On a split vote, the City Council’s budget committee Tuesday approved a federal agreement to fund Skyline’s ongoing construction to a planned station in Kakaako.

The action follows the late-November approval of the full funding grant agreement by the Honolulu Authority for Rapid Transportation board of directors.

However, the latest version adds an amendment to recognize the rail route’s original destination to Ala Moana Center. The budget committee’s recommendation — under Resolution 304 — also means the FFGA is expected to advance to the full Council’s Jan. 24 meeting for a final vote.

If approved, it would make available $744 million — of which $125 million would be released early this year — from the Federal Transit Administration to finish the city’s long-­delayed, over-budget rail system.

The FTA is expected to release the grant’s $744 million balance in five installments, between this year and September 2027. That funding release will be based on milestones that include awarding construction contracts and completing contracted work.

In 2022, Mayor Rick Blan­giardi’s administration, under what became known as the recovery plan, truncated the last 1.25 miles of guideways and the planned final two stations near Ward Avenue and Ala Moana Center. That action reduced costs from more than $12.45 billion for a 20-mile, 21-station rail route to a $9.9 billion system with an 18.9-mile, 19-station line terminating at Halekauwila Street.

The initial nine-station, 11-mile route from East Kapolei to Halawa opened to the public June 30.

Prior to Tuesday’s vote, HART Deputy Executive Director Rick Keene told the panel the original FFGA was signed between the city and FTA in 2012.

“And that provided $1.55 billion in funding for the rail project,” he said. “Out of that $1.55 billion we have received $806 million.”

He added that $744 million remains, “and we haven’t received any funding under that grant agreement since 2017.”

As far as the current FFGA, Keene said it’s taken HART over a year, working with the FTA, “to get this document finalized.”

“There were a lot of steps that were required that no one anticipated,” he said. “It’s kind of an unusual situation for the FTA to amend a full funding grant agreement; there were several layers of review done at the state and at the federal level.”

He said if the full Council approves the FFGA on Jan. 24, “after that the document would be ready to execute.”

“The mayor and the administrator of the FTA in Washington will sign the document,” he added. “Lori Kahikina, on behalf of HART, will sign in an attest function,” which could occur by early February.

Once the FFGA is executed, Keene said, “That will trigger the release of the first $125 million of the remaining $744 (million) for the project.”

HART expects to receive the $125 million in February, he added. “It could be March but we’re expecting February.”

During Council questioning, Vice Chair Esther Kia‘aina — highlighting a more than $1.71 billion figure noted within a draft amended grant agreement — wanted to know how much FTA had awarded to HART thus far.

In response, Keene said although $1.55 billion is the FFGA amount, the rail agency also received “other federal funds.”

In 2022, he said, HART received $70 million in COVID-19-related relief funds. It also got over $63.7 million from “a congressional appropriation in December of 2022 that we were finally able to get funded.”

“We recently received $30 million in federal highway funds that were transferred over to us from (the state Department of Transportation),” he added. “And then a long time ago, early in the project, there was $4 million in (federal funds) that were provided to the project.”

Keene noted the next “milestone” for funding included awarding a $250 million contract for the City Center guideway and stations, which is anticipated this summer.

Still, Council member Calvin Say was concerned over ongoing legal entanglements involving HART — ones that could hit the city’s budget.

The Hawaii State Supreme Court issued a ruling Dec. 29 in the ongoing dispute over construction of a planned rail station within real estate developer Howard Hughes Corp.’s 60-acre master-­planned, permitted, mixed-use development within Ward Village.

The years-long case concerns the Texas-based developer, doing business here as Victoria Ward Ltd., and HART’s 2018 condemnation of about 2 acres containing roughly 25 parcels from Cooke to Kamakee streets. The projected cost to taxpayers to acquire the land for the rail line’s Kakaako station near Ward Avenue has been reported to be as much as $200 million, with HART by 2021 having spent nearly $23.3 million in legal fees to defend the action.

“So what’s the status when this particular plaintiff is going to ask courts for $100 million in punitive damages, and would that be incorporated in any of our budget schemes or budget proposals here?” Say asked the deputy director. “I just want you folks to win — win the case, settle it and let’s get out of it.”

In response, Keene said, “It’s an ongoing case, so I’m not sure how much I can say, but it is something we continue to focus on and have a lot of confidence in.”

But Say replied, “So, I wish you the very best, it’s just that I don’t want to be surprised as it pops up next year, ‘Oh, this the amount that we have to settle.’”

“Sure,” said Keene, “we don’t either, but we feel we have a good position.”

Meanwhile, others spoke for and against the FFGA.

Natalie Iwasa, a HART board member who testified as a private person at the meeting, opposed the agreement.

“The FFGA is very complicated; it makes references to a lot of outside documents that are incorporated by that reference, such as the financial plan and some other documents,” she said. “I ask that you take a look at that and get those documents before you make a final decision as a full Council.”

Moreover, Iwasa claimed the project would likely have additional cost overruns as “we still don’t know what the cost will be for the City Center guideway and stations.”

Council member Augie Tulba also had cost concerns.

“I understand how we got here and that this is the best solution for us to be able to move the rail project forward,” Tulba said. “However, by saying yes to this, we are committing $8.2 billion of taxpayer money to this project over the next eight years.”

He added that “this year alone we are earmarking $800 million for this project.”

“What about other projects and needs in our community that would help our constituents in transformative ways?” asked Tulba. “We can’t even have those discussions because we are tying our hands to supporting this.”

But Say countered that the rail line “was 1.9 miles away from the objective of what our predecessors wanted to the Ala Moana shopping center.”

“We’re going to go and reach Civic Center, and I truly believe that maybe it’s not my generation, but your generation and your keiki’s generation that will have the opportunity of utilizing the rail,” Say said. “Because it is another multimodal alternative to just our automobiles.”

Ultimately, the committee voted 4-1, with Tulba dissenting, for the FFGA.