A bill allowing schools to accept in-kind services in lieu of rent for use of their facilities was supported by Oahu pastors but opposed by the state Department of Education during a state Senate Education Committee hearing Monday afternoon.

The pastors said the rent can be too high for some congregations. But a DOE spokesman said the change could prove costly to taxpayers while burdening school principals.

Senate Bill 328 would give principals the option of accepting in-kind services instead of fees to rent public school facilities. However, DOE Assistant Superintendent Stephen Schatz said that the bill won’t provide a system that ensures that the value of in-kind services is equivalent to the cost of the rent.

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Some churches can’t afford the rent that schools charge for use of their facilities, pastors testified Monday.

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“You want to make sure that we have a system that’s pretty consistent and treats all the entities in a fair and equitable manner,” Schatz said.

He said that while some principals may be willing to estimate the value of in-kind services such as painting or landscaping, most aren’t trained to make those assessments.

Schatz’s largest concern was that schools could end up losing money if the services aren’t worth the same as rent. Safety could also be an issue, he said, especially if organizations provide services like construction.

“Licensed architects or engineers are required to determine the value of work in construction projects. The DOE is concerned that principals will not have the necessary expertise to determine the fair value,” Kathryn S. Matayoshi, superintendent of education, said in written testimony.

Currently an organization like a church business or government agency can expect to pay $135 to $262 per hour to rent a facility at a public school, according to the DOE website. The cost depends on the size of the space to be used, if it’s inside, and whether it’s air-conditioned. The fee covers the cost of custodial staff, utilities and adds a rental fee for organizations that are outside of the public school system.

Sen. Clarence Nishihara, a Democrat in Hawaii Senate District 17, compared the current DOE rental regulations to a straight-jacket. He said principals have no wiggle room, and they could be losing out on valuable community participation if schools can only accept rental fees for payment.

Nishihara said community participation in schools is critical to the success of students, and by charging fees, the DOE is pushing the community out of schools.

“The value of (community participation) is so much greater than rent,” he said.

Calvary Chapel Central Oahu Pastor Rick Irons testified that churches like his can barely afford the rent. His church has been renting Mililani High School since 1998, and he said the rental fees have increased dramatically. The church pays $4,495 per month for five hours each Sunday to host services, he said

In addition to spending nearly $56,000 per year in rent, the church has also purchased fans, lights and tables for the school, Irons said, adding the congregation is currently building a church on private property, he said.

Jim Hochberg, the attorney for One-Love Ministries and Calvary Chapel Oahu, also supported the bill. He said that non-profits like churches shouldn’t be asked to pay market rent because they help with the upkeep of school facilities.

In 2013, One Love Ministries, Calvary Chapel Oahu and New Hope Chapel were involved in a lawsuit that alleged that the churches shortchanged Hawaii schools by more than $5.6 million in rental fees. New Hope Chapel ended up paying a $775,000 settlement, which went to the DOE and plaintiffs Mitch Kahle and Holly Huber.

Pacific Business News reported Monday that New Hope Oahu’s sister organization has purchased a building for $9.2 million. The church has been leasing the building since 1999, which includes a 35,237-square-foot structure on 51,941 square feet of land.

Pastor George Milgrim said Amazing Grace Baptist Church uses school facilities for $32 per hour plus utilities. He says that the cost is too much for his small church.

“We also offer a class for the children which involves a story time, craft time and activity,” Milgrim said in written testimony. “We strive to be an asset to the community through our outreach.”

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