Amid growing concerns over the budget shortfall that rail now faces, the City Council this week introduced a resolution directing the agency overseeing the project to remove all of the so-called federal "bus funds" from rail’s financial plan.

Those $210 million in federal 5307 funds, which the city uses to maintain TheBus, were inserted in rail’s 2012 financial plan — and the move has concerned top-ranking federal transit officials, plus some elected city leaders and many bus riders and bus advocates ever since.

Local transit officials overseeing rail repeatedly assured that those bus funds would be used only as a last resort and that none of the funds have been spent on the rail project. However, now that the project faces as much as a $700 million construction deficit, those dollars are suddenly in play.

Resolution 15-18, introduced Tuesday by Council Chairman Ernie Martin, directs the Honolulu Authority for Rapid Transportation to delete the 5307 dollars from rail’s financial plan and the city’s formal agreement with federal transit officials. It looks to ensure the money is spent only on TheBus and Handi-Van systems.

"The Council has always had reservations about having 5307 in the budget ever since I’ve been on. But we’ve always given HART the benefit of the doubt that that was a real, last resort contingency," Martin said Wednesday. "What we’re doing (with the resolution) is what we probably should have done long ago: have them take it out."

Honolulu Mayor Kirk Caldwell has further pledged that no 5307 funds would be used for rail and that the city would look for other funding sources to replace them. "I, as mayor, will not approve that, and they need to get (the funds) from the city in order for that to happen," he said Wednesday.

On Thursday, Grabauskas said that it’s up to elected city leaders, not HART, to remove the 5307 dollars from the funding agreement because it’s the city that inked that deal with federal transit officials. HART merely carries out the agreement per city policy, he said.

The Council is expected to take up the resolution during the second week of February.

On Thursday, Councilwoman Kymberly Pine told the HART board, "We of course are very worried" about the mounting costs. Nonetheless the Council members "want to see the project succeed," she said.