The Department of Education is planning to significantly increase its spending on construction in the next three and a half months in an effort to reduce the amount of funding it is set to lose at the end of June because of delays in getting projects off the ground.

The department sparked outrage from state lawmakers late last year when it announced plans to let $465 million in capital improvement funding lapse because it was not going to be able to spend the funds by a state deadline.

The more aggressive spending plan, presented to the Board of Eduction on Thursday, would reduce the funding that’s proposed to lapse to approximately $298 million. Because of other projects it needs to get going, that means the DOE is now trying to spend or allot almost $543 million in construction contracts by June 30.

But BOE members were skeptical about the department’s ability to spend more than half a billion dollars in such a short period of time. The DOE spent just $42.8 million in construction funds in the first five months of the the school year, according to materials from Thursday’s meeting.

The latest version of the state budget, which is moving through the House, would reappropriate funding for every project on the department’s lapse list. If the budget passes as currently proposed, DOE would have another two years to spend $255 million in project funding that would otherwise expire in June, said Rep. Scott Nishimoto, who oversees CIP funding on the House Finance Committee. 

“Basically every project that can go forward, we put it in the budget again,” Nishimoto said. 

But it will be weeks before the final budget is passed by the Legislature and the state is facing significant uncertainty about how to pay for Maui fire recovery.  

DOE Deputy Superintendent Curt Otaguro said the department reduced its initial lapse list by reevaluating its construction projects and determining what funds it could realistically encumber in contracts before June 30.

High-cost projects, including a $35 million centralized kitchen in Wahiawa, are currently in the stages of contracting and will help DOE spend its funding more quickly in the future, he added. 

“We’re focused on getting those complex projects into the queue,” Otaguro said. 

The department has also received verbal confirmation from the Office of the Comptroller that it has an extended deadline of Dec. 31 to encumber funds for six projects, said Audrey Hidano, interim assistant superintendent of the office of facilities and operations. 

But BOE Chair Warren Haruki said he worries the department is neglecting the repair and upkeep of its schools in favor of new, large-scale projects that will help DOE spend its funding more quickly. 

“Don’t disregard what schools need,” he said during Thursday’s meeting.

Nishimoto said he’s hopeful DOE will be able to better handle its CIP funding as it reevaluates its process for constructing and completing school projects.

Even as the Legislature has increased schools’ CIP funding over the past several years, DOE has failed to use the money and spent less than 1% of its appropriations for construction in the last fiscal year. 

Otaguro said the department has developed a series of rules ensuring that school projects can be completed on time and within budget moving forward. The office of facilities and operations will adopt these guidelines in phases, he added. 

DOE will also begin working with legislators before each session to develop a list of projects the department needs to prioritize before funding lapses, Hidano said. 

“It’s a hard call, but we have to think about things like that,” she said. 

Civil Beat’s education reporting is supported by a grant from Chamberlin Family Philanthropy.