4 days ago
Honolulu Council to review $11M in general obligation bonds for rail
Mayor Rick Blan giardi's administration has requested more funding to pay the city's required annual subsidy toward the Hono lulu Authority for Rapid Transportation's construction of the over-$10 billion rail line.
To that end, the City Council on Wednesday is scheduled to review for adoption Resolution 150. If approved, the resolution will authorize the city Department of Budget and Fiscal Services director to issue and sell $11 million in general obligation bonds for fiscal year 2026, starting July 1.
GO bond proceeds will finance capital costs for Skyline.
Joey Manahan, HART's director of government relations and public involvement, told the Honolulu Star-Advertiser the city subsidy is part of Honolulu's overall $214 million financial plan for rail. 'It's an annual disbursement of city money to HART, ' he added. 'It's in the city budget.'
This year the city's disbursement to HART was anticipated to be $10 million.
But in a May 15 letter to the Council regarding Resolution 150, BFS Director Andy Kawano asserted that the requested $11 million principal amount of '$10, 000, 000 is the city subsidy for fiscal year 2026 which is included in the Honolulu Authority for Rapid Transportation Recovery Plan of 2022 for the HRTP dated June 3, 2022, and approved by the Federal Transit Authority in September 2022.'
'Due to uncertainty of future interest rates in the market, the not to exceed amount of $11, 000, 000 in the draft resolution is set higher than the actual city's subsidy to HART of $10, 000, 000, ' Kawano wrote. 'The excess amount is to cover any costs of issuance or potential discount amounts which is a possibility in the current market conditions.'
Meanwhile, this GO bond resolution is connected to Bill 24.
That measure, if adopted by the Council on third reading Wednesday, will legally allow the city to pay for capital projects—like rail as well as other transportation and municipal solid-waste sanitation projects—via bond financing.
And on Wednesday the Council is expected to take a final vote on Bill 27—HART's capital budget for fiscal 2026—which proposes a $793.6 million capital spending plan, above the current $574 million—a nearly 38.3 % increase.
The rail agency's latest capital budget includes future contract awards for Skyline's Pearl Highlands Transit Center as well as an H-2 freeway access ramp.
A planned Waipahu Station makai entrance—originally earmarked for $14 million—is now being proposed at $20 million, the CIP indicates.
The city's sale of GO bonds in relation to HART has occurred before.
In August 2023 the city administration announced it sold $271 million in GO bonds to subsidize its 2024 capital improvement program and ongoing construction of the rail project. That year, the city said it received more than $477 million in total retail and institutional orders from investors, including orders from individual Hawaii residents.
'The GO bond proceeds will fund the administration's and Council's joint capital improvement priorities and replacement of equipment to better serve our communities, ' Blan giardi said at the time in a statement.
Previously, Kawano told the Star-Advertiser that GO bonds are not 'specifically designated to a particular part of the rail line '—such as the 5.2-mile segment from the old Aloha Stadium in Ha lawa to Middle Street in Kalihi, which is planned to open for public ridership by Oct. 1—but would instead act as 'bridge financing for the rail construction ' overall.
The Council meeting begins at 10 a.m. inside the Council chambers, 530 S. King St.
