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Committee approves $10.66M emergency appropriation for Leahi Hospital repairs and legal costs

5337520 · March 28, 2025
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Summary

The House Finance Committee voted to pass an emergency appropriation of $10,660,000 to address mold remediation, construction defects and legal costs at a state hospital campus after lengthy testimony from the Department of Accounting and General Services. Members pressed for after‑action reporting and recovery efforts from the design‑builder.

The House Committee on Finance approved an emergency appropriation of $10,660,000 to address mold remediation, construction defects and associated legal fees at a state hospital (Leahi Hospital campus) following extended testimony and questioning of Department of Accounting and General Services (DAGS) officials.

DAGS described a series of construction defects discovered after project completion, some of which the department says the design‑builder declined to fix. The department asked for funds covering three categories: remediation and repairs (mold/air‑handling and direct construction fixes), a comprehensive study of the facility to identify additional defects (the department initially sought a separate CIP that did not move forward), and legal expenses to pursue recovery from responsible contractors.

During questioning from committee members, DAGS said it had attempted to resolve defects with the design builder but that some items remained unaddressed. DAGS representatives explained that they had oversight responsibilities during construction but that the design‑build procurement creates a single point of responsibility in the design‑builder. The department framed the $2,000,000 legal fee allowance as necessary to pursue recovery of state costs.

Representative members repeatedly pressed DAGS on the adequacy of oversight during the design‑build process and asked for an after‑action report on the emergency appropriation and on steps the department will take to prevent similar problems in the future.

Action: The committee approved the emergency appropriation with technical adjustments to reflect current‑year expenditure ceilings and other housekeeping language. The committee noted reservations from several members and included a direction that DAGS provide an after‑action report and monthly status updates on remediation progress and any recoveries from contractors.

Ending: The committee advanced the appropriation to the next stage with the expectation that DAGS will pursue recoveries and return reporting on remediation costs, the comprehensive study and legal outcomes.