Ka Wai Ola - Office of Hawaiian Affairs, Volume 17, Number 5, 1 May 2000 — TRUSTEE MESSAGES [ARTICLE+ILLUSTRATION]

TRUSTEE MESSAGES

CHAIRPERSON'S MESSAGE

SpendT spend and spend some more!

Kamehameha SCHOOLS Trustee Constance Lau recently visited OHA. She was here to explain the spending plan for the Kamehameha Schools and how pohcies and expenditures for educahon are decided by the Kamehameha Schools' trustees. Trustee Lau, a Punahou School graduate (and classmate of OHA Tmstee Hannah Springer), is a Yale alumna who earned her law degree at Hastings School of Law. She has been a corporate manager for Hawaiian Electric Industries and is presently the chief operating officer for Amen- ~ ean Savings Bank. Lau also serves on the boards of the Consuelo Zobel Alger Foundation and Punahou School. She is president of the Hawai'i Justice

Foundation and the University of Hawai'i Foundation. In short, her wisdom on spending tmst dollars was worth a listen. Trustee Lau counseled OHA that while spending formulas may differ depending on the mission of the agency, trast or foundation. there are similarities to be found in most spending pohcies. She gave the Kamehameha Schools spending pohcy as a good example of a mission technically different from that of other tmsts, but fundamentally similar in the sense that tmsts like OHA and Kamehameha Schools are intended to be perpemal. So, while "spending today" is important to address the challenges confronting our people, the main objective is to be sure the tmst lives on for the generations yet to be bom. A spending pohcy provides

trustees the framework by whieh to expend assets to address some of the biggest needs today, such as education, housing and eeonomie development. As importantly, it must reserve the assets for fixture generations. It provides tmstees the abihty to discipline themselves while spending trust funds. It requires tmstees to prioritize the needs of various

communities so the funding levels, whieh often amount to milhons of dohars, ean be defended in the event they are questioned. The spending policy also requires accountabihty. While the Kamehameha Schools trastees have embarked on increased spending, it is likely they are doing so because they haven't been spending enough on education and expanding those opportunities to more Hawaiian youngsters, particularly on the neighbor islands. This has ehallenged the tmstees of Kamehameha Schools to address those needs as soon as possible. And they are doing so by building more schools on Maui and the Big Island. OHA, on the other hand, is in a "defīcit spending" situation for the first time in its 20-year history. While spending remains a eoneem with respect to the fact that requests eonhnue to far outnumber OHA's ability to meet every

need, the fact remains that, unlike the Kamehameha Schools tmstees, OHA trustees eonhnue to make decisions whieh may result in spending nearly twice the amount the investment portfolio is earning in interest and dividends for one year! And this is occurring while OHA eonhnues to subsidize programs that do not pay for themselves. We would all like to spend more today. But there are bills and debts to pay, representing prior commitments. While "spend, spend, spend and spend some more" continues to be the popular refrain, OHA must ask itself, "What kind of spending? For what purpose? At what cost?" More importantly, OHA, like Kamehameha Schools, and unlike the federal, state and city governments, does not have the .% authority to tax. It must wholly rely on its investment portfolio to carry the day with respect to raising funds so future generations ean benefit. ■

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