Nothing to see here.

That’s the message from the City and County of Honolulu to the State of Hawaii.

Facing an $800 million budget deficit over the next two years, the state has floated the idea of borrowing money the city is collecting to finance construction of the rail project. On Wednesday, city officials said that’s not an option because there’s no money available.

That’s not to say there’s no money, though. According to Honolulu Chief Accountant Nelson Koyanagi, there are hundreds of millions of dollars sitting in the transit fund. But they have been committed to contractors and are not available to be loaned out.

While Mayor Peter Carlisle unveiled his budget upstairs, Koyanagi represented the city’s Department of Budget and Fiscal Services at a sparsely-attended Honolulu City Council committee meeting held Wednesday to review the city’s transit fund. Koyanagi said $338 million of the $363 million in the fund June 30, 2010, had been encumbered, leaving just $25 million available for future years.

While he couldn’t provide the council with a running tally of the fund balance, he did say that the city had collected $577 million in General Excise Tax surcharge revenue as of Dec. 31 and had expended $216 million.

“If you were to look at the contracts that we’ve already executed and those that we’re about to execute and those that we’re out there advertising … we believe that we will have nothing available,” Department of Transportation Services Director Wayne Yoshioka told the council. “We will really encumber ourselves completely. … And that’s what we’ve been trying to make clear to the Legislature. That we really don’t have cash sitting around, available.”

The statements were designed to discourage lawmakers from considering Senate Bill 1426, which would allow the state to borrow $200 million and pay it back with $100 million in interest.

Senate President Shan Tsutsui told Civil Beat on Feb. 4 that he assumed city officials would quash the deal, which can’t be finalized without the city’s approval. On Feb. 14, Honolulu City Council Chairman Nestor Garcia and Vice Chair Breene Harimoto met with Tsutsui to discuss the bill. Harimoto told Civil Beat he saw “tremendous barriers” to passing the legislation.

On Feb. 24, the Senate Ways and Means Committee amended and passed the bill, meaning it’s still alive. To hear the city’s administration talk about it, there’s no point in moving forward any further.

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