Posted on: Friday, February 1,2002
Legislators pursue loan for public school repairs
By Jennifer Hiller
Advertiser Education Writer
Amid controversy over a possible missed opportunity, legislators have renewed an effort to secure a $6.1 million interest-free federal loan that could help address a backlog of repair and maintenance at Hawai'i public schools.
The Advertiser reported on Monday that Hawai'i missed out on the money last year even as the school system struggled with a $621 million backlog of repair and maintenance. The story generated considerable dismay at the Department of Education, which now says that lawmakers were to blame.
Meanwhile, Sen. Norman Sakamoto, D-16th (Moanalua, Salt Lake), chairman of the Senate Education Committee, has submitted a bill that would authorize the DOE to secure the federal loan now.
Without the help of the Legislature, the DOE does not have the authority to issue bonds or secure loans.
Sakamoto introduced a similar bill last year. It passed the Senate Education Committee unanimously, but was never discussed by the Senate Ways and Means Committee and died there.
"We thought this would be a way for us to get some money to do some creative things," said Francine Grudzias, educational administration services director at the DOE. With little money in recent years to address maintenance issues, the more than 10,000 projects waiting on the state's to-do list often sit untouched for years or even decades.
Still, the bill died last year.
"We testified last year and did the best we could to try to convince them, obviously not successfully, that this was a good thing for the state," Grudzias said.
21 other states apply
At least 21 other states have applied for a share of $400 million available through Qualified Zone Academy Bonds, a loan program administered by the U.S. Department of Education and Treasury Department. "If we don't use the money designated for Hawai'i, I believe it goes away entirely or is up for grabs by other states," Grudzias said.
With the loan, the DOE said it would use the former National Guard facility at 475 22nd Ave. and turn it into a high-tech learning center for children. The building houses some DOE departments, but is about 40 years old and needs major renovation to accommodate computersfor the technology program.
Vickie Kajioka, advanced technology specialist at the DOE, said the center would have the advantage of being a resource that students and teachers across the state could tap. Instead of concentrating on only a few schools to upgrade technology, the center could serve numerous campuses.
Kajioka said the technology center would be used as a kind of virtual hub for students and teachers. Internet access and distance learning techniques could bring students from across the state together. For example, science experiments and other projects could become a collaboration across classrooms.
"The idea is to build a system that would be collaborative," Kajioka said. "People could not only get information but share and exchange ideas."
Hearing on loan bill today
An Education Committee hearing on the bill to authorize the loan will be held at 1 p.m. today in state Capitol conference room 212.
With QZAB, schools avoid paying interest, which can often equal 50 percent of the original bond. They can also "bank" the loan, let it earn interest, and end up paying back even less than the $6.1 million. In return, financial institutions that lend the money get tax credits. Congress gave school districts and states the opportunity to use the QZAB program through the Taxpayers Relief Act of 1997.
Although the DOE does receive other kinds of federal money for repair and maintenance and gets about 9 percent of its total budget from the federal government, it has not been able to tap into the QZAB loan program.
State budget director Neal Miyahira said the QZAB program could prove to be a hassle for the state, though. The loan requires that money be spent only in federal empowerment zones or areas where 35 percent or more of the children qualify for the free and reduced lunch program. The DOE also has to come up with 10 percent in matching money or "sweat equity" volunteer labor.
"I don't know how this thing is going to work," Miyahira said. "If the DOE is going to solicit this, of course we'll work with them, but someone is going to have to take the bull by the horns and come up with the 10 percent. It has to all be within the federal parameters. This requires a lot of effort to get going."
Miyahira said that at $6.1 million, the amount of the loan might not be high enough to justify the cost and the time of administering it. "Somebody needs to take ownership of this and make this work," he said. "It's not going to magically happen."
Miyahira also said that local lenders have been lukewarm when approached about QZAB.
Reach Jennifer Hiller at jhiller@honoluluadvertiser.com or 525-8084.
