POSTED: 04:51 p.m. HST, Jan 31, 2012
LAST UPDATED: 05:09 p.m. HST, Jan 31, 2012
Mayor Peter Carlisle said today he plans to earmark a $450 million city-backed line of credit for the Honolulu Authority for Rapid Transportation to demonstrate to federal authorities that the rail project has the resources it needs to successfully complete construction.
As part of that effort, Carlisle said he will soon ask the City Council for a $100 million increase in the city's limit for borrowing using "commercial paper," or short-term debt that is sold on financial markets.
The line of credit would only be used in a "worst-case scenario," and Carlisle said it would be the responsibility of the HART rail authority to repay the debt in the event that the authority actually needs to draw on that money.
The Federal Transit Administration has warned HART that it must "demonstrate the availability of additional revenue sources" that the authority can tap if construction costs turn out to be higher than expected, or if HART receives less funding than expected from local or federal sources.
HART has suggested in its financial plans that it might seek an extension of the half-percent excise tax surcharge in the event that it needs extra funding to complete the rail project, but Carlisle said today he does not plan to seek an excise tax extension "at this time."
Instead, Carlisle said he and FTA Administrator Peter Rogoff agreed on a satisfactory solution involving a line of credit that allows the project to move forward.