School officials unveil $705M wish list

Encouraged by the state’s recently upgraded credit rating and an overall strong economy, the Department of Education plans to seek bond funding for $705 million worth of capital improvement projects that include new classroom buildings to help alleviate crowding in West Oahu and new schools for the growing Kakaako and South Maui communities.

By comparison, the department requested from the Legislature $455 million in general obligation bonds for the 2016-17 biennium, and received a roughly $338 million appropriation.

“We really went in with the approach of, ‘Let’s ask for what we need,’” Dann Carlson, assistant superintendent for school facilities and support services, told the Board of Education’s Finance and Infrastructure Committee on Tuesday.

Carlson — whose branch oversees facilities at the DOE’s 256 schools, which are on average 61 years old — shared preliminary figures from the department’s capital improvement program, or CIP, budget for the fiscal year that begins July 1.

The list of projects includes new classroom buildings for Campbell and Kapolei high schools, which have been struggling to accommodate annual increases in enrollment. Carlson told the Honolulu Star-Advertiser that the $26.7 million request for the Campbell building is the department’s No. 1 priority.

Enrollment at Campbell High in Ewa Beach, the state’s largest school with 3,125 students, is expected to increase by 90 to 100 students a year over the next five years. The project, which would add 30 classrooms, received partial funding in the last legislative session, which officials said at the time would set back the project about a year.

“We are at the point where we’re ready to construct,” Carlson said.

The CIP budget also includes $123 million to move ahead with construction of a long-planned high school campus in Kihei on Maui.

“We are at the point in Kihei as well where we’ve done all the infrastructure-type stuff. We really need a lump sum,” Carlson said. “We keep getting little bits here and there, but it’s really hard to build any kind of vertical structure without getting a good lump sum.”

Another request is $56 million for a proposed elementary school for Kakaako, listed as Pohukaina Elementary.

The Hawaii Community Development Authority, a state agency regulating development in Kakaako, earlier this year rejected a developer’s tentative plan to include a public elementary school within a proposed affordable rental tower project on state land in Kakaako. The addition of the school, state officials contended, deviated from the original request for competing private development bids.

Carlson said oversight of the proposed tower is being transferred to the Hawaii Housing Finance & Development Corp., another state entity.

“We are working with both parties to come up with a solution, but it’s too early to say what that solution will be,” he said. “We’re still planning on ways to meet the needs for that community.”

Funding requests also are being made for new classroom buildings at Kealakehe Elementary in Kailua-Kona ($12 million) and Lahaina Intermediate ($1.5 million); a new science and classroom building at Leilehua High ($31 million); and campus improvements at Ilima Intermediate ($20.5 million) and Farrington High ($44 million).

“We do think it’s an opportune time right now just given the economy and our bond ratings. This is all obviously funded at the state level but through bonds,” Carlson said.

Under Gov. David Ige’s administration, the state had amassed an unprecedented $1 billion general treasury surplus at the close of the last fiscal year in June, thanks to an overall healthy economy and increased tax collections along with spending restrictions imposed on state departments.

Ige last week touted in a news release that the state’s general obligation credit rating had been upgraded to its “highest ever bond ratings and the strongest credit position the state has ever achieved in its history.” (Credit-rating agencies evaluate the financial health of states to determine their ability to repay the principal and interest on bonds. The higher the rating, the lower the borrowing cost to taxpayers.)

Most Board of Education members voiced support for the capital improvements plan, which was up for discussion, not approval.

“While I realize that $700 million is a bold request, personally, I couldn’t be more in support,” BOE member Bruce Voss said. “We know the age of the facilities, we know the condition. In my mind, now’s the time to invest. … We know from numerous studies that money spent on local contractors, local employees — that’s among the best money the state can spend in terms of recirculating into the economy.”

Kenneth Uemura, vice chairman of the board’s Finance Committee, asked if Carlson’s staff was capable of managing all the work should the funding come through.

“Can your department handle that, or will some of these projects not get done?” Uemura asked.

“I’m confident we can get through this,” Carlson replied. “We probably need a lot more than $700 million — we definitely do. But, again, we tried to do it in a realistic manner knowing the current capacity that we do have. It is why that number is not higher.”

The DOE next month will seek approval from the full board once it finalizes its operating and CIP budget requests. The budgets will be submitted for consideration in the governor’s proposed state budget that will then head to the Legislature.