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The Honolulu Advertiser
Posted on: Thursday, January 26, 2006

Lingle to release $100M for DOE

By Beverly Creamer
Advertiser Education Writer

Despite a public dispute over how much money is available to repair schools, officials with the Lingle administration and the Department of Education have in the past week found ways to make an additional $100 million available for much-needed fixes.

That doesn't mean that either is going to back away from public statements made over the past week with DOE defending its use of public money for schools as the way the repair pipeline works, and Gov. Linda Lingle's budget office claiming that hundreds of millions are still unspent.

But in a meeting this week, budget director Georgina Kawamura told DOE officials that the governor is willing to release what is essentially the final $100 million appropriated by the Legislature last year for the next lineup of projects, including items on the school repair and maintenance backlog.

And yesterday, Lingle released $39.32 million appropriated by the Legislature last year for school repairs and maintenance part of the first $100 million of last year's appropriation.

One of the schools that will benefit is Aliamanu Elementary, which is slated to receive more than $5 million, even though it won't be enough to address all of its needs.

"I wish they wouldn't play politics with this," said Aliamanu principal Jeannie Sugimoto, who has watched for 18 years as her school progressively deteriorates, with cracking walls, sinking floors and crumbling ceilings.

"We've been waiting for this (repair and maintenance money) for a long time."

In her State of the State speech this week, Lingle said the DOE has $570 million for repairs and maintenance. Schools Superintendent Patricia Hamamoto replied that virtually every last dime of what the governor has released since 2003 has been spent, committed, or attached to a specific project.

EXPLANATION SOUGHT

The public sniping has done little to enlighten the public and public officials on an issue that could play an important role in what the DOE is allotted this year by the Legislature for school capital improvements to launch new projects and continue repairing aging schools.

And yesterday, the Board of Education called on Kawamura and DOE officials to explain the dispute that has publicly pitted the department against the governor and some Republican legislators as they argue over whether or not the DOE is sitting on $570 million worth of repair and maintenance funds while claiming that a backlog of work needed tops $500 million.

"Since Act 51 (the Reinventing Education Act), we have been working closely with your staff, and I'm committed to improving this process," Kawamura told BOE members.

With the public battle, board members wanted explanations: How much money had the governor withheld? How much had the governor allotted? How much had the department spent? How much was encumbered? How much was left unencumbered, but tied to projects?

"I'm not interested in blaming someone," said board member Darwin Ching. "Instead of backbiting each other ... I want to know what we can do to prevent delay. And I hear you say people are working closer together," he said to Kawamura as she nodded.

The board wanted Kawamura to understand that all the issues of design, procurement and bidding take time to move money through the pipeline. Kawamura wanted board members to understand the responsibility she carries to deal with funding issues, bond debt, the intricacies of floating more general obligation bonds, and the rest of what goes into financial management for the entire state.

"Our responsibility is for cash management to cover expenditures of your department as well as all other departments," she said.

NO CONSENSUS YET

In a nutshell, the two sides still disagree on $508 million the amount was reduced this week by Kawamura from her previous estimate of $570 million.

According to Hamamoto, all of the $344 million in appropriations allotted to the department by the governor's office since 2003 has been linked to projects and has either been spent, is waiting to be spent when contracts are complete, or is waiting for projects to be designed and bid.

That means: $114 million has already been spent; $81 million is committed to ongoing contracts that require payment on completion; and $149 million awaits completion of design and bid proposals but is already earmarked.

The remaining $213 million has not yet been released by the governor although the new $100 million Kawamura has told the DOE she will release would reduce that amount.

"The money appropriated has been used to fund projects as they're ready to go," said department spokesman Greg Knudsen. "The additional money we're seeking is for additional projects that are needed. It will be encumbered. There will not be anything lost."

But according to Kawamura, everything but the $114 million the DOE has already spent should be considered available. And that includes $65.4 million appropriated for the 2006-07 fiscal year, even though that money cannot be released until July 2006.

But Kawamura also said she had urged department officials especially to hurry and "encumber" or commit $149 million that has been unspent but is tied to projects even though those projects are still either in the design or bid phase.

"When we go to release the next $100 million, we don't want to see that growing," she said, commenting that state money should not be idle.

COMPLICATED PROCESS

Moving projects forward is a lengthy, complex process, and includes anywhere from six months to a year or more for design before a project can go out to bid in accordance with state procurement laws. Then it can take several months before a contractor is ready to begin construction. Generally the Legislature allows three years for money to be used before it lapses.

DOE budget specialist Brian Hallett gives the example of the new Oceanpointe Elementary School in 'Ewa Beach, which will cost $27 million to build. Half of the school's budget $14 million has been expended, said Hallett, but the other half has not, so falls into the encumbered category, meaning the money has not yet been spent but is committed to that project.

In general it takes 18 to 24 months to complete any school building project. It means that money must constantly funnel into the pipeline to keep everything going, said a department representative.

But the Department of Education has been looking at ways to speed the process since it gained control of its own projects from the Department of Accounting and General Services beginning last July.

This year the department has asked for a supplemental CIP appropriation of $368 million, while the governor is asking for $90 million. Superintendent Hamamoto has said if the Legislature gives the department the $160 million supplemental it wants for classroom renovations in particular, and $100 million more strictly for repairs, that could reduce the backlog substantially.

Staff writer Loren Moreno contributed to this report. Reach Beverly Creamer at bcream er@honoluluadvertiser.com or 525-8013.

Reach Beverly Creamer at bcreamer@honoluluadvertiser.com.

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