The Honolulu Authority for Rapid Transportation is borrowing $20 million more to pay bills for Honolulu’s rail project, upping the total drawn so far in short-term municipal bonds called TECP or tax-exempt commercial paper.
HART interim CEO Mike Formby explained in a letter to the Honolulu City Council that the draws are needed “in order to meet our cash flow and management needs.”
It’s a topic Always Investigating has been following.
After borrowing $50 million in TECP in August to deal with a cash crunch and keep above a required minimum cash balance, HART will borrow the extra $20 million as of Thursday. HART is authorized to draw up to $350 million of the city’s credit line.
“As the TECP outstanding amount increases, it may need to be refunded through a General Obligation bond issue, which requires City Council approval, similar to any other General Obligation bond issue,” Formby wrote to the council.
The federal government is holding off releasing the remaining half of its $1.5 billion pledge until a recovery plan is completed. The Federal Transit Administration wanted that by the end of the year, but HART has asked for a deadline extension until the middle of next year.
As of Wednesday, the FTA had not yet responded to HART’s request for an extension, which HART submitted earlier this month along with an interim plan outlining steps and options as it builds a recovery plan.