Funds backlog of repair and maintenance for schools through GO bonds through 2010; establishes two special funds; specifies how school repair and maintenance moneys are to be prioritized and allocated; establishes and funds eighteen school business and fiscal officers; funds additional positions and equipment for DAGS to coordinate school repair services; authorizes issuance of GO bonds. Allocates moneys for physical plant to the schools. Exempts DOE from procurement code if procurement is less than $50,000 and is for physical plant. (SD1)

A BILL FOR AN ACT

SECTION 1. The legislature finds that a key component in improving public education in Hawaii is the provision of school facilities that support and enhance the academic programs. While the State has invested over $1,700,000,000 in the construction of school facilities, repair and maintenance services for these facilities have been curtailed in recent years due to the poor economic conditions.

In 2000, economic projections for Hawaii began to show positive signs, and the legislature passed Act 239, Session Laws of Hawaii 2000, which appropriated $30,0000,000 for repair, maintenance, and improvement projects for the department of education in 2000-2001. Act 239 is a significant first step in addressing the State's long neglected public school facilities, but sustained improvement will require a long term solution to both the current backlog and preventative repair and maintenance services.

The repair and maintenance backlog alone for public school facilities was estimated at $600,000,000, as of June 30, 2000. While the State provided a total of $51,900,000 for school repair and maintenance in 2000-2001, the inconsistencies in annual funding have made it impossible to undertake needed repairs on a systematic basis.

According to both the American Public Works Association and the National Association of Higher Education Facilities Officers, a minimum of two to four per cent of a physical plant's replacement cost should be allocated annually for repair and maintenance. Using the conservative two per cent figure, this would equal $51,800,000, per year for Hawaii's public schools, based on 18,500,000 square feet of school facilities and a replacement cost of $140 per square foot.

The overall purposes of this part are to fund the $600,000,000 repair and maintenance backlog over a ten-year period, through general obligation bonds in the amount of $60,000,000 per year; and to fund normal, on going school repairs and preventive maintenance through general fund appropriations. Specifically, this part:

It is not the intent of this Act to undermine the authority of schools to prioritize and approve their repair and maintenance needs pursuant to section 302A-1505, Hawaii Revised Statutes, nor to interfere with any partnerships schools have formed with community groups, volunteers, and businesses to obtain donated and discounted repair and maintenance services and materials. The legislature remains committed to the principles of local control and decentralized decision making.

SECTION 2. Chapter 36, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§36-    State educational facilities repair and maintenance special fund. (a) There is created in the treasury of the State the state educational facilities repair and maintenance special fund, into which shall be deposited a portion of all general excise tax revenues collected by the department of taxation under section 237-31. The special fund shall be used solely to eliminate the backlog of school repair and maintenance projects, including the repair or replacement of fixtures, furnishings, and equipment, existing on June 30, 2000. Expenditures from the special fund shall be subject to sections 37-31, and 37-33 to 37-40. Appropriations or authorizations from the special fund shall be expended by the comptroller.

(b) The department of education, with the assistance of the department of accounting and general services, shall review the existing condition of school facilities, and establish specific vision plans for each school complex, based on current repair and maintenance requirements and overall repair and maintenance priorities.

(c) Criteria used to establish current repair and maintenance requirements may include but not be limited to:

(d) Criteria used to establish overall repair and maintenance requirements may include but not be limited to:

(e) The expenditure of funds for any project with an estimated total cost of less than $100,000 shall be exempt from chapter 103D; provided that:

For all projects, the comptroller shall develop a strategy for the efficient and cost effective use of government and private-sector workforces and consider increased flexibility through public-private partnering, design build options, cost plus, job order contracts, performance based contracts, and any other means to improve communications and accelerate repairs while preserving the quality of the repairs.

(f) The comptroller shall ensure that all repair and maintenance projects achieve maximum cost efficiency by emphasizing functional or performance criteria, uniformity of design, and commonality of products, and by avoiding unique or custom requirements that increase costs. The comptroller shall develop project specifications based on qualified products lists and standard commercial products.

For the purposes of this subsection:

"Qualified products list" means an approved list of goods, services, or construction items described by model or catalogue numbers, which, prior to competitive solicitation, the State has determined will meet the applicable specification requirement.

"Standard commercial product" means a product or material, in the normal course of business, is customarily maintained in stock or readily available by a manufacturer, distributor, or dealer for the marketing of the product.

This subsection shall not apply to any school facility designated a historic property pursuant to section 6E-5.5.

(g) The comptroller shall submit an annual report to the legislature, which shall include a financial statement of the special fund and the status of repair and maintenance projects undertaken pursuant to this section, no later than twenty days prior to the convening of each regular session. Expenditures for repair and maintenance projects undertaken pursuant to this section shall be posted electronically on the Internet by the department of accounting and general services within thirty days of each project's completion.

(h) This section shall be repealed on July 1, 2010; provided that the comptroller shall transfer to the credit of the state general fund, any unencumbered balance remaining in the state educational facilities repair and maintenance special fund, prior to July 1, 2010.

§36-    School physical plant operations and maintenance special fund; maintenance schedule. (a) There is created in the treasury of the State the school physical plant operations and maintenance special fund, into which shall be deposited a portion of all general excise tax revenues collected by the department of taxation under section 237-31; provided that the minimum annual allocation to the fund shall be the result of the following formula:

The special fund shall be used solely for school repairs and preventive maintenance projects scheduled after June 30, 2001. Expenditures from the special fund shall be subject to sections 37-31, and 37-33 to 37-40. Appropriations or authorizations from the special fund shall be expended by the comptroller.

(b) Every new or renovated school facility constructed after June 30, 2001, shall include a preventive maintenance schedule prepared by the architect or engineer of the facility or the capital improvement project. The maintenance schedule shall include a description of each major component of a facility or capital improvement project and the component's maintenance, the starting date for a maintenance project, whether or not the maintenance project has a recurring cost, the current cost of the maintenance project, the future cost of the maintenance project, the useful life of the facility or capital improvement project, the present value of normally scheduled maintenance for the useful life of the facility, the adjusted life of the facility or capital improvement project, and the replacement date of the facility or capital improvement project.

(c) Moneys in physical plant operations and maintenance shall be allocated according to departmental school districts based on:

(d) The expenditure of funds made under this Act for any project with an estimated total cost of less than $100,000 shall be exempt from chapter 103D; provided that:

(e) The comptroller shall submit an annual report to the legislature, which shall include a financial statement of the special fund and the status of school repair and preventive maintenance projects undertaken pursuant to this section, no later than twenty days prior to the convening of each regular session. The department of accounting and general services shall post the following reports electronically on the Internet and update them quarterly:

SECTION 3. Chapter 302A, Hawaii Revised Statutes, is amended as follows:

1. By adding four new sections to be appropriately designated and to read:

"§302A-A Six year program and financial plan for school repair and maintenance. (a) The department of accounting and general services, in consultation with the department of education, shall prepare a six-year program and financial plan which shall be:

(b) The department of accounting and general services, in consultation with the department of education, shall develop and maintain a facilities physical analysis report and a facilities financial analysis report for each public school. These reports shall be posted electronically on the Internet.

§302A-B District business and fiscal officers. (a) The department shall establish eighteen permanent full-time equivalent business and fiscal officer positions; provided that each school district shall be assigned one business and fiscal officer position, with the remaining positions to be assigned based on need; and provided further that the business and fiscal officer:

(b) Departmental school district business and fiscal officers shall be responsible for:

§302A-C Donated repair and maintenance services and materials. (a) The department may accept donated repair and maintenance services and materials, including money to purchase these services and materials, on behalf of the department, individual schools, or school complexes. Donations that meet or exceed current educational specifications, if applicable, shall be deemed acceptable in instances where the donations enhance the school environment or improve the administration of school programs.

(b) The department shall establish and adopt criteria, pursuant to chapter 91, for the acceptance of donated services and materials, including a determination as to whether the donated services and materials meet minimum educational specifications.

(c) For the purposes of this section, "donated repair and maintenance services and materials" includes discounted repair and maintenance services and materials.

(d) The private source making a donation shall not be liable upon any claim for injury arising from the donated or discounted services or materials; provided that this subsection shall not affect the responsibility or liability of manufacturers of defective products nor shall it reflect the responsibilities of negligent persons who cause dangerous conditions that result in injury.

(e) The department of accounting and general services shall establish criteria and procedures for the awarding of credits to a contractor's bid price or work experience for any services donated to a school under this section. When soliciting proposals and awarding a contract for repair and maintenance services, the department of accounting and general services shall determine the dollar value of any public school donated services performed by the bidding company or its employees during the three hundred sixty-five days preceding the submittal of the bidding company's proposal. The estimated value shall be deducted from any contract price submitted by the bidding company when determining the award of a contract, chapter 103D to the contrary notwithstanding.

When considering proposals for performance based contracts, the department shall deem services donated by a bidding company as qualified work experience.

§302A-D Federal/state cooperation authorized. The department may enter into agreements with any federal agency to construct, repair, or renovate Hawaii public schools on military bases and elsewhere in the State using federal funds, subject to the department's educational specifications and standards for facilities. The department shall cooperate with any federal agency in order to carry out this section."

2. By amending section 302A-1504, subsection (a), to read:

"(a) The department shall establish school-level minor repairs and maintenance accounts for the use of each public school, which shall not exceed [$8,000] $25,000 per school. The accounts shall be comprised of funds appropriated to the department for school-level minor repairs and maintenance and shall not be used for any other purpose, nor shall any other funds be deposited into the accounts. The department shall allocate funds based on the number of students at the school multiplied by a factor which recognizes the age and condition of the school."

3. By amending section 302A-1505 to read:

"[[]§302A-1505[]] Prioritization of repair and maintenance. (a) Each school shall meet with the department of accounting and general services on an annual basis to advise the department of school needs. Before any repair and maintenance projects for the upcoming fiscal year are implemented, each individual school administration shall prioritize and approve its repair and maintenance needs, and approve the scope of the implementation plan for the individual projects. After schools have prioritized their repair and maintenance projects, a statewide list shall be prepared and reviewed by the department of accounting and general services, and reviewed and approved by the department of education; provided that the department may make adjustments among schools and districts. Each school repair and maintenance priority listing shall be [approved by the individual school administration and] submitted by the department of education to the department of accounting and general services for implementation. Each listing shall be posted electronically on the Internet. The department of accounting and general services shall implement the school repair and maintenance program in accordance with the priorities set forth by the [individual school administration.] department.

(b) Prior to meeting with the department of accounting and general services to advise the department of a school's repair and maintenance needs, the school's principal and the business and fiscal officer shall consider the recommendations made by the school/community-based management council, if there is such a council at the school; or the local school board, if the school is a new century charter school. If there is no school/community-based management council or local school board, the school's principal shall appoint a standing committee composed of a teacher, a member of the support staff, a parent, a student, and a community member.

(c) In prioritizing a school's repair and maintenance needs, the department of accounting and general services, the school's principal, and the business and fiscal officer shall consider the availability of donated and discounted repair and maintenance services and materials that will be provided by community groups, volunteers, and businesses."

SECTION 4. Section 237-31, Hawaii Revised Statutes, is amended to read as follows:

"§237-31 Remittances. All remittances of taxes imposed by this chapter shall be made by money, bank draft, check, cashier's check, money order, or certificate of deposit to the office of the department of taxation to which the return was transmitted. The department shall issue its receipts therefor to the taxpayer and shall pay the moneys into the state treasury as a state realization, to be kept and accounted for as provided by law; provided that:

SECTION 5. The director of finance is authorized to issue general obligation bonds in the sum of $60,000,000, or so much thereof as may be necessary for fiscal year 2001-2002, and the same sum, or so much thereof as may be necessary shall be deposited into the state educational facilities repair and maintenance special fund.

SECTION 6. There is appropriated out of the state educational facilities repair and maintenance special fund of the State of Hawaii the sum of $60,000,000, or so much thereof as may be necessary for fiscal year 2001-2002, solely to eliminate the backlog of school repair and maintenance projects existing on June 30, 2000.

The sum appropriated shall be expended by the department of accounting and general services; provided that the comptroller shall develop and implement a strategy for the efficient and effective use of government and private sector workforces to ensure that the State receives the best value for its money, and to avoid the creation of shortages and surpluses in the marketplace by over-purchasing in one segment and under-purchasing in another segment of the marketplace at any given time.

SECTION 7. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2001-2002, to establish eighteen permanent full-time equivalent business and fiscal officer positions.

The sum appropriated shall be expended by the department of education.

SECTION 8. There is appropriated out of the general revenues of the State of Hawaii the sum of $168,704, or so much thereof as may be necessary for fiscal year 2001-2002, for the department of accounting and general services to coordinate statewide department of education repair requirements and to work with the department of education to identify, prioritize, and maintain historical repair records, as follows:

Engineer V $41,772

Engineer IV $38,628

Building Construction

Equipment 8,000

The sum appropriated shall be expended by the department of accounting and general services.

SECTION 9. There is appropriated out of the general revenues of the State of Hawaii the sum of $350,000, or so much thereof as may be necessary, for fiscal year 2002-2003, to allow the department of accounting and general services to contract consultant services to integrate repair and maintenance databases that exist within the department's central services and public works division as well as the department of education. Presently, at least five independent databases exist, and the integration of data is vital in obtaining timely information, managing information, making decisions, posting on the Internet, and maintaining the highest possible accountability over the expenditure of funds.

SECTION 10. The director of finance is authorized to issue general obligation bonds in the sum of $34,800,000, or so much thereof as may be necessary for fiscal year 2001-2002, and the same sum, or so much thereof as may be necessary shall be deposited into the school physical plant operations and maintenance special fund to be issued to the extent possible for the purposes of the fund and for the use of general obligation bonds for those purposes.

SECTION 11. There is appropriated out of the school physical plant operations and maintenance special fund of the State of Hawaii the sum of $34,800,000, or so much thereof as may be necessary for fiscal year 2001-2002, solely for school repairs and preventive maintenance projects scheduled after June 30, 2001, appropriated to the extent possible for the purposes of the fund and for the use of general obligation bond funds for those purposes.

The sum appropriated shall be expended by the department of accounting and general services in accordance with this Act.

SECTION 12. In codifying the new sections added to chapter 302A, Hawaii Revised Statutes, by section 3 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in the new sections' designations in this Act.

SECTION 13. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 14. This Act shall take effect on July 1, 2001.