HONOLULU -- Mayor Mufi Hannemann's administration informed the federal government in May it is going to be short $500 million it needs to build the rail transit system from East Kapolei to Ala Moana.

However, Hannemann officials did not tell Honolulu City Council about the 10 percent shortfall or inform Oahu taxpayers and that has council members mad.

The city plans to begin construction on the 20-mile rail transit line in December.

In a May 1 report to the Federal Transit Authority, the city reported tax revenues to pay for the project originally projected at $4.1 billion. Now, with Hawaii's poor economy, revenues are estimated at $3.6 billion with a $500 million, or 10 percent, shortfall.

A month later, when council members asked if there was a projected shortfall, Transportation Director Wayne Yoshioka said there was not.

"I think he could have made far more frank and honest statements. Consequently I think this is troubling for all of us herein the public and on the city council," Councilman Charles Djou said.

Yoshioka said he did not tell council members about the shortfall because the May report to the Federal Transit Authority was a draft.

"It is really inappropriate to be talking about a report that is clearly a work in progress," Yoshioka said. "I think it is inappropriate to talk about a shortfall in that manner."

The Hannemann administration said the council and the public will get all the details about transit funding from the final report to the FTA in September.

KITV asked Mayor Mufi Hannemann about the report on Thursday morning. He would not do an interview, but he did give his opinion about the project's future while passing by during reporter Denby Fawcett's interview with Gov. Linda Lingle.

"Do you think this is kind of a signal maybe we shouldn’t do transit?" Fawcett asked.

"We should," Hannemann said while passing behind Lingle.

"Well, that's a decision that the city will have to make of course," she said.

Gov. Linda Lingle said that the state does not have the funding to help out with the deficit.

"I think it would be unlikely that the state would be in a financial position to give the city help at this time because, as you know, the city employees are not being subject to the same impact as our state employees are," Lingle said.