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Honolulu Mayor Peter Carlisle has proposed the city and county establish a line of credit for the city’s $5.17 billion transit-rail project to demonstrate to the Federal Transit Administration (FTA) that the financial resources are in place to complete the project.

In December, the FTA gave approval for the Honolulu Rail Transit project to enter the final design phase, but said the project’s financial plan must be strengthened to cover unforeseen costs prior to receiving a federal funding grant agreement for $1.55 billion.

Carlisle proposed the line of credit as the most cost effective way to satisfy the FTA’s request.

Proposed legislation will be drafted and submitted to the city council for public hearing and action, Honolulu city and county officials said in a prepared statement. Provisions in the legislation would include requiring the city council’s approval before any borrowing from the line of credit would occur, they added.

“The city has consulted with its bond counsel and underwriters, and determined that simply establishing a line of credit, given the city’s fiscal health and circumstances, is prudent,” said Department of Budget and Fiscal Services Mike Hansen.

Governed by the Honolulu Authority for Rapid Transportation, the project calls for building a 20-mile, 21-station elevated light-rail system connecting East Kapolei with Ala Moana Center.