The city  unveiled today its final application for $1.55 billion in federal funding for the Honolulu rail line, a step rail supporters describe as one of the most significant milestones yet for the controversial project.

The funding application to the Federal Transit Administration includes a new financial plan for rail that projects the 20-mile line will cost a total of $5.16 billion. That excludes about $100 million the city spent on planning and design activities that aren’t counted in the official rail financial plan.

The total price for the 20-mile rail line works out to about $5.26 billion, which is slightly less than city estimated in a draft rail financial plan released last year.

The new financial plan projects the cost of actually building the elevated train system will be about $4.95 billion, which is $79 million more than the city estimated last fall.

However, the city expects to make up that extra cost with savings of about $80 million in borrowing costs because of low market interest rates.

Daniel Grabauskas, executive director of the Honolulu Authority for Rapid Transportation, said FTA staff have been working closely with the city for months refining the application for a Full Funding Grant Agreement, and are extremely familiar with the submittal.

"For us to be here and for the FTA to have agreed with us and worked with us on the numbers and the schedule that we’re submitting, that puts us in a great position," Grabauskas said.

The application now goes to the FTA for a final review period of about 30 days, and from there will be forwarded to the White House Office of Management and Budget for an additional review of about 30 days, Grabauskas said.

The application should then advance to the U.S. Congress for a 60-day review by federal lawmakers. If all goes according to plan, the application should be ready for final approval by the FTA in early November.

If the application is approved, that would amount to a firm commitment by the federal government to provide $1.55 billion in federal New Starts funding to help pay for the Honolulu project.

The federal government has already provided $120 million in federal funds to help finance the planned rail line, and the balance of the money would be provided in a series of appropriations by the U.S. Congress over the next six years.

Opponents of the rail project including former Gov. Ben Cayetano have sued in federal court to try to stop construction, arguing the city failed to properly consider alternatives to rail.

Cayetano is also running for Honolulu mayor, and is promising to scrap the rail project if he is elected. He faces incumbent Mayor Peter Carlisle and former Honolulu City Managing Director Kirk Caldwell, who both support the rail project.