The City Council yesterday approved a bill that allows Mayor Mufi Hannemann to move forward with $1.1 billion in funding for the initial phase of a 20-mile rail system.

Council members passed the bill with the understanding that the administration will return to seek authorization for floating the $1.1 billion in general obligation bonds.

The bonds are purchased by investors with the promise that the city will repay them with interest during a period of time.

The Hannemann administration hopes to break ground before the end of this year on the $5.4 billion rail project from East Kapolei to Ala Moana.

The $1.1 billion will be applied to the initial phase, including the six-mile concrete track from East Kapolei to Pearl Highlands and storage facilities.

The lone dissenter in the 7-1 vote was Charles Djou, who objected to the city's growing capital improvement project budget of $1.7 billion.

Djou said in slow economic times, the city should be looking at tightening its finances.

“;This is headed in the wrong direction,”; Djou said.

Council member Romy Cachola, who voted for approval with reservations, said he supports the development of the rail system.

But Cachola said the city doesn't need to pass the bill now and has enough money, about $350 million from revenues collected through a one-half percentage point increase in the excise tax on Oahu since 2007.

A number of residents testified they were worried the city was moving forward too quickly without completing an environmental impact statement and receiving written assurance of receiving $1.4 billion in federal money for the project.

“;What is the rush?”; asked Pearl Johnson, president of the Honolulu chapter of the League of Women Voters of Hawaii.

Jeffrey Nishi, president of the American Institute of Architects in Hawaii, said his group supports a rail system but wants a light rail that has the flexibility of operating on the ground rather than the city's proposed elevated rail system.

The architects' group wants to preserve ocean and mountain views as much as possible in Honolulu, group officials said.

Nishi said based on his group's research, a light rail system could also be $2 billion cheaper.

City Transportation Director Wayne Yoshioka said he anticipates contracting in advance for the rail project but added that he will not give contractors notice to proceed with the work until his department receives approval from the Federal Transit Administration to move ahead.

Yoshioka said the city sought the funding bill to enable it to move quickly to obtain financing once it receives federal approvals.

“;The more we wait, the more we're going to pay,”; he said.

Yoshioka, interviewed later, said the city needs to show it has enough funds before it can move forward with obtaining construction contracts.