Amid skepticism, lawmakers at a briefing Friday appeared to cautiously welcome an unconventional University of Hawaii plan to begin to deal with a nearly half-billion dollar backlog in repairs and maintenance at its campuses.
The facilities backlog, which is at the center of the UH’s growing financial crisis, inspired what turned out to be a five-and-a-half-hour briefing for legislators at the state Capitol Friday. A dozen or so university administrators pitched — and defended — the university’s supplemental budget requests to Senate and House higher education committees. Their goal was to make sure that UH can pay for expenses that include already-negotiated faculty salary increases and base operating costs at the beleaguered West Oahu campus.
The plan, drawn up by UH, seeks to plug a $487 million hole through a creative financing plan, but it requires the support of state lawmakers who must allocate millions of dollars in the next supplemental budget to make it a reality, university administrators explained.
UH is requesting nearly $54 million for operations, $14 million of which would restore salaries that were cut during the recession and then add $19.5 million in annual 3 percent raises already negotiated with the faculty’s union for fiscal years 2014 and 2015.
The governor’s supplementary operational budget request counters by seeking $37.5 million, including $33.5 million for salaries, along with $54 million in capital improvement funds.
Any operational funds would supplement the $7.5 million that the Legislature already set aside for the UH this year in its original two-year budget. This notably small allocation was intended in part to force the university to reorient its spending in the aftermath of several financial debacles, including the “Wonder Blunder” and mismanaged construction at the West Oahu campus.
Lawmakers didn’t allocate any money to UH this year to reduce its facilities backlog, so a wide array of building repairs and maintenance — mostly at the 100-year-old flagship Manoa campus — simply isn’t being addressed.
University officials repeatedly justified their funding requests on Friday by citing the repair-and-maintenance backlog, which goes back decades.
School administrators hope to chip away at that backlog with a plan that would take tuition currently being used to pay for salaries and instead invest it in revenue bonds to help fund campus maintenance and improvements. To make that plan work, the Legislature would need to help fork out tax dollars for the salaries.
University representatives described the backlog as an overwhelming burden that is exacerbated by under-staffing that ultimately undermines the quality of education.
Addressing the backlog, UH officials argued, would save money on utilities too, by modernizing old electricity-guzzling facilities to make them more efficient.
“They (the students) deserve facilities that support modern learning, modern laboratories, modern classrooms,” said UH Interim President David Lassner. “It’s not about chairs with arms and chalkboards anymore.”
Rep. Isaac Choy, who heads the House’s higher education committee and who has long criticized the university for its financial management, led Friday’s briefing, grilling the campus officials on their priorities and on how they intend to clean up spending.
“Unfortunately, to start this new chapter the old chapter needs to be closed,” Choy said.
Lawmakers were mostly encouraging and acknowledged what some described as a diligent effort to address past concerns. They said they didn’t want to point fingers, and preferred to focus on collaborative solutions. “The Legislature’s here to help,” Choy said at the end of the briefing.
“But there was a lot of talk today, so let’s see what happens,” Choy told Civil Beat just after the hearing. He said that he intends to vote to give the university the money it is seeking.
The university has a quality plan to ramp up infrastructure, figure out personnel shortfalls and invest tuition revenues in education instead of using them to plug budget holes, he added.
Aside from the salary requests, the university is asking for money for a range of programs and initiatives, including:
University officials agreed about the myriad of financial woes that have plagued certain campuses and departments, and they all agreed that the UH has made grievous spending mistakes.
The hearings also included a litany of desperate requests.
UH West Oahu administrator Donna Kiyosaki said the campus, which is millions of dollars in debt and lacks an administration building, is making ends meet by “the skin of our teeth.”
UH Hilo Chancellor Donald Straney reminded the lawmakers that he needs construction money in order to salvage the pharmacy college’s accreditation.
The low revenue from athletics, UH Manoa Athletic Director Ben Jay said, is “demoralizing” and the sports program is in dire need of a financial boost.
Meanwhile, officials in charge of facilities and capital improvement said they’re at their wits’ end as they contend with duties that require far more manpower than they have.
Tom Katsuyoshi, who oversees facilities and the grounds at UH Manoa, said he doesn’t even have enough personnel to handle normal repairs and maintenance needs.
“If we were asked to do any more work, we’ll take it on but we’ll fail because we just can’t do enough,” he said. “I’m trying to get out from under.”
As for the new plan to begin to solve the repairs-and-maintenance logjam, it is generating scrutiny from legislators, some of whom question the revenue bond plan, which is essentially a form of debt-service financing. State agencies typically rely on cash funding to pay for repairs and maintenance.
Howard Todo, UH vice president for budget and finance, acknowledged that the plan is imperfect but said it’s the most efficient way of getting the university beyond the maintenance backlog.
“This is a one-time type of deal in my mind,” he said.