Cooling schools: AC installation goal only partially reached

The Department of Education has awarded more than two dozen contracts totaling $43.5 million to install just over 500 air conditioners that would get the state halfway to its goal of cooling 1,000 classrooms, a new status report shows.

But the state is still a long way from completing projects. While the DOE has put out air-conditioning bids for 1,107 of the state’s hottest classrooms, as of this month contractors have installed just 209 units while 672 units have been ordered.

Amy Kunz, the department’s chief financial officer, assured Board of Education members last week that the department is on track to finish the $100 million initiative by June 30 — six months after the governor’s original target date.

The “cool schools” effort launched in January 2016, when Gov. David Ige promised to cool 1,000 classrooms by the year’s end following a summer that saw record-high temperatures. But the project faced setbacks after initial proposals came in significantly over budget amid the state’s construction boom.

“Last year I pledged to cool our schools. No one is more disappointed than I that implementation has lagged,” Ige said in his State of the State speech last month. “But we haven’t lowered our sights. We continue to press on.”

The governor included $62 million in his proposed budget for next year to continue installing air conditioners after the original goal is hit.

Of the 11,806 public classrooms across the state, 4,459 had air conditioning as of this week. A total of 51 schools — 20 percent of DOE schools — have at least 90 percent of their classrooms air-conditioned.

Under the 28 contracts awarded so far, the average cost breaks down to $83,911 per classroom, according to a Honolulu Star-Advertiser analysis of the bids covering 519 classrooms on 31 campuses.

Using early industry estimates before Ige’s plan was announced, DOE officials had been budgeting $40,000 as an “estimated median per classroom” cost to cover equipment and installation of air conditioners and other heat abatement measures.

The DOE initially had estimated it could complete the entire project for roughly $45 million, with most schools receiving solar-powered air conditioners. (The legislation providing $100 million in general funds for the initiative requires spending the funds on “equipment and installation costs for air conditioning, other heat abatement measures, energy efficient lighting and other energy efficiency measures” to help offset energy use.)

But last summer when the initial round of bids for projects at six schools started coming in significantly over budget — including a proposal as high as $360,770 to cool one portable classroom in Leeward Oahu — the department halted the solicitation of bids. DOE officials pointed to increased labor costs due to the state’s hot construction market and an initially limited number of companies that were prequalified to bid, but some general contractors complained that the department’s project specifications were overly complex.

The department started to see bids trend lower after it put the work out for bid again, doubled the pool of prequalified contractors to 36 companies, and held so-called prebid meetings with contractors to answer questions about the projects.

Corey Rosenlee, president of the Hawaii State Teachers Association and a longtime advocate for cooling public school classrooms, contends contractors are still inflating their prices. He says before the $100 million funding pot was announced, public school classrooms were being air-conditioned for around $20,000 a pop.

“These contractors were able to see simple math: 1,000 classrooms. $100 million. $100,000 per classroom. And that’s almost exactly what it’s come out to,” Rosenlee said earlier last week at a BOE Finance and Infrastructure Committee meeting, where board members received a status update on the cooling project.

“I think these contractors should be embarrassed by this,” he added. “They are literally making profits off the backs of the children of Hawaii and the sweat off their backs.”

Kunz, the department’s chief financial officer, said the DOE is working with the governor’s office to get the final $30 million of the funding released to meet its June 30 target date. She said the state Department of Budget and Finance has so far released the funding in two increments: $45 million in May and $25 million last month.

Wesley Machida, the state’s budget director, said his office first needs to see details of the spending before releasing the balance. Otherwise, he said, the state can better invest the funds in the meantime.

“We will release the money when they need it,” Machida told the Star-Advertiser. “We can generate revenues from the monies that come into the state treasury and we can get better rates if we invest the money longer term versus shorter term. If they feel that they’re going to deploy the money pretty quickly, we’ll have short-term investments available.”

Laurel Johnston, the state’s deputy finance director, added that the budget office isn’t penalizing the DOE.

“It has nothing to do with us not wanting to give them the money. There’s executing contracts, and then there’s actually paying on them,” she said. “This is not us being punitive at all, and neither is the governor. It’s just about being real about how much cash they need.”

Rosenlee asked the BOE to consider four alternatives to spend the remaining $30 million more efficiently: provide grants to schools and have communities handle the installations; extend the timeline to allow the DOE to do the work in-house; bundle projects to attract mainland companies to bid on the work; or seek an exemption from the state’s procurement code.

“I encourage this board, please, let’s find a way to bring down these prices,” Rosenlee said.