The city administration is confronting an enormous challenge in distribution of a $2.75 million mitigation fund envisioned to help small businesses affected by the disruptive rail construction along the congested Dillingham Boulevard corridor.

Officials are balking at the idea because, yes, it will involve more work. How should the gatekeeping be set up to ensure claims are justified? Which businesses should be eligible? And what about similar construction headaches farther down the line, or unrelated to the rail project at all?

The observation that this will be a tough administrative task, however, doesn’t negate the fact that it’s necessary. And while there are surely other businesses upon which city construction intrudes, the rail project is unique, distinguished by its scale and duration.

The Dillingham segment of the “Skyline” rail project — with its dense assembly of small businesses, many of them with only limited vehicle access — is undeniably the biggest headache so far for local commerce and commuting.

Bill 40 now before the City Council would set up a framework for distributing the funds first set aside in 2018 and then supplemented the following year under the administration of former Mayor Kirk Caldwell.

Caldwell intended that the builders of the rail project, the Honolulu Authority for Rapid Transportation, would be responsible to administer the fund. But HART voted nearly a year ago to remove itself from that responsibility, and so the fund still sits untapped.

Now that the Council has rightly picked up the issue, the feedback from the administration has been one of furrowed brows. Andy Kawano, city director of budget and fiscal services, said it would be hard to determine how much of a business’ troubles were due to rail, and how much to unrelated managerial problems.

“It’s probably going to require a lot of work on our part to ensure that we get it down right,” Kawano added.

City Councilmember Tyler Dos Santos-Tam said in a telephone interview this week that Mayor Rick Blangiardi did assure him on Friday that “we’re going to figure this out.”

That is encouraging. The administration should come to the Council when the bill comes up next Jan. 24, pencils sharpened and ready to discuss ways to clarify the legislative language further.

Dos Santos-Tam and Councilmembers Radiant Cordero co-sponsored the bill, and they’ve already worked to put in guard rails. Initially the measure was written to provide relief through tax exemptions, Dos Santos-Tam said.

But that relief would go to the landlords. Kamehameha Schools is one of the larger landlords there, he added, and such landowners don’t need the help as much as their small-business tenants do.

So it was recast to benefit the businesses more specifically. The city would provide up to $10,000 in city grant assistance. Businesses would be eligible if they are majority-owned by Oahu residents, employ 15 or fewer workers and generate not more than $750,000 annually.

They also must have opened for business prior to the start of active rail construction within the same city block as the business location.

Dos Santos-Tam said he understands the general concern that money be directed with some precision. But that should not stop the city from acting here. He pointed to Bill 59 on the same agenda; the administration supported its proposed incentives for film studio facilities.

“It was a huge giveaway to Hollywood movie studios,” he said. “But no money for small businesses on Dillingham?”

Oahu can look forward to many improvements that rail ultimately will bring,. But this is the juncture at which the city should find ways to ease the near-term burden rail construction poses on particularly vulnerable businesses.