DOE overlooks $6M loan

By Jennifer Hiller
Advertiser Education Writer

Hawai'i has missed out on a $6.1 million interest-free federal loan that could have helped address a backlog of repair and maintenance needs plaguing public schools.

	Help from others
	Public schools already receive some federal money for school repairs and maintenance, including:
•	$5 million in 2000 and $4.5 million last year from the Department of Defense. The money went to schools with at least 20 percent of students from military families.
•	$4 million this year for rural schools from the U.S. Department of Agriculture.
•	$212,000 from the Joint Venture Education Forum to help with the Hawai'i 3Rs Program, which lets schools match grants using volunteer labor and community outreach to help with work such as painting.
	This year the Joint Venture Education Forum, a partnership between the state's military community and the DOE, plans to provide:
•	$2 million for information technology needs, such as electrical upgrades and wiring
•	$1.3 million for repair and maintenance
•	$400,000 for playgrounds
•	$500,000 to Hawai'i 3Rs
•	$200,000 for work such as painting, playgrounds and air conditioning

State Rep. Chris Halford, R-11th (S. Maui, Keokea, Kihei) learned of the QZAB late last year — too late, he said, for the Department of Education to apply.

"We've conceded that money by not applying," Halford said. "It's just gone. It may be available next year. If it is, we have to try for it."

Hawai'i schools are struggling with a $621 million backlog of repair and maintenance. With more than 10,000 projects waiting, the state needs more than $180 million in classroom renovation alone, another $82 million in restroom renovation and $72 million in roofing.

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 tapped into the loan program.

"Tennessee, California, Texas ... most of the states have used all of their money," said Barbara Kent Lawrence of The Rural School and Community Trust, a nonprofit foundation that tracks school facilities issues across the country. "I don't know why Hawai'i hasn't used theirs. It doesn't make any sense to me."

With the QZAB, schools avoid paying interest on the loan. In return, financial institutions that lend the money get tax credits. Congress gave school districts and states the opportunity through the Taxpayers Relief Act of 1997, for school district with low-income populations.

Lawrence said Hawai'i could have a chance for another $6.1 million for each of the next three years. QZAB is a four-year federal program, of which only the first year has been given away. "So now the question is, can you get the next one?" Lawrence said.

With the state's economy suffering since Sept. 11, Halford and others at the Legislature have said the DOE needs to show that it is seeking as much federal and outside money as possible.

"The DOE does get some federal money, but the DOE along with other departments leave opportunities untapped," Halford said.

Rep. Brian Schatz, D-24th (Makiki, Tantalus), said legislators will try this session to improve state spending on school repair and maintenance and to push the DOE to find outside money. "I can guarantee you we're going to max out our federal monies," he said.

Several public schools officials have noted that there is no central person at the DOE in charge of seeking outside sources of money or coordinating grant applications. Others have suggested that the Department of Accounting and General Services pursue federal grants.

Schools chief Pat Hamamoto, who is reorganizing the department, has asked for a chief financial officer to manage the $1.4 billion budget. Whoever fills that position could help solve the problem of who should be in charge of seeking outside money, said DOE spokesman Greg Knudsen.

Lawrence said older Hawai'i schools also might be eligible for grants from the National Trust for Historic Preservation, which has recognized older neighborhood schools as among the nation's most threatened historic buildings.

The DOE's repair and maintenance backlog soared out of control in the 1990s, as maintenance allocations from the Legislature fell during the decade's economic downturn. The problem was aggravated by aging school facilities in need of more major repairs.

Gov. Ben Cayetano this week called for an unprecedented $255 million in school repair and maintenance spending, an amount that education officials say could change the appearance of Hawai'i's schools.

A 1999 report from the National Center for Education Statistics estimated American schools need $127 billion in repairs and maintenance, at an average cost of $2.2 million per school. The National Education Association nearly tripled that figure a year ago, putting a $322 billion price tag on the cost of needed school repairs, construction and technology.

Even when the economy is good, school repair and maintenance often fall to the bottom of the priority list for districts trying to improve academic performance and upgrade computers, Lawrence said.

"You've got three things happening," he said. "You've got more kids in American schools than any time in the nation's history. And you've got two sets of buildings: There are these good buildings that were built in the early 1900s, that were built for a 75-year use, that are now at the end of their life cycle, and you have these buildings constructed in the '50s and '60s that were built poorly and are also at the end of their lifecycle. Then you see the real cost of deferred maintenance."

Reach Jennifer Hiller at jhiller@honoluluadvertiser.com.