It seems very likely that the council, with rail supporters still representing a majority, will pass Bill 37 in some form. The remaining question is whether it makes any changes, and the administration is continuing its push for approval without amendment.

In a memo received by the Honolulu City Council Tuesday afternoon, Budget Director Mike Hansen answered some of the council’s questions about the proposal.

The response I found most interesting was to a question about what happens if HART is unable to make good on its debt to the city. Hansen does a bit of a dodge and writes that’s unlikely to happen. But he explains that’s because whenever the council is asked to approve a pull on the line of credit, it can ”limit HART’s use of commercial paper to HART’s capacity to pay the debt service and retire the bond.”

In other words, he’s saying council members can reserve the right to ask about HART’s payback mechanism — whether it’s farebox, TOD-related revenue, concession sales or something else entirely — and only approve as much as they feel HART is capable of making good on. It’s like a small business coming into the bank for a loan.

Hansen also writes that the terms and conditions for how HART would pay back the loan should be included in a future agreement and not in the ordinance currently under consideration. The reason: because the federal government says so.

“Conceivably, the terms and conditions could be in either the MOU or ordinance. However, the FTA believes that the terms and conditions should be in theMOU and not in the ordinance. Therefore, in order to meet the FTA’s requirements and obtain the full funding grant agreement the terms and conditions for the pay back of any general obligation bonds should be included in the MOU.”