City scrambles to find $44M for rail as feds hold firm on deadline
Mayor Kirk Caldwell’s administration and the Honolulu City Council are scrambling to find ways to provide $44 million in city funds by next month to help finance the Honolulu rail project.
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Mayor Kirk Caldwell’s
administration and the
Honolulu City Council are scrambling to find ways to provide $44 million in city funds by next month to help finance the Honolulu rail project.
The Federal Transit
Administration last month warned the city that it needs to deliver $44 million to the Honolulu Authority for Rapid Transportation
by Nov. 20 as a down payment on the city’s larger $214 million required contribution to rail.
The city administration had planned to issue
$400 million in bonds early next year to support the
rail project, and wanted to include the $44 million as part of that bond package. However, that meant the money could not be delivered to HART until February at the earliest, Caldwell said.
FTA officials rejected that idea in a conference call on Wednesday, telling Caldwell and City Council Chairman Ernie Martin that the
Nov. 20 deadline is firm.
“We’re going to have to figure another way to do this,” Caldwell said at a news conference Wednesday. He faulted City Council Budget Committee Chairman Trevor Ozawa for
delaying efforts to provide the $44 million earlier this year, and said his administration is now looking into borrowing the $44 million by issuing “commercial
paper” or short-term debt.
That may make the money available to HART more quickly, he said, but city officials still need to study the idea to be sure it is “legal, transparent, and there is no financial risk to the city.”
Meanwhile, Martin said
in a written statement on Wednesday that the council will consider a measure on Oct. 30 to allow the $44 million to be drawn from the city’s “Rainy Day” fund or other funds and transferred to HART to satisfy the FTA.
“In construction, they call it bridge financing, a tool that allows the project to continue until full financing is approved,” Martin said in his statement. Once the city issues general
obligation bonds as planned to borrow money for rail, the $44 million can be repaid to the city funds where it came from, he said.
The FTA committed to provide $1.55 billion in
federal funding to help
Honolulu build the rail line, but has withheld nearly $744 million of that money until HART and the city develop a recovery plan for the troubled project that it deems acceptable.