STATE OF HAWAII
BOARD OF EDUCATION
FINANCE AND INFRASTRUCTURE COMMITTEE
Queen Liliuokalani Building
1390 Miller Street, Room 404
Honolulu, Hawaii 96813
Tuesday, October 20, 2015
Grant Chun, Chairperson
Brian De Lima, Vice Chairperson
Hubert Minn ex officio
Margaret Cox, ex officio
Patricia Halagao, ex officio
Jim Williams, ex officio
Stephen Schatz, Deputy Superintendent
Amy Kunz, Senior Assistant Superintendent and Chief Financial Officer, Fiscal Services
Barbara Krieg, Assistant Superintendent, Human Resources
Dann Carlson, Assistant Superintendent, Facilities and Support Services
Tammi Chun, Assistant Superintendent, Strategy, Innovation and Performance
Alison Kunishige, Executive Director
I. Call to Order
The Finance and Infrastructure Committee (“Committee”) meeting was called to order by Committee Chairperson Grant Chun at 10:01 a.m.
II. Public Testimony on Board of Education (“Board”) Agenda Items
III. Approval of Minutes
Committee Chairperson Chun called for public testimony. There was no public testimony at this time.
Written testimony was also received and provided to the Committee Members. The following is a listing of the people that submitted written testimony before the testimony deadline.
|Carolyn Hayashi||Leilehua Alumni and Community Organization ||IV. B. Supplemental Budget ||Oppose|
There was one correction to the minutes – page 7, paragraph 2, the word “not” should be added to the last sentence so that it reads “that she does not recommend restricting utilities.”
IV. Recommendation for Action
ACTION: Motion to approve the Finance and Infrastructure Committee Meeting minutes of September 15, 2015, as amended (Mizumoto/De Lima). The motion carried unanimously with all members present voting aye.
A. Committee Action on recommendation concerning Board of Education Policy 303.12 Commercialism
Tammi Chun, Assistant Superintendent, Strategy, Innovation and Performance, presented that Board Policy 303.12, Commercialism currently states that the display of logos or endorsements of businesses on school facilities or properties is not allowed. Schools have asked for clarification on the extent to which they are allowed to recognize businesses using things like banners, shirts, and plaques. The Department is proposing revisions to the policy, which would encourage more partnerships with organizations in the community and provide more opportunities to recognize them.
ACTION: Motion to recommend that the Board adopt the revisions to Board Policy 303.12 Commercialism, as described in the submittal dated October 20, 2015 (Mizumoto/De Lima). The motion carried unanimously with all members present voting aye.
B. Committee Action on recommendation concerning the Hawaii State Public Library System’s operating budget: budget restriction implementation for Fiscal Year 2015-2016
Keith Fujio, Special Assistant to the State Librarian, reported that the Hawaii State Public Library System (“State Library”) was subject to a 10% executive budget restriction. They requested that 5% of the executive budget restriction be lifted; this request has not been formally approved, but it looks promising. The State Library will address the remaining 5% restriction by using funds allocated to vacant positions.
ACTION: Motion to recommend the Board approve the budget restriction implementation plan for the Hawaii State Public Library System restrictions as described in the submittal dated October 20, 2015 and authorize the state librarian to make adjustments as authorized by law (De Lima/Asselbaye). The motion carried unanimously with all members present voting aye.
Committee Member Lance Mizumoto mentioned that he had met previously with Stacey Aldrich, State Librarian, and Fujio and asked them that, going forward, that they look at their budget together with their strategic plan, ask themselves whether they can justify their footprint, and looking at plans for relocation, expansion or closing locations. Fujio added that that Aldrich is currently working on a master plan.
Committee Vice Chairperson Brian De Lima expressed his concerned with discussion of closing libraries and stressed that the strategic plan must support student achievement. He stated that the community should not be alarmed unnecessarily.
C. Committee Action on recommendation concerning the Hawaii State Public Library System’s supplemental operating budget and capital improvement program request for Fiscal Year 2016-2017
Fujio described the items for which the State Library is requesting supplemental funds, including approximately $213,000 for positions to staff the new Nanakuli library, $200,000 for underfunded operational expenses. They are also requesting $4 million in capital improvement program funds for health and safety and energy efficiencies, along with a $250,000 request to prioritize ADA compliance issues. He explained that the requests are a continuation of the previous year with no new initiatives.
Committee Member Jim Williams expressed his concerned with the minimal pay offered for the staff position at Naalehu library. Fujio stated that the specific position was difficult to fill due to the low full time pay, but that it was in compliance with the salary schedule for collective bargaining.
ACTION: Motion to recommend the full Board adopt the Hawaii State Public Library System’s supplemental operating budget and capital improvement program request for Fiscal Year 2016-2017 (De Lima/Mizumoto). The motion carried unanimously with all members present voting aye.
D. Committee Action on recommendation concerning Department of Education’s operating budget: budget restriction implementation for Fiscal Year 2015-2016
Amy Kunz, Senior Assistant Superintendent and Chief Financial Officer, presented a budget restriction implementation plan to the committee on September 15, 2015; the committee deferred action at that time and asked that the Department review and revise its recommendations. Kunz reviewed the programs’ approach to use a surgical approach to minimized impact on schools and avoid reductions in force because they can be highly disruptive, rarely have immediate results, and desired results are not guaranteed. Kunz recommended using a hiring freeze and other nonpayroll reductions with continued alignment with the strategic plan, but stated that there will be impacts. Restrictions will not allow leave management to reduce the leave balance backlog (which they have until 2020 to fix), and paraeductor training, information technology professional development, labor relation positions, teacher recruitment, and information technology (“IT”) systems (related to human resources, finance, websites, and security patches) will all be impacted.
Committee Vice Chairperson De Lima acknowledged the impacts that Kunz presented but wanted more information to better understand them. De Lima requested detail on specific impacts for the Board to make more comprehensive decisions on what should be funded or restricted. Board Member Margaret Cox, Ex officio and Committee Member Asselbaye agreed with Committee Vice Chairperson De Lima’s sentiment. Cox added that Kauai community members were curious as to why it took so long for doctors to receive reimbursement for workers’ compensation claims. After thanking Kunz for her work on the project, Asselbaye stated that IT training and systems are vital and the initiative should not be moving slowly. Asselbaye asked to see how the impacts on IT fits into the larger plan because it could set the Department back a little or a lot and she wanted greater detail.
Kunz assured the Board that she would work on getting specific impacts and the restriction numbers finalized. She stated that the impacts are linked and IT reduction was a risk, but they would be monitored. Kunz said that the Department would look through their budget to see what could be delayed and would bring firm impact statements to the Board as soon as possible.
Board Member Patricia Halagao, Ex officio concurred with the other members, but felt she received good information from Kunz. Board Member Halagao asked why 10% of Leilehua High School’s Grant in Aid (“GIA”) was restricted. Kunz replied that all GIA’s were restricted by 10% as a part of the budget restriction implementation.
Committee Member Mizumoto commended Kunz for her work and suggested that she elaborate on of some of the restrictions, particularly major items in EDN 200 and 300.
Kunz explained that there were savings of $2 million from the Hawaii Content and Performance Standards testing budget due to moving to Smarter Balanced Assessments. These will be one-time savings. Kunz stated that portions of the complex area budget will be impacted, including professional development, the International Baccalaureate program, STEM, Educator Effectiveness System, and other expenditures the Complex Area Superintendents are paying on behalf of schools. Kunz shared that 5% of their total budgets will be impacted, payroll and non-payroll.
Committee Member Mizumoto noted that there were some large restrictions in EDN 300 in enterprise systems and infrastructure services. Kunz stated that there was reduced or eliminated support in IT, but they are looking at maintenance and support contracts funded out of IT budgets to see if costs or upgrades can be deferred. Cloud computing, mobile technology, and automation of systems will not be able to progress.
Committee Vice Chairperson De Lima echoed his early statements about understanding specific impacts of the restrictions. De Lima introduced the possibility of deleting one area and using 100% of that budget towards other areas. De Lima understood that the Department is authorized by law to make many decisions and he wanted to be ensured that student achievement will not be impacted. De Lima appreciated the analysis but would like to understand exactly what is going to happen. He stated that there may be some relief after the Council on Revenue meets.
Committee Member Williams appreciated the Committee’s need for more information but wanted to keep the issue in perspective. Williams mentioned that restricted amounts are initiated by the Governor’s office and the Department can not avoid impact, only minimize it. Williams stated that the Committee should not view these restrictions as cuts but as temporary limitations until the revenue picture becomes clearer. Williams felt confident that management presented options that would have the least amount of impact.
E. Committee Action on recommendation concerning the Investigative Committee (a permitted interaction group pursuant to Hawaii revised Statues, Section 92-2.5(b)(1)) investigating the Department of Education’s Fiscal Year 2016-2017 supplemental budget findings and recommendations
Committee Chairperson Chun provided a brief history on the work of the Supplemental Budget Investigative Committee. Committee Vice Chairperson De Lima suggested the report be filed as outlined on the agenda. Committee Member Amy Asselbaye asked for clarification on the impact of filing a report. Committee Vice Chairperson De Lima clarified that filing a report means that the committee received it, is done with it and is taking no further action on it. Asselbaye expressed her concern regarding the wording of findings #3 and #4 and connecting accounting practices with student achievement.
Committee Vice Chairperson De Lima stated that the best option was to file the report and not take away from the strategic plan, which is the primary strategic document. The report was meant to be the reflection of a discussion at a point in time.
ACTION: Motion to file the report of the Investigative Committee (a permitted interaction group pursuant to Hawaii revised Statues, Section 92-2.5(b)(1)) investigating the Department of Education’s Fiscal Year 2016-2017 supplemental budget findings and recommendations (De Lima/Mizumoto). The motion carried unanimously with all members present voting aye.
F. Committee Action on recommendation concerning the Department of Education’s supplemental operating budget and capital improvement program request for Fiscal Year 2016-2017
Kunz presented on the Department’s supplemental budget proposal for the 2016-2017 fiscal year, which included a description on the school budget process, revenue projections, personal median income in the state, the amount spent on schools vs. school administrations. She also described how the budget is shaped - the Governor’s education plan, Board investigative committee, alignment with current resources, and the strategic plan. Kunz mentioned three major programs that were not granted second year funding: student transportation, utilities, and skilled nursing. Dann Carlson, Assistant Superintendent, Facilities and Support Services, added that the Capital Improvement Program (“CIP”) runs concurrently with the operating budget, but is handled in a separate capacity. The CIP facilities planning categories include condition, capacity, program support, and equity, a detailed breakdown of which was included in the submittal. Kunz commended the Department and Assistant Superintendents for substantial efforts in the budget process.
Committee Member Mizumoto asked about the timeline for increasing the Weighted Student Formula (“WSF”) to 75% from 55-58% in accordance with the Governor’s priorities. Kunz replied that the $10 million request for English Language Learners and a request for a 2% increase (about $16 million) will help to increase the WSF percentage. Kunz also said that there is work being done with the complex area support teams (“CAST”), which are currently funded from complex area budgets, but where complex area superintendents would need to work with principals to determine how the CAST supports each school and funding would be from EDN100. Kunz also stated that the Department is looking for ways to increase school-level funding and supporting school initiatives; one way it is doing this is by putting a workgroup together to see if there are categorical line items that principals can be responsible for expending.
Committee Member Mizumoto also asked whether there are financial incentives to keep good principals in schools. Kunz stated that these discussions occur all the time, the benefit to retaining principals, human resources issues and whether anything should be included in collective bargaining negotiations.
Board Member Halagao inquired if there were ways schools can use WSF money as an opportunity to recruit teachers. Kunz stated that the issue has been discussed and schools in hard to staff areas are prioritized. Halagao mentioned flipping the model as a suggestion to put the money at the school level and allowing schools to decide what they want. Kunz stated that there are examples of this, like the Achieve 3000 technology program, which schools could purchase using a state level negotiated purchase price, and that they are looking at other ways to do this. Hopefully these pilot programs can help to inform the Committee on Weights when it meets in a couple of years.
Board Member Cox mentioned that the collective bargaining agreement used to have financial incentives for principals, but that just giving money to principals does not work for everyone. You must include a discussion about how you help principals get their job done.
Committee Member Asselbaye thanked Kunz for the presentation and shared her questions about how the percentage - 75% for WSF - was determined and asked that Board members be more thoughtful about these things and focus on support for school initiated actions. Asselbaye wanted to know if there was money going back into teaching communities, because it takes a whole school system, not a principal alone, to generate success.
The main motion on the table, recommendation that the Board approve the Department’s supplemental budget, was discussed.
Committee Vice Chairperson De Lima stated that it was important to see that the majority of spending has been at the school level and not the administrative level. De Lima mentioned that the focus on student achievement and stricter, high standards are making a difference, but principals have to make hard decisions on what the school cannot fund. They cannot implement a broad-based education system at this time, because there is not enough money. De Lima stated that schools need to be given more resources. De Lima would like the legislature to support a higher budget.
ACTION: Motion to amend the original motion and increase EDN 100 by $12.8 million for school support devices and professional development related expenses (De Lima/Mizumoto). The motion carried unanimously with all members present voting aye.
Committee Member Asselbaye continued further discussion on the main motion. Asselbaye asked about the purpose of the request for $60,000 for Board travel. Committee Vice Chairperson De Lima explained that the funding was for Board travel to the neighbor islands; the Board recently amended its By-laws to include meetings on the neighbor islands. The request also included funds for broadcasting Board meetings. De Lima stated that the Board budget had been decreased tremendously but it is important for the Board to be able to travel to neighbor islands to make themselves available to the entire state. Committee Member Mizumoto agreed that the funds had been cut significantly and that there are costs for neighbor island meetings and late meetings that must be covered.
Committee Member Asselbaye stated that the Board has received feedback that the Board needs to be more open, but these additional funds for the Board were not in the budget and came up late in the process. She expressed her concern that this would be funded, but that other items, like teacher travel for professional development would not be funded. She also asked whether a portion of these funds could go towards technology to allow people to interact online instead of flying people over.
Committee Vice Chairperson De Lima stated that the supplemental funds for the Board needed to be viewed in context. The Board budget was significantly reduced from the time of the elected Board. If the Board did not request supplemental funds and ran out of money, it would need to get money from the Department. It would be irresponsible of the Board to not request for the actual costs, otherwise the Department would have to supplement the real cost of Board operations.
Board Member Halagao appreciated the focus on resources to schools but stated that support comes from central administration and suggested that the Committee consider approving funding requests for certain centralized systems of support. Board Member Halagao inquired about the principal engagement line item. Kunz clarified that the line item was for secondary principals forum and travel to neighbor islands.
Board Member Cox mentioned that it is important for neighbor island communities to feel like they can communicate with the Board and that neighbor island people can say that they are just as important as Oahu people. It is very important for the Board to have funds for inter-island travel so that people have the opportunity to talk to Board members. Technology can be used, but a lot people do not have it.
ACTION: Motion to amend the original motion to add principal engagement and leadership to the supplemental budget request ($135,000) (De Lima/Asselbaye). The motion carried unanimously with all members present voting aye.
Committee Member Williams asked whether describing the $10 million request for an increase for English Language Learners would preclude the Board as identifying it as a categorical element in the WSF calculation when implemented. Kunz replied that the Board would have the authority to make changes.
Committee Member Mizumoto left the room at 11:48 a.m.
Board Member Halagao expressed her concern with the backlog of investigations in the Civil Rights Compliance Office (“CRCO”) and Human Resources investigations and possible non-compliance. Kunz stated that CRCO and Human were asked to close investigations sooner.
Committee Member Mizumoto returned at 11:53 a.m.
Board Member Halagao raised the issue of a lack of funding for the Western Association of Schools and Colleges (“WASC”) accreditation. Kunz stated the Department has positions that help coordination efforts for WASC accreditation to make the process more efficient. Without resources, the accreditation process will not be as efficient or timely. Vice Chairperson De Lima stated that he could not support requesting additional positions at this point in time and suggested principals use a portion of the WSF money towards this issue. Kunz mentioned that the workgroup could look at this issue as a line item. Halagao mentioned the importance of School Community Councils and stressed the importance to support it.
ACTION: Motion to recommend the full Board adopt the Department of Education’s supplemental operating budget and capital improvement program request for Fiscal Year 2016-2017 as described in the submittal dated October 20, 2015, with amendments to include $12.8 million to add $12.8 million for school support devices and professional development related expenses and $135,000 for principal engagement and leadership and to make any adjustments as authorized by law (De Lima/Mizumoto). The motion carried unanimously with all members present voting aye.
Committee Chairperson Chun adjourned the meeting at 12:01 p.m.