Rail moves over its latest hurdle as City Council passes key funding bill

Rail moves over its latest hurdle as City Council passes key funding bill
The rail cars conduct testing earlier this year. (Source: HART/File)

HONOLULU (HawaiiNewsNow) - The Honolulu City Council voted 7-2 Tuesday to approve a key rail funding bill, in a move to appease demands by the federal government.

The package includes $44 million in bond financing, which will be paid for by property taxes.

The vote by the city council comes nearly a week after the Federal Transit Authority set a Nov. 20 deadline for the city to allocate $44 million to the rail project in ready-to-go funds.

It seemed city officials were anticipating the deadline by the FTA, though they still appeared to be caught off guard by the news. The mayor and city council members blamed each other for letting communication slip through the cracks.

“I am profoundly disappointed that it’s gotten to this point and that the city is now in a predicament of having to come up with $44 million in cash in a very short period of time,” councilman Ron Menor said last week.

The federal government is withholding $748 million from the project until the rail authority completes its financial recovery plan.

If the City and HART don’t meet the FTA’s demands, the city said it could lose that money and lose millions more in a breach of contract lawsuits by rail contractors.

“It’s an unfortunate situation that everyone was put in, in terms of this $44 million,” said Andrew Robbins, CEO for the Honolulu Authority for Rapid Transportation.

“But the FTA has been clear about what needs to be done and the administration as well as the City Council are taking the necessary steps.”

Tuesday’s vote means that for the first time property taxes will be used to pay for part of the rail project. Critics worry that property owners will end up footing more of the bill in the future.

“We were told that no city funds would be used for rail and here we are looking at just that same thing. Another broken promise," said Hawaii Kai resident Natalie Iwasa.

Added City CouncilwomanAnn Kobayashi, who voted against the measure: “The easy part is constructing this project. Because after that, we have the operating and maintenance costs and that’s on us and that’s going to come out of property taxes also."

The bill next goes to the mayor.

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