The City Council on Wednesday gave preliminary approval to a plan to make an extra $450 million available for Honolulu’s rail line in case the project runs out of money because of some unexpected mishap or disaster during construction.

The bill would authorize the city administration to borrow the money for rail using "commercial paper," or short-term debt that is sold on financial markets.

Opponents of the project urged the Council to reject what they called "a blank check" that could obligate taxpayers to pay more for rail.

Maili resident Arlene Webb asked the Council to vote down the bill and "begin the end of the rail project." She argued that expanding the city’s popular bus system makes more sense than the $5.27 billion rail project.

"You can be the ones who stop this and turn the tide toward a sustainable and just Earth," she said.

The plan for borrowing was backed by an array of rail supporters, including the General Contractors Association of Hawaii, the Hawaii Laborers-Employers Cooperation and Education Trust and the Pacific Resources Partnership.

Maeda Timson, president of the pro-rail organization Go Rail Go, said the proposed line of credit is needed to secure federal funding for the 20-mile transit line, which she said is critical to the future of leeward Oahu.

"We need this federal funding to complete this project. This is the last piece. This funding represents our tax dollars. Those funds should go to Hawaii to be invested in our transportation system," Timson said. "Don’t jeopardize this full funding agreement. Pass the bill."

The city is moving to establish the line of credit to bolster the financial plan for the project, and to reassure the Federal Transit Administration that the city has enough money to complete the line planned to run from East Kapolei to Ala Moana Center.

The FTA last year warned the city it must strengthen the financial plan before the FTA would agree to commit $1.55 billion in federal funds.

FTA Regional Administrator Leslie T. Rogers said the Honolulu Authority for Rapid Transportation "should demonstrate the availability of additional revenue sources that could be tapped should unexpected events such as cost increases or funding shortfalls occur."

The city already has a program for using commercial paper to borrow up to $350 million for city construction projects, including water and sewer improvements.

The bill Mayor Peter Carlisle’s administration proposed would increase the borrowing limit to $450 million, and authorize the administration to make that money available for the rail project alone.

"We’re just trying to comply with their requirements to move this project forward," Council member Breene Harimoto said of the proposed line of credit. "If we do not approve this, we are in essence killing rail."

Harimoto said HART would have to return to the Council for additional approval before the agency can borrow and use the money. "It is a cushion upon a cushion upon a cushion that is required by the FTA. We have no intention of using it, but it’s there," he said.

The Council amended the measure on Wednesday to delay the effective date in the bill until after the FTA has committed $1.55 billion to help fund rail. That means the $450 million line of credit would not be established until the city receives a commitment for federal funding.

Council members Tulsi Gabbard and Ann Kobayashi questioned HART Executive Director Daniel Grabauskas about how HART would repay the city if the project needed to draw on the line of credit.

HART is funded primarily from a half-percent excise tax surcharge, but almost all of that is already committed to pay for construction, and the surcharge ends in 2022.

Fare collections from rail passengers are expected to cover only 40 percent of the cost of operating the system, so it isn’t clear where HART would get the money to repay the line of credit.

Grabauskas suggested a number of alternatives for raising money, including fare revenue, federal funding, advertising revenue and rent from space that the system could lease to businesses.

Gabbard said those possibilities aren’t enough.

"If you’re going to come here and ask us to approve this, you’ve got to be real about what kinds of sources of funds you’re actually proposing you’re going to use to pay this back, not just pie in the sky," Gabbard said. "I think the fare box is not a common-sense answer on how this will be paid back."

Despite her reservations, Gabbard joined Council members Harimoto, Ernie Martin, Romy Cachola, Ikaika Anderson and Nestor Garcia in approving the measure. Members Kobayashi and Tom Berg voted against it. Councilman Stanley Chang was absent.

The bill still needs further Council approval.