Syracuse DPW committee reviews municipal sidewalk funding, budgeting errors and CHIPS reimbursements

At a Syracuse City Department of Public Works (DPW) committee meeting, staff outlined a series of budgeting errors and corrective steps tied to the municipal sidewalk program and described how state CHIPS reimbursements, existing program fees and bond proceeds will be used to pay contractors and fund upcoming sidewalk construction.

The DPW fiscal officer said staff identified overspending from prior work and clerical misallocations that placed capital expenditures in operating accounts. "We started back in November when we realized that we had overspent with Ballard and we needed more money to pay them off," Janet Vendetti, fiscal officer at DPW, said. Vendetti said staff changed their legislative requests several times to clarify that some work will be reimbursed by New York State’s CHIPS program and that two separate letters—one for CHIPS reimbursement and one for bond authorization—are now planned.

Why it matters: The program funds sidewalk construction across the city and relies on a $4,500,000 annual program fee, reimbursement from the state CHIPS program and periodic bond issuances. Missteps in how work was charged between operating and capital accounts led to a shortfall staff said they must address so contractors can be paid and work can start on schedule for the spring construction season.

Key details and numbers

- Program fee and seed funding: The municipal sidewalk program has an intended recurring program fee of $4,500,000 and was initially seeded with $4,500,000 in ARPA funds, according to DPW staff.

- Bonding and CIP: The city has issued bond proceeds previously, and staff said $7,500,000 in bond authorization had been used for sidewalk work. Finance staff said some bond proceeds that should have been recorded in fiscal year 2023 were not, which contributed to accounting and cash-flow problems.

- Shortfall and fund balance: Finance staff said the sidewalk fund showed a negative fund balance of about $2,600,000 in fiscal year 2023 and that the accounting and double-counting of capital and operating spending produced a lack of fund balance of roughly $3,800,000 through fiscal year 2024.

- CHIPS allotment and balance: Commissioner of Finance Mike Kenzer said the city receives one CHIPS allotment at the start of the New York State fiscal year (April 1). "The last few years it's been about 15.8, dollars 15 point 9 million," Kenzer said. DPW staff said the city currently holds about $25,000,000 in CHIPS dollars when past-year carryovers are included.

Discussion and operations

DPW officials described the program as planned maintenance that has expanded since it began in 2021. Neil Burke of DPW said city crews and contractors have increased annual output from roughly 4 miles in the program’s early years to about 14 miles most recently. "We've been moving at a good clip. We always try to do as much as we can," Burke said, adding that sidewalks are generally built after other street work is complete: "Sidewalks are really the icing on the cake when it comes to the street."

Corey Dunham, the city’s Chief Administrative Officer, and other staff stressed that CHIPS historically funded road reconstruction but can reimburse a broader array of transportation-related projects if they meet state eligibility and coordination rules. "Road recon is still king when it comes to CHIPS," Dunham said, noting that the administration has used CHIPS to buy snowplows and to reimburse certain sidewalk work so the program fee can stretch further.

How the shortfall occurred

Finance staff explained the primary cause of the shortfall was a misallocation of capital spending into operating accounts in fiscal year 2024 and the failure to record expected bond proceeds in fiscal year 2023. Mike (Commissioner of Finance) said capital expenditures were reflected in both the operating budget and capital improvement plan (CIP), which effectively double-counted some amounts and left the sidewalk fund out of cash. Vendetti explained earlier attempts to amend ordinances caused confusion among council members because the language made it appear the administration was increasing fees; that draft was withdrawn and revised.

Next steps and council timing

DPW staff told the committee they will submit two separate legislative items to the City Council: a CHIPS-reimbursement request and a bond authorization request. Vendetti and other staff asked that the council consider the items promptly so contracts can be executed and contractors have work this spring. DPW staff committed to delivering an updated carryover list of streets and an estimated mileage total to the council two weeks before the next meeting.

What was not decided

The committee did not vote on legislation in this session. Council action was scheduled for a regular meeting on March 31; staff said work to correct accounting lines and to prepare separate CHIPS and bond letters is underway so the council can act on the requests.

Context and constraints

Staff emphasized CHIPS reimbursements require that the city submit eligible projects after the work is complete and that once a block is claimed for CHIPS it cannot be claimed again for approximately 10 years, so DPW coordinates lead service line replacement, road reconstruction and sidewalk work to maximize reimbursements. Officials also noted the city will not raise the program fee beyond the established $4,500,000; instead the administration seeks to combine program fees, CHIPS reimbursements and bonding to expand the amount of sidewalk work the city can do.

Ending

DPW staff said the financial missteps have been identified and steps taken to keep capital and operating accounts separate going forward. They asked the council to act quickly on the two companion legislative items so contractors can be paid and the spring construction season can proceed as planned.