaina wildfire disaster. He stated that in discussions with the Honolulu Fire Department, a wireless system may not be practical and the Department is looking for alternatives but sometimes remediation can only be done during non-school hours.

Committee Member Haruki expressed disappointment that progress has not been made even after a month. He suggested that the committee request a periodic report on progress.

Committee Chairperson Kuraya agreed and requested that the Department provide an update at the next Board meeting.

Committee Member Barcarse asked when the first three projects on the list will be complete. Otaguro indicated that the projects are scheduled to be done in February or March 2024.

III. Adjournment

Committee Chairperson Kuraya adjourned the meeting at 10:31 a.m.

List of the people who submitted written testimony before the meeting

NAME	Organization	Agenda Item
Anika Angerlie		II.B. Update on status of schools’ fire alarm systems
Cheri Nakamura	HE’E Coalition	II.A. Update on the Department of Education’s Supplemental Operating Budget Request for FY25
Courtney D'Agostino		II.A. Update on the Department of Education’s Supplemental Operating Budget Request for FY25
Hannah Hokenson		II.B. Update on status of schools’ fire alarm systems