STATE OF HAWAII
BOARD OF EDUCATION
FINANCE AND INFRASTRUCTURE COMMITTEE MEETING
Queen Liliuokalani Building
1390 Miller Street, Room 404
Honolulu, Hawaii 96813
September 15, 2015
Grant Chun, Committee Chairperson
Brian De Lima, Committee Vice Chairperson
Margaret Cox, ex-officio
Patricia Halagao, ex-officio
Amy Kunz, Senior Assistant Superintendent and Chief Financial Officer, Fiscal Services
Dann Carlson, Assistant Superintendent, Office of School Facilities and Support Services
Brian Hallett, Director, Budget Branch
Alison Kunishige, Executive Director
Wendy Ramirez I. Call to Order
The Board of Education (“Board”) Finance and Infrastructure Committee (“Committee”) Meeting was called to order by Committee Chairperson Grant Chun at 11:38 a.m.
Committee Member Don Horner left the room at 11:38 a.m.
II. *Public testimony on Finance and Infrastructure Committee (“Committee”) agenda items
Corey Rosenlee, President, Hawaii State Teachers Association (“HSTA”), gave the Committee an update on HSTA’s collaboration with Department on the heat abatement program. He reported that the Department, HSTA, members of the Legislature, and solar providers are planning to meet October 9, 2015 to discuss how they can address heat abatement together. Rosenlee recommended looking at schools with electrical capacity and expediting air conditioning installation at these schools. He also asked for the Department’s support for pilot programs using donated systems, which will be off the electrical grid and asked the Committee to consider making a policy that would require schools to close early if classroom temperatures exceeded 92 degrees.
III. Approval of Meeting Minutes of August 18, 2015
ACTION: Motion to approve the Committee minutes of August 18, 2015 (De Lima/Mizumoto). The motion carried unanimously with all members present voting aye.
IV. Discussion Items
V. Action Items
A. Update on Department of Education’s sustainable/energy efficiency master plan, “Ka Hei”
Dann Carlson, Assistant Superintendent, Office of School Facilities and Support Services and Brian Kealoha, OpTerra Regional Manager, updated the Committee on the on-going efforts and progress of the Department’s sustainability and energy efficiency master plan, the Ka Hei program.
Carlson stated that overarching goal of the program is to find ways to conserve energy and to use energy more efficiently. To date, the Department has completed energy audits in 26 elementary, middle, and high schools across the state and determined the electric cost per student at each of these schools. They found that there is a disparity in the cost per student and how much each school is spending on electricity.
Carlson also reviewed the metrics for Phase I, highlighted where they could improve, and where they have been meeting or exceeding program goals. As the Department progresses into the next phase of the program, they are inspecting and upgrading roofs prior to installing rooftops photovoltaic panels and are also installing covered parking stalls with photovoltaic panels.
Carlson presented an overview of the pilot micro-grid project at Kaimuki Middle School, which is a partnership with Hawaiian Electric Company (“HECO”), the state Department of Business, Economic Development and Tourism, and federal agencies. He also described the educational component of the program, where team members go to schools to connect the program work with science, technology, engineering and math or STEM curriculum. In the months ahead, they are hoping to complete construction in order to get photovoltaic units installed across the state.
Committee Vice Chairperson Brian De Lima asked about the 77 photovoltaic projects that HECO has approved and wanted to how many schools will apply for this initiative. Kealoha responded that between 65 and 77 schools will benefit from these projects. There was a discussion about HECO and the Public Utilities Commission’s restrictions (including the 100kW limitation) and how this impacts the schools.
Committee Member Amy Asselbaye asked whether the photovoltaic systems will provide 100% of the school’s energy and if heat abatement has been part of the discussion. Carlson responded that it depends on the type of school (typically high schools use more energy than elementary schools), but generally photovoltaic systems will only provide about 25% or 30% of a school’s energy. Also, heat abatement, has not been part of the discussion, however, the audits that are being conducted will help the Department determine the schools’ electrical capacity. Retrofitting schools under the Ka Hei program will help reduce the cost of the heat abatement program.
Committee Member Amy Asselbaye asked how the schools were selected for the photovoltaic projects, whether the energy audits were conducted before the schools were selected, and whether the audits were done looking at additional cooling needs. Carlson responded that audits were completed for schools that received photovoltaic projects and that prior to the last few months additional cooling needs were not considered, but OpTerra has been flexible and has started looking at this as well as photovoltaic systems. Kealoha added that they are looking at a variety of options to address heat abatement, like adding cool roof coating, adding insulation, installing lights that produce less heat, and installing ceiling fans.
Board Member Margaret Cox, ex-officio asked about the cost of photovoltaic unit maintenance and expressed her concerns if schools would be burdened by the cost of maintenance. Carlson confirmed that because the photovoltaic systems under Ka Hei are leased, the companies are responsible for maintenance cost.
Board Member Patricia Halagao, ex-officio commented that she appreciates the educational piece of the Ka Hei project because teachers and students ultimately affect energy use and asked about continuing this piece of the project. Kealoha explained that teachers are receiving professional development on energy efficiency up front so they can plan lessons on the subject to complement the education piece.
Committee Vice Chairperson De Lima left the room at 12:10pm.
B. Student transportation audit results (2012-present)
Carlson and Tim Ammon and Bruce Solomon from TransPar Group, the Department’s transportation consultant presented on this agenda item. Carlson updated the Committee on the Student Transportation Reform Plan and the Get On Board Initiative, which is based on 18 months of the program’s timeline. In 2014-2015, the Department had a cost savings of approximately $7.0 million dollars. The main source of cost savings was renegotiation of Oahu contracts. A nationwide rise in diesel fuel prices did not affect Oahu, which was a surprise for the Department; however, diesel prices could end up impacting the bottom line. In sum, the audit conducted on this project demonstrated that the Department is making progress and that it remains on target with its goals.
The Student Transportation Reform Plan was rolled out on the island of Hawaii taking lessons learned and best practices from Oahu. The structure of the program was tailored to the island of Hawaii, which resulted in savings of approximately $2 million dollars. Next steps include, expanding to Maui and Kauai in 2017, establishing those contracts, and building the internal capacity of the Departments to sustain the program once the TransPar Group completes its work.
Committee Vice chair De Lima returned to the meeting at 12:18 p.m.
Board Member Cox, ex-officio, asked if placing seatbelts on the buses has been discussed and Tim Ammon responded that in Hawaii this has not been a topic of discussion, however, on a national level, this topic is discussed and it is often controversial. Studies have not shown having seatbelts on school buses provide greater safely to students. In the case of Hawaii, this topic becomes a policy question that transitions to a cost issue because vendors would have to install seatbelts. He clarified that school buses that serve special education students do have seatbelts.
C. Education’s heat abatement program and update on progress since September 1, 2015
Carlson and Amy Kunz, Senior Assistant Superintendent and Chief Financial Officer for Fiscal Services, updated the Committee on the progress of the heat abatement program. The Department is meeting twice a week and are updating their school list every week with the progress that is being made. Kunz and Carlson went over a spreadsheet which tracks the timeline for immediate responses and heat abatement measures. This is not an all-inclusive list and they continue to update the list, which is also available on the website.
Committee Member Lance Mizumoto commented that Board’s student representative, Brennan Lee, reported at the last Board meeting that the city bus has capacity issues when it comes to serving students who catch the city bus to and from school. Carlson said he will follow up with Board Student Representative Lee and get in touch with the city bus system to gather more information on this issue.
The Department has reached out to HSTA, the Governor’s Office, and teachers to gather feedback about the program and continue to develop their school priority list based on feedback from principals. Principals at the most impacted schools on each island are identifying their 10 hottest classrooms in which portable air conditioning units will be installed in the short term. So far, 127 portable air conditioning units have been installed, 123 more will be installed, and 400 are in transit.
The Department is also partnering with Hawaii 3Rs, a program that reimburses schools for fans they have purchased to help cool the classroom. They are also collaborating with the Department of Health to inform teachers and students about staying hydrated as they cope with the heat.
The Department is treating heat abatement with urgency and using its priority list to install air conditioning units in classrooms. They continue to send teams out to assess the electrical capacity of schools for long term air condition installations.
Committee Vice Chairperson De Lima commended the Department’s can-do attitude towards the issue. He also commentated that it took public outcry and record heat numbers for the Department to implement this program by utilizing funds that were earmarked for other projects identified through Capital Improvement Program (“CIP”) requests and he asked if the Department plans to request supplemental CIP funds.
Kunz responded that the Department submitted a formal request a few days ago to the Governor seeking permission to use $20 million dollars in CIP funds for heat abatement. Committee Vice Chairperson De Lima stated that he appreciates this effort and that the Department needs to implement short term and long term solutions; photovoltaic systems are part of the long term solution. He also asked Kunz when the Board can receive a comprehensive plan of the program’s long term implementation. Carlson responded that if state appropriations come through, the Department will write out a detailed breakdown of where and how the Department will utilize the $20 million dollars in the schools and classrooms to address the heat.
Committee Vice Chairperson De Lima asked if the Department would consider petitioning the PUC to request removal of the 100 kW limitation, to which Carlson responded that the Department cannot petition, but supports the efforts of others to do so.
Committee Member Mizumoto stated that he and the Department met with representatives from HECO to discuss ways in which they could collaborate to get PUC approval.
Before moving on to the action items, Committee Chairperson Chun called for public testimony. There was no testimony at this time.
A. Committee Action on recommendation concerning Department of Education’s operating budget: budget restriction implementation for Fiscal Year 2015-2016
Kunz and Brian Hallett, Director, Budget Branch, presented the Board with the Department’s 2015-2016 budget restrictions and recommendation on how to implement the Department’s restriction plan.
Kunz explained that that when she last presented to the Committee about the Department’s budget restrictions, they did not have complete information about this year’s budget, that only 25% of the annual allocation (less 10%) had been received to date, and a response from the State about a request to revise the calculation on discretionary funding pertaining to restrictions was pending. A week later the Department received a memo from the Governor’s Office about restrictions being placed on the Department’s 2015-2016 budget. The total restriction is equal to $14.7 million and the Department presented a recommendation on how to implement that restriction.
Committee Vice Chair De Lima asked about the Integrated Special Education database listed in the budget and Hallett clarified that this is an education database that is no longer in use, so the Department recommended taking this expense out of the budget.
Committee Vice Chair De Lima commented on the percentage of the Weighted Student Formula (“WSF”) line item that was being restricted and asked if this percentage could be taken out of utility expenses instead. Kunz responded that she does not recommend restricting utilities because of the extreme heat and heat abatement program will cause increases in usage. Also, the WSF line was related to an enrollment reserve so using this amount to fulfill the restriction would not negatively impact schools based on the amounts Principals used to determine their Academic and Financial plans, because actual enrollment was below projected.
Committee Vice Chair De Lima asked whether the vacant positions in EDN 200 and 300 were funded, whether they could be restricted, and what the cost savings would be if they were restricted. He asked whether restricting these vacant positions would be a viable alternative to restricting the WSF. Kunz responded that the vacant positions had been funded and her office would run the numbers to calculate cost savings but that a portion of the budget already accounts for vacancy savings. Vice Chairperson De Lima recommended that the Department calculate the amount saved by restricting EDN 200 and 300 vacant positions and restricting utilities to ensure that WSF is not restricted in any way.
Board Member Halagao, ex officio asked about the 100% restriction on Malama Learning Center and the basis for this restriction. Hallet clarified that the restriction is due to an Attorney General opinion, which concluded that there would be a constitutional violation because the organization was a religious institution and granting it state funds would amount to the use of public funds for secular education.
Committee Member Mizumoto commented that he is most concerned about the fact that the WSF restrictions constitute the largest cut and that smaller cuts were taken from EDN 200-300. Kunz explained that historically there has been an increase in EDN 100, that EDN 200 is a little above where the Department was in 2008, which is due to the fact that the money is being sent to the complex area level, and that EDN 300 is below 2008 levels. Committee Member Mizumoto clarified that he is looking for a way to reevaluate the current administrative model.
Board Member Halagao, ex-officio inquired about the Compact of Free Association (“COFA”) budget item, restrictions, and the original use of these funds. Kunz explained that the Department has flexibility in the use of COFA monies because COFA monies are a tax replacement meaning these monies are not restricted in their use. The Department is using these funds to benefit all students and not just COFA students. Kunz also confirmed that services COFA students received are not restricted or impacted as a result.
Committee Member Asselbaye gave further background on the origins on COFA funding, how it was to mitigate the impact that COFA migrants have on areas, and allocation of funds to compact states for healthcare and other services.
ACTION: Motion to direct the Department to remove restrictions on WSF from the budget restriction implementation plan and for the Department to come back to the next Finance and Infrastructure Committee meeting with a revised plan that does not contain any cuts to WSF (De Lima/ Mizumoto). The motion carried unanimously with all members present voting aye.
B. Committee Action on recommendations concerning Board Policy 500.9, Establishment of Complex Areas and Board Policy 500.10, Functions of District Offices
ACTION: Motion to adopt Board Policy 500.9, Establishment of Complex Areas, as described in the submittal dated September 15, 2015 (De Lima/Asselbaye). The motion carried unanimously with all members present voting aye.
ACTION: Motion to delete Board Policy 500.10, Functions of District Offices (De Lima/Mizumoto). Motion approved unanimously with all members voting aye.
Committee Chairperson Chun adjourned the meeting at 1:01 p.m.