The Honolulu Authority for Rapid Transit will have the ability to tap up to $450 million via low-interest city loans under a bill passed by the City Council on Wednesday.

The Council voted 7-2 to approve Bill 37 after more than three hours of testimony and debate.

Council members Tom Berg and Ann Kobayashi voted against the bill, and members Romy Cachola and Tulsi Gabbard voted yes with reservations.

The bill, which goes to Mayor Peter Carlisle for his consideration, would allow the city to borrow up to $450 million for the $5.27 billion rail project using commercial paper, or short-term debt sold on financial markets.

The Council also passed a $21 million HART operating budget and $491.5 million capital budget.

Kobayashi and Berg led the charge in grilling HART and city officials about the need for the bill. Kobayashi questioned how the city could give HART the ability to tap the money when it has no plan on how it would pay it back.

Kobayashi said that whenever she borrows money, "I make sure I know how I’m paying it back."

HART Chief Executive Officer Dan Grabauskas said the agency is being asked to provide the OK by the Federal Transit Administration before it will commit $1.55 billion for the project through a "full funding grant agreement."

Grabauskas said the short-term bonds are not part of the project’s financial plan and that HART does not intend to use commercial paper bonds. He emphasized that the agency would need to get a two-thirds’ approval from the Council before being able to use such funding.

Grabauskas also said the Council would be involved in planning how the city would be reimbursed by HART should it need to tap the money.

Berg, who represents West Oahu, where the first segment of the project is being built, continued his call for residents be given a chance to vote again on whether the rail project should proceed. Berg said the project as it now stands is not the same as that approved by voters in 2008 and that support for rail in general is waning.

HART critic Cachola questioned Grabauskas about an open letter advertisement addressed to Cachola by a group calling itself "Filipinos for Rail" that appeared in a Filipino weekly newspaper this week.

The ad urges Cachola to support rail and says "our future is in your hands."

Cachola also distributed to his colleagues and Grabauskas an email from Bennette Misalucha, president of business consultant company Red Monarch Strategies, to members of Filipinos for Rail urging them to call Cachola to "make sure he votes in favor of rail." Red Monarch is listed as a "public involvement" subconsultant on the rail project.

Grabauskas said he had not seen the ad or the email and promised to look into the matter. "It would be concerning to me if, after my direction, anyone at HART authorized or paid for this ad," he said, a reference to his promise to reduce the amount of public money spent on public relations.

Misalucha said in an email that her involvement with Filipinos for Rail "has nothing to do with my work on the project" and that no city resources were used to pay for the ad.

An email from the Oahu Filipino Community Council sent to the Star-Advertiser late Wednesday said the ad was paid for with contributions from unions, pro-rail organizations and individual members of Filipinos for Rail, not government money.