House Standing Committee on Education

Okay. Good afternoon, everyone. This is your Committee on Education. Today's date is March 24, 2:00pm, and we are in Conference Room 309 in the State Capitol. A very light agenda today. So we will just get started. SB 2550, SD 1, this is with regards to SFA and a CIP database proposition. First up, we have is SFA offering testimony in support in person.

Thank you, Chair Woodson, Vice Chair La Chica. Riki Fujitani with the School Facilities Authority. We support this bill. The bill is to develop a plan to modernize the way we build schools. We spend on average about 454 million a year in CIP for schools. If you look at the last twelve years, that's about $5.4 billion. We need a strategic plan that aligns the best use of this money. Hawaii is unique in that schools are funded not by property taxes.

So we haven't developed that discipline to develop this kind of plans. If you look at school districts like Fairfax in Virginia or San Diego or Portland Unified School District, their plans are incredibly detailed because it requires voters to vote for the bond funding. I mean, these plans are several hundred pages. We're not gonna do that. We're gonna just start small, but we need an overall framework, and that's what this bill seeks to do. Thank you.

Thank you for being here today. Next, we have Department of Education offering comments. Mr. Souki.

Good afternoon, Chair and Vice Chair. Jesse Souki, Deputy Superintendent of Operations, Department of Education. We offer comments. Just briefly to summarize, while the department shares the legislature's intent to improve transparency, accountability, and modernization of public school facilities, the bill as written duplicates existing systems, creates parallel processes, and undermines coordinated statewide planning.

The department already maintains existing facilities and project data systems and has project prioritization process, all of which could be strengthened through modernization funding provided under this bill. Fixed asset information is managed through our maximal system. Project tracking is managed through our capital project tracking system, CPT.

Enrollment capacity data are managed through our Office of Strategy and Innovation, and performance and statewide facilities condition data is collected through HI-FIT assessments from 2020 to 2023. These systems were developed to support operational needs and regulatory compliance and together from established framework for identifying, prioritizing, and budgeting student facility needs.

The department has a formal project identification and prioritization process. Project submission procedures include evaluation, criteria, scoring considerations, and the Hawaii State Board of Education's review. The $4 million appropriation proposed by the bill would be used more effectively by directly strengthening systems already in place at the department.

The department has convened a working group more recently from its finance, IT, and facilities offices to assess and evaluate system improvements, strengthened consolidated reporting, and coordination between schools and its state offices. Thank you for the opportunity to comment.

Thank you so much for being here. Next, we have HSTA offering testimony in support in person. They're not here. Next, we have Hawaii Children's Action Network Speaks offering testimony in support. We have HGEA offering testimony offering comments.

Actually, not in support, comments. And we have two individuals, both submitting testimony in support. Is there anyone else wishing to provide testimony for SB 2550, SD 1? Seeing none. Members, are there any questions? Vice Chair.

DOE. Hey, Deputy. Did you get a chance to read the Auditor's report on the heat abatement efforts? And so in the Auditor's report, it says... Well, first of all, the bill... I wanna acknowledge that this is a companion to the House bill that I introduced.

Would require the School Facilities Authority to build a statewide CIP planning database with, at minimum, an annual asset inventory, a facility's condition index updated at least every five years, and annual enrollment to capacity data to really and require this to be organized by legislative district and complex area to be and make this publicly available to really provide transparency and help us with decision making.

Also, in the Auditor's report, the Auditor found that the DOE struggled with poor record keeping, inconsistent and incomplete project records, inability to locate key documents, inability to provide a reliable accounting of spending, inability to provide complete program inventories. And the audit found that DOE's knowledge of the, you know, work was so incomplete that the Auditor could not assess it.

And so you mentioned all of these different systems, but with what I'm trying to achieve here, do you, can you, can you provide us today with all the existing systems a public facing statewide database on what this bill is looking for? Can all of those systems talk to each other and produce what it is that we're looking for in this bill?

So referring to the heat abatement audit, you know, there's a saying in law, bad facts make bad case law. And I would not say that that audit didn't find things that were concerning. But that was looking at a program where there was a $100 million put into a program that the DOE had one year to spend on schools across 258 campuses.

So I would say that using that audit alone is some kind of impetus for changing the whole system in a way we do things would probably not be the best approach. But I would also, to address your specific question, say that we have this information and we have systems that talk to each other.

We'd like it to be less manual than it is now, which is why we're going through a process to update our system. And I do acknowledge that our outward facing system, we used to have and don't currently use because there were some issues with it. But we are trying to get to a place where we can have a better outward facing, public facing, data that bill is attempting to achieve.

There is another bill that talks about some that I testified on this morning in a different committee that talks about things that the legislature would like us to report, and I think that that's a good bill. We can we can work on reporting those specific things. Yeah.

So are you are you confirming that you do have this existing, or it would be something that you would need to build? Like, existing into one database, like inventory, facilities condition, enrollment to capacity per, you know, organized by complex area or legislative district?

We have information by school and a complex area, and we have some of that information. Yes.

Okay. Thank you. SFA, please. Thank you so much. Okay. Director, regarding this Auditor's report, were you with SFA already, or were you still with DOE when this report was...

I was with the DOE.

And can you comment on the findings that were in this report on the, what to your knowledge, how are key documents, how's record keeping kind of done? And, like, are you aware of some of the systems that are, were mentioned earlier? Were those the systems that were used before and are that are still being used today?

So none of those systems existed during heat abatement. Heat abatement was a program run by a team of consultants. And what happened was it was group think. They just went in with one idea. And that idea was bad, so it got replicated a thousand times.

All these systems we talk about, HI-FIT, classroom capacity analysis, CPT. Actually, I used to run the IT department of an insurance company. So myself and John Chung were the principal architects of all these systems. Unfortunately, once we left, these systems haven't been updated or kept track. That's why these systems exist.

These are all part of a requirement for transparency by House Finance to build these systems in order so that this information could be provided to the public. Right? So I'm well aware of all these systems. I mean, I can tell you the history of it, how it was built, what platforms they used, what it is now. This data is all is all different types of data. The CIP plan is something completely different.

You know, right now, what what you get every year is you get an Excel spreadsheet with a memo to the Board of Ed asking you for a billion dollars. That's that's not a plan. It's a memo and an Excel sheet. And that's what you base your decisions on.

That's nothing compared to what other school districts have to do to to justify a bond fund. And that's what we hope to do. Again, not to that extent where the voters will vote on it, but something that gives you the information to make strategic decisions on where to place this incredible sum of money every year.

And then what would you feel should be contained in this annual report to the legislature?

Yeah. First of all, no report. It's gotta be a database. It has to be dynamic. It has to get systems of record. It has to be real time. And clearly, it should be legislative driven from a legislative 51 Rep districts, 25 Senate. It should be based upon that. So when you go in, you see everything in your district.

And then you can make right decisions on where to place that money. That's what you want. Because unlike property tax and voters, you're the funders of the school system. Right? And you can't make informed decisions right now because you don't have that information.

Final question, Chair. We had talked about this, but the draft of the bill does ask for a significant appropriation. Should we proceed with this measure, would you, are you open to us, are you still able to continue with operating this should there not be funding available?

I think we can develop a basic framework and assemble a significant amount of information with almost no additional funding. More importantly, just given the authority to do it is the most important thing. As the tool and the data has to be refined and get more granular, then you'll need significant funds of funding.

Like, if you wanted to get a precise amount of the square footage of the available classroom space, that requires teams to go into the classroom, do LiDAR to get measurements to find the exact capacity of a school. That data is old. It hasn't been done since 2017, and it wasn't precisely measured. So we don't know that number.

We have a general guess. But if you want that kind of granularity, then it will require a lot more money. The key is to give the authority to do the framework on it. So next session, you're not faced with an Excel spreadsheet and a memo, but you actually have a database. It gives you that information so you can make basic decisions this time next year. That's the goal.

Alright. Thank you.

Thank you, Vice Chair. Member, any other questions? I have a quick question for SFA. Thank you for being here. And so I guess it's an unorthodox because you said that during the heat abatement program, you were actually at the Department of Education, OFO, which was not called OFO at the time, but it's what's now referred to as OFO.

It was called OSFSS. There was a lot of... Yeah. OSFSS.

So how would this particular proposal help operationalize that process? Because at the time, the DOE did have what's called, like, a heat abatement matrix in which they prioritize all the schools that they, that they thought needed AC and other types of solutions that they were using. How would this bill actually help make the process for you?

That's a... So heat abatement was an initiative to cool classrooms and with a $100 million. And so they tried to develop a heat index on which schools were the hottest. That's a different tool that was needed with a really short runway. This is this modernization CIP planning plan is typically a six year look ahead scheme. Right?

Where do you build schools? Where do you consolidate schools? Which schools have reached which buildings have reached end of life that should be demolished or replaced, which portables should be consolidated. It's a very different kind of tool. In heat abatement, they tried to figure out the best way to spend the $100 million and cool the hottest schools.

It didn't end up that way. But more importantly, they went with one technology that didn't work, which was a super complicated inverter charge controller battery. What was valuable was a split AC, which is still being salvaged. But what happened was you had six different inverters, all different technologies.

So when a firmware came in, 70 units would go out. 200 units would go out. And then it fed a different charge controller, which is all different, which then fit eight different batteries, which were all different. So you get chop suey. The air conditioner was really good. It was Mitsubishi.

But everything else was chop suey. And that's why it failed. You went all in on one theory. This is deciding on different strategies based upon different cases. Right? So that's why you have portables with solar, with batteries, with when the simplest thing would be put a window in. Yeah. It's a, to me, a classic case of groupthink gone bad.

It's interesting though that you mentioned that because how would this bill actually improve that process? Because what you're referring to as multiple contracts were using, like, these closed circuitry system bundles with regards to solar panels, display AC units, and then they were at first not attaching them to the grid, which which also created a bunch of different problems. But that's a quality control mechanism. How would this bill address that issue?

Again, this bill is not for this task of just cooling schools. This bill would be for planning the overall CIP placement year to year over the next forever.

No. We understand that. But once the project starts, right, you need to make sure that the project is on track. It's sticking to the budget. It's on time.

That's project management 101. Scope, budget, schedule. The key thing you need to do is implement a project office, and that does not exist.

Yeah. Let me ask this question. I appreciate the work you did with the pre k classrooms. Those came out well. However, those are relatively small projects compared to, like, building an entire campus or even a building. For the, you have two major projects right now. I'm familiar with one, obviously, because it's having to do with Maui. The second one, where are we with that project and what is it?

So for the preschools, right, the fastest, quickest way is a renovation. Right? And that's what's been we're on track to renovate as quickly as possible. We have in the queue right now about eight preschool hubs. Preschools basically being built, and that'll be deployed by lapsing of this year.

The designs permitting for preschools, it's a completely new design. It takes a lot longer. Right? So that's on a two year span. So soon we'll have about eight schools in construction for preschools. Our other two projects, Central Maui. Right? We're at schematic phase now, and so we're gonna start schematic. We're gonna start schematic design.

These the teacher housing on Mililani is a is a P3 outsourced to a vendor. The architect designing it has designed DOE projects for, like, the last twenty years in Hawaii, WRNS. They're very familiar with building schools in Hawaii, but that's being done with a private developer outside.

Is that project on track? Is it on time?

So it's moving along. The biggest issues is financing. Just like any other affordable housing, unless there's a significant state contribution, we line up behind 100 other affordable housing projects. And this is gap housing, so you're not at the front of the line. The front of the line goes to LIHTC affordable housing people.

So funding for this project is gonna be key whether it even progresses or not, but you're behind this long line of HHFDC. It just doesn't pencil out without a significant state subsidy. So we've been advocating for that. Whether the leg decides to to provide that, that dictates the project more than anything else.

Is that is that project on is it on track? Do you find is it is it on time? You mentioned LIHTC. That's a whole other conversation not from this committee.

It's on track. We've shown you schematic drawings already. It's gotten through the EA process, and we've submitted the 201H exemption process. That's all being done. That all has to be done in parallel, but the key thing is the funding. And that's the big...

Is there a lot of different pieces there? You mentioned LIHTC, that's gonna have a cost impact if you're not able to earn any credits. You, SFA has the ability to raise money. We incorporate that into the statute when we built SFA. Have you raised any money for this particular project?

We have nothing to raise money with. We have no land. The only way to give this is if we sell land, which we don't have. We can raise money by our statute, and the only way is we have nothing to sell or raise with.

You're gonna leverage improvements there on the land to raise money? Okay. Sounds good.

I mean, it's like asking KS to develop something with with no land. KS has a lot of land.

Yeah. But they leverage their assets well to to grow that pot of money. Anyway, thank you so much. I appreciate it. Members, any other questions?

That was a—just asking. We're gonna go on to the next bill, which is SB 2877, SD 1. This is with regards to student-authored pilot program. First, we have Department of Education offering testimony and offering comments, in person.

Good afternoon, Chair Woodson, Vice Chair La Chica, members of the committee. I'm Heidi Armstrong, Department of Education, and the department supports the intent of this bill, but we do recommend that participation remain voluntary to preserve school autonomy, and we suggest allowing for some flexibility, if other schools might also want to participate, and also, for flexibility, rather than having each student have his or her own book that possibly collective anthologies be allowed as part of this project.

So, perhaps a teacher might have a theme and then the book would include a collection of every student's contributions in writing to that theme. Thank you for this opportunity to testify.

Thank you for being here. We also have testimony from four individuals, three offering comments, and one in support. Anyone else? SB 2877, SD 1. Okay.

Seeing none. Members, are there any questions? Okay. Seeing none, we're gonna go on to the next bill. It was SB 3063, SD 1. This is with the department—this is regarding the Department of Education, local food products and exemptions.

First up on our list, we have the Department of Education, offering testimony and support in person.

Good afternoon, chair, vice chair, members of the committee. Jesse Souki, Deputy Superintendent of Operations. The department stands on this testimony in support. Thank you.

Thank you for being here. Next, we have Packard Business Development Corporation, offering testimony in support.

Good afternoon, chair, vice chair, members of the committee. I'm Wendy Gaity, the Executive Director for the Agribusiness Development Corp, and we stand in strong support.

Thank you for being here. Next, we have SPO, offering comments.

Good afternoon, Chair, Vice Chair, and members of the committee. Bonnie Kahakui, Administrator of the State Procurement Office. We stand on our written testimony, providing comments and recommendations. Mahalo.

Thank you so much for your testimony. We have Hawaii Farm Bureau, offering testimony in support. We have Hawaii Blue Producers Cooperative, offering testimony in support. And then we have one individual—oh, we also have Hawaii Farmers Union, offering testimony in support.

That's all I have on my list. Is there anyone else? SB 3063, SD 1. Seeing none. Members, are there any questions? Okay, seeing none.

We're gonna go on to the last bill, which is SB 3279, SD 1. This is with regards to the Department of Education, the Board of Education, and independent audits. First, we have is the Board of Education offering comments. Not here. The Department of Education offering comments.

DOE?

Stand on our testimony.

Thank you. Thank you, sir. Thank you for being here. We have two individuals providing testimony, one in support, the other in opposition. That's all I have for SB 3279, SD 1. Anyone else? Okay.

Members, any questions? Okay. Recess.

Okay. Thank you so much.

We are reconvening. We're gonna go into decision making. So, first up, we have is SB 2550, SD 1. This is regarding SFA and establishing a new CIP database to help out with our NCIP projects. Members, the recommendation is to pass this with HD 1.

There was, as vice chair mentioned, a, a house version that version is not moving. And so, what we'll do is we'll remove the appropriation language. I'll take that out of $4,000,000. It's a tough year, so we're not gonna do that right now. And then, we'll defect the date and kick it over to Finance.

Questions, comments, concerns? Vice chair for the vote, please.

[Roll Call]

Thank you, members. Going on to the next bill, which is SB 2877, SD 1. Members, recommendations for the HD 1: First, we'll be...page 1, under Section 2, Subsection B, under Line 9, we're going to change "shall" to "may," per DLE's recommendation. Also on that same page, Line 15, we're going to change that "shall" to "may."

These two provisions are with regards to only having this pilot program fee for the complete area, and then, the second is taking out the specificity as to how to—that the teachers need to move forward with that particular pilot program. Besides that, we will defect the date to 07/01/3000. That's all the amendments I have. Questions, comments, concerns?

Vice chair for the vote, please.

[Roll Call]

Okay. Thank you. Members, we're gonna go on to the next bill, which is SB 3063, SD 1. This is with regards to the local food products and exemptions. We're going to just simply defect the date to 07/01/3000. Questions, comments, concerns? Vice Chair for the vote, please.

[Roll Call]

Thank you, members. Going on to the last bill of the day, SB 3279, SD 1. This is with regards to the Board of Education, DOE, at independent audits. Members, I would like to recommend an HD one. First number is on page three, part two, section four.

You're going to remove the entirety of that section. This is with regards to freezing, searching FTEs, and the complete. I think that we should not be doing that right now, especially if we move forward with the makeup of this particular alternate auditing process, which I should note that there is already an auditing process in place for the Department of Education. Besides that, we will defect the date to 07/01/3000. Questions, comments, concerns?

Vice Chair for the vote, please.

[Roll Call]

Okay. Thank you.