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 12, 2024
PRESENT:
Ken Kuraya, Chairperson
Elynne Chung, Vice Chairperson
Kahele Dukelow
Wesley Lo
Roy Takumi, Ex Officio
Bill Arakaki, Ex Officio
EXCUSED:
Mary Hattori
ALSO PRESENT:
Keith Hayashi, Superintendent, Department of Education
Randolph Moore, Deputy Superintendent of Operations, Department of Education
Brian Hallett, Assistant Superintendent, Office of Fiscal Services, Department of Education
Ethan Yang, Board Student Representative
Capsun Poe, Board Executive Director
Wimmie Wong Lui, Board Analyst
Lady Garrett, Secretary
I. Call to Order
Committee Chairperson Ken Kuraya called the Finance and Infrastructure Committee (“Committee”) Meeting to order at 10:00 a.m.
II. Approval of meeting minutes of April 11, 2024, and October 31, 2024, Finance and Infrastructure Committee meetings
ACTION: Approval of the meeting minutes of the April 11 and October 31, 2024, Finance and Infrastructure Committee meetings. (Lo/Dukelow). The motion carried unanimously with all members present.
III. Update on Department of Education’s capital improvement projects and capital improvement projects budget request for fiscal biennium 2025-27
Committee Chairperson Kuraya called on Hayashi, Superintendent to provide the Department of Education’s (Department) capital improvement projects (CIP) and CIP budget request for fiscal biennium (FB) 2025-27. Hayashi stated that Randy Moore, Deputy Superintendent of Operations, will provide the recommendation on behalf of the Department.
Moore outlined the CIP and CIP budget request for FB 2025-2027. He stated that the Board approved the CIP budget on October 31, 2024, and for fiscal year 2024, the CIP funds were released via allotment advice in the amount of $304,035,000. For FY 2024, the CIP funds that are pending release amounts to $29,600,000 as of November 12, 2024. For FY 2025, the CIP funds that have been requested was $195,415,000, from the project completion allotment request of $119,300,000 only $84,193,000 was released. For FY 2025, the CIP funds that are in process of being requested for release amounts to $424,202,000 as of October 7, 2024. The Department anticipates lapsing $39 million due to projects being underfunded, not on the priority, and/or completed.
Committee Chairperson Kuraya called for oral testimony. No testimony was provided.
Committee Member Lo stated that a majority of the lapsing funds was due to legislative line items. He asked how projects became underfunded and how the Department communicated with the legislature. Moore explained that all lapses are legislative initiatives. The Department has received positive responses from legislators and encouraged principals to support the Board’s budget request.
Board Member Dukelow, Ex Officio, reiterated that the idea is that 100 percent of lapsing funds are not requested by the Department. She asked what percentage of the total are special projects from the Legislature. Moore replied that ideally none but he does not have that information immediately available.
Board Member Dukelow, Ex Officio, referenced line item 5 and requested clarification for the Lahaina Elementary School request. She asked if the operating budget reflected the costs to maintain the school. Moore stated that line item 8 is for the new school.
Board Member Takumi, Ex Officio, asked for Moore to opine on the relationship between the School Facilities Authority (SFA) and the Department. Moore opined that personally the relationship is not beneficial. He expressed understanding for the frustrations from the Legislature and the intent to have a separate entity build schools. He shared that there are challenges since the builder of the school should have discussions with the users and the Department is looking to provide education for students.
Committee Member Lo stated that there is a lot to evaluate relating to SFA and expressed interest to understand the process including interactions with the Department.
Board Member Dukelow, Ex Officio, expressed concern on the Maui Elementary School development and if the community is not involved where are the discussions happening. She emphasized that it is important to evaluate what accountability SFA has to the community because the public deserves to have input in the process.
Committee Chairperson Kuraya expressed appreciation for Moore. He also expressed appreciation for the information in Attachment 1, which gives specific details on why the funds are lapsing.
Committee Member Lo expressed concern for the lump sum reduction of $600 million to $100 million, especially for categories such as compliance. Moore stated that there could be penalties if the Department is found to be out of compliance. Committee Member Lo emphasized that there are risks to be dealt with if this is the final version of the CIP budget and noted that project completion reductions means things will be incomplete. Moore clarified that the Department may not proceed with projects if adequate funding is not available.
Keith Hayashi, Superintendent, stated that this is one portion of the CIP budget item request then the Department will proceed with the Legislature.
Board Member Dukelow, Ex Officio asked for clarification on line item 18 relating to grant monies. Moore replied that the total costs reflects the federal portion which is 80% and the Department covers the remaining 20% of the project, but in order to spend the entire amount authority is needed.
IV. Update on Governor's decisions for the Department of Education’s operating budget request for fiscal biennium 2025-27
Committee Chairperson Kuraya called on Brian Hallett, Assistant Superintendent, Office of Fiscal Services to provide the update on Governor’s decisions for the Department’s operating budget request for FB 2025-27.
Hallett stated that on October 31, 2024 the Board approved the Department’s proposed FB 2025-27 operating budget request with an amendment to restore funding for the Learning Centers program. On November 13, 2024, the Department of Budget & Finance (B&F) issued the recommendation, then on November 21, 2024, the Department appealed for the restoration of all cuts made by B&F since a “flat” budget was submitted. The Governor’s budget provided for 97% of the Department’s request except only $4 million of the $15.8 million request for Safety, Security, and Emergency Preparedness Branch was funded, and no funding was provided for the $200,000 request for classified staff training. The Governor did include additions to what was asked for by the Department for an assistant superintendent and private secretary for the Office of Facilities and Operations, $140,000 for fringe benefits to be transferred to the Department of Accounting and General Services for neighbor island schools repair and maintenance; and $1.6 million for lease rent and maintenance costs for King Kamehameha III Elementary School, Maui. The Department will continue to provide updates as the legislative session progresses.
Committee Chairperson Kuraya called for testimony. No testimony was provided.
Committee Member Lo asked for comments from the Department about the additional assistant superintendent for OFO. Hayashi stated that the Department is looking at shifting current responsibilities to an additional superintendent. Committee Member Lo expressed appreciation for the presentation and everyone involved in the process.
V. Adjournment
Committee Chairperson Kuraya adjourned the meeting at 10:53 a.m.
For written testimony see the following link:
December 12, 2024