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In Honolulu, there’s rail, and there’s everything else.

Mayor Peter Carlisle’s second State of the City address Thursday was a tale of two cities. In one, he’s holding down costs, cutting debt and leaving a brighter financial future for our children. In the other, he’s spending big money, taking advantage of market factors like low interest rates and favorable pricing on construction contracts to put people to work now.

(Read the full text of Carlisle’s prepared speech.)

Carlisle made a point of not focusing on rail. He waited until more than halfway through his hour-long remarks to even bring up the issue.

“I have not changed. My values have not changed. And my enthusiasm to do rail transit the right way has not and will not change,” he said, deviating a little from the script.

(Read the section of the speech dealing with rail issues.)

Asked at a press conference shortly after his speech about the risks inherent in starting above-ground heavy rail construction before securing a guarantee for $1.55 billion from the Federal Transit Administration, Carlisle said the recent Letter of No Prejudice shows that the FTA intends to fund the project.

“There’s a risk in everything. You can’t say absolutely and certainly anything on the planet Earth that’s subject to the hand of man,” he said. “But, ultimately, is this a very, very encouraging big green light type of sign? Yes, in my opinion.”

That’s his stance when it comes to rail. But on everything else involving money, he was more risk-averse.

He began the speech with a focus on frugality in his own upbringing and how that same approach should apply to government. He talked about the attack on Pearl Harbor and the sacrifices of the Greatest Generation, an allegory for sacrifices he believes Honolulu residents must make to leave the city in sound financial shape.

He said every dollar borrowed would cost the city $1.70 over time, and said the city reduced “the non-essential capital improvement projects funded with general borrowing by $65 million” last year.

(Read our scorecard about how Carlisle accomplished goals he laid out in his first State of the City address.)

Next year, Carlisle said the city’s interest payments will be $7 million lower than this year, the first time there will be a decrease in debt service in nearly a decade. (That metric doesn’t include rail, but the city has yet to take on additional debt for rail.)

He also talked about to pay for employee benefits, $40 million to chip away at the unfunded pension liability and even a $20 million increase to the city’s rainy day fund.

“The most important measure of financial stability is the city bond rating,” Carlisle said. “There is a lot in the news these days about governmental entities across the nation, indeed around the globe, receiving ratings downgrades.”

Honolulu, he noted, has a AA+ rating, even with rail taken into account.

Rail wasn’t the only major initiative Carlisle talked about. But in sections on the sewage system and affordable housing, he mentioned potential savings, not potential expenditures to improve services.

Technology is one sector Carlisle might see fit to spend city money on, but even here he made a point of saying that improvements would “lead to new efficiencies.” He touted progress on clean energy, a high-tech road maintenance program and the integration of geographic information system (GIS) software that he said could transform the future of Honolulu and save money.

Rail, however, wasn’t pitched as a money saving project, but rather as something that will improve the quality of life of Honolulu going forward.

His position on the project in the speech can best be summarized with the off-script remark: “If not now, when?”

“The time is right, the actions are correct, the cost factors are contained and manageable. This is the time to do this now,” Carlisle said between prepared remarks on federal support for the project. “It’s not time to get cold feet while you’re walking down (to) the altar.”

(Read how Carlisle’s two mayoral opponents responded to his speech. Here’s to a story on Kirk Caldwell’s response. Here’s to Ben Cayetano’s response.)