Just as the state has been trumpeting its opening 13 public preschool classrooms well in advance of its Ready Keiki plan to open 50 to 80 by August, a bill is advancing to repeal the relatively new state School Facilities Authority and move all school construction back again to the state Department of Education, and the authority’s founding executive director has abruptly resigned.
Supporters of state Senate Bill 3328, introduced by a dozen senators led by Senate Vice President and Education Chair Michelle Kidani (D, Mililani Town-Waipio Gentry-Royal Kunia), say moving construction back into the DOE’s purview is best for efficiency, and the School Facilities Authority has run out of political will.
But some observers are asking whether the DOE is fit to take back new-facilities construction when it is already struggling with a backlog of more than $2 billion in construction projects. DOE has about $876 million obligated in contracts for ongoing projects, while another $893 million is set to lapse June 30 and another $331 million lapses in June 2026, according to a DOE website.
Even one of the bill’s introducers, state Sen. Donna Mercado Kim (D, Kalihi-Fort Shafter-Red Hill), expressed some skepticism about its proposed changes during a Feb. 7 hearing of the Senate Education Committee, of which Kim is vice chair.
“We moved (school facilities construction) from DAGS (state Department of Accounting and General Services) to DOE, and then from DOE to SFA because there was a lack of — I don’t know what it is that people were not happy with,” Kim said to DOE officials. “Now we go back and put it back into the DOE, which was where it was to begin with … and are we going to encounter similar (problems)?”
She added later, “What are we assured of? Because I don’t want to be here three years from now saying we’ve got to create another entity.”
High hopes were placed on the School Facilities Authority when the state agency was created by the 2020 Legislature to take on public school development, planning and construction for the 295-campus Hawaii DOE, the 13th-largest school district in the nation by enrollment.
A broad coalition of legislators and business interests at the time pushed for creating the independent School Facilities Authority, believing it would find innovative ways to expedite school construction, and generate revenue for education through public-private ventures and leasing of underutilized DOE properties.
While the Legislature gave new-construction duties to the School Facilities Authority, it left ongoing construction projects and repair and maintenance with the DOE. The new agency was placed under the DOE only for administrative purposes but has been intended to operate independently.
When the state’s Ready Keiki initiative to create universal preschool access for Hawaii’s 3- and 4-year-old children was announced in 2023, the School Facilities Authority was intended as the lead agency tasked with building the estimated 465 classrooms over 10 years (see accompanying box). Primary responsibilities also include building new schools, and housing for teachers.
However, the School Facilities Authority began with only a volunteer board headed by Alan Oshima, a former Hawaiian Electric Co. CEO and president, and no formal staff for about the first two years. That period also saw changes to a new governor, two successive new chairs of the Board of Education, a new state schools superintendent and multiple new leaders at the Legislature.
Chad Keone Farias was appointed the authority’s executive director by then-Gov. David Ige in 2022. The term was supposed to be for six years. Farias served in the role for about a year and eight months, and resigned at the end of January.
Farias declined Honolulu Star-Advertiser requests this week for comment. But in a Jan. 16 legislative briefing, he indicated frustration that the School Facilities Authority has come against persistent roadblocks to gain momentum.
Even basic needs for the agency, such as its own office space, still had not been provided by the state, he said. For instance, the DOE at one point offered a desk in the foyer of a building of Kaimuki, but that was too small for the growing SFA staff, and several possibilities found by DAGS and a real estate company fell through over a year and a half.
To questions from senators about why building projects and hiring more staff beyond the initial seven are taking longer than expected, Farias said it was tough to do while handling massive construction projects. “I’m working as hard as I can. But we’re writing RFPs (requests for proposals) and writing RFQs (requests for quotes) and project- managing some of our preschool classes. So that’s not an excuse. I take full responsibility for making that decision.”
Senate Bill 3328, which has no companion in the state House, would repeal the School Facilities Authority and “clarify” the DOE’s “authority to oversee public education facilities and real estate development.”
The measure would reorganize some operations in the DOE by establishing two new offices:
>> An Office of Facilities and Real Estate Development would be responsible for development, construction, repairs, maintenance and other operations related to public school facilities.
>> An Office of School Operations and Services would be responsible for school meals, transportation and other school- related services.
The bill also calls for the DOE to control an “educational facilities and real estate development special fund” that receives state funds, grants, gifts, endowments, donations, proceeds from sales of property, rents, impact fees and other types of payments. In the bill’s initial form, the fund could be administered by the department and used to fund any school development, planning, or construction, as well as department salaries.
The measure also would give the DOE responsibility for a pilot program for leasing of public school land.
Haruki and state schools Superintendent Keith Hayashi in their Feb. 7 testimony acknowledged the DOE’s shortcomings in school facilities but spoke in support of bringing new construction back into DOE’s fold.
“I think like many things, these adjunct agencies (such as SFA) are created because of some failure of an existing department not doing their job,” Haruki said. “There’s a lot of statutory overlap between what DOE is responsible for and what SFA is responsible for. So this helps clarify that and will eliminate that.”
He added that the first 11 Ready Keiki classrooms opened in 2023 actually “were essentially done by the DOE.”
Hayashi told lawmakers. “While we are aware that we have improvements to make in the area of facilities, the department has already started a comprehensive review of our facilities operations to make sure we serve our schools as effectively and cost-efficiently as possible. This internal review began late in 2023. And our overall aim is to index and manage land, facilities and funding resources available for public education, and to create an integrated and efficient process for putting those resources to use. I am definitely committed to this effort.”
Lt. Gov. Sylvia Luke, who spearheads the Ready Keiki preschool initiative, said Tuesday in a Star-Advertiser interview that she neither supports nor opposes the bill.
The SFA “continues to be a good concept,” Luke said, adding that the first 13 public preschool classrooms were built ahead of schedule and at about $400,000 apiece, far less than the original estimate of about $1 million.
But Luke also said she believes if new construction shifts back into the DOE, “I don’t think for our purposes it’s going to have that much impact one way or another.” She said the Ready Keiki initiative will “continue to hold whoever is involved with the construction and the build-out … to transparency, accountability, making sure that it’s timely, making sure we get the best bang for our buck.”
READY KEIKI PUBLIC PRESCHOOLS
The Ready Keiki state initiative aims to make early education accessible to all Hawaii children ages 3 and 4 by 2032, via a “mixed delivery” system of private and public preschools.
>> An estimated 465 classrooms needed for an estimated 9,300 underserved preschool-age children
>> $200 million appropriated via Act 257 of the 2022 state Legislature
>> $90.7 million released/committed
>> 13 classrooms completed and operational (9 on Oahu, 2 on Maui, one each on Kauai and Hawaii island)
>> 6 classrooms in construction (5 on Oahu, 1 on Maui)
>> 38 classrooms in “preconstruction” (25 on Oahu, 5 each on Maui and Hawaii island, 2 on Kauai, 1 on Molokai)
>> Expansion of Preschool Open Doors subsidies for private preschool tuition, to $50 million from $12 million
Source: ReadyKeiki.org, state Office of the Lieutenant Governor
