LOS ANGELES — U.S. President Barack Obama included $250 million in his fiscal year 2015 budget for Honolulu's $5.2 billion elevated rail transit project.
The Federal Transit Administration signed an agreement with the City and County of Honolulu in December 2012 for a federal New Starts grant to provide a total of $1.55 billion in funding for the project over the next several years.
The newest installment would come on top of the $250 million already appropriated for fiscal 2014 already and $556 million in federal New Starts transit funds already received for the rail project, according to Honolulu Authority for Rapid Transportation officials.
HART Board Chairman Ivan Lui-Kwan thanked Hawaii's congressional delegation for its efforts in securing the funding: "Continued support from our federal partners is essential as we move forward with construction throughout the rail route," Lui-Kwan said.
The first phase from Kapolei to Aloha Stadium, is expected to open in 2017 and the remainder of the 20-mile line to downtown Honolulu by 2019.
The balance of the project is funded through a local General Excise and Use Tax surcharge for rail, which is a half-percent surcharge on goods and services purchased on Oahu that has been collected since 2007.
The surcharge will continue through 2022 and is expected to yield $3.3 billion for the project. The remainder will come from other federal programs and locally generated revenue, such as interest on funds on deposit.
HART's financial plan, released as part of the 2012 agreement with the FTA, outlined plans to issue $1.7 billion of general obligation bonds backed by project revenues beginning in fiscal 2014 that would be repaid by fiscal 2023. Other borrowing would be done on a short-term basis in the form of tax-exempt commercial paper.
According to the financial plan, the city expected to utilize $100 million of its existing $450 million total tax-exempt CP capacity on a 270-day revolving basis between fiscal years 2014 and 2018. After fiscal 2018, when the $100 million of CP capacity is no longer needed to finance project construction, the city would still have access to the entire $450 million in authorized CP capacity, the report states.
HART officials didn't immediately respond to requests for information regarding debt issuance.
Honolulu Mayor Kirk Caldwell said the continued flow of federal funds is vital to building rail and providing a better quality of life for future generations.
HART's Executive Director and CEO Dan Grabauskas said the funding brings them that much closer to "delivering this project to our community and providing our residents and visitors with relief from some of the worst traffic in the nation."