The City Council last week upheld a pair of budget vetoes made by Mayor Allan Fung, reducing a proposed revenue increase tied to higher street-cutting fees and eliminating funding that had been secured for a new sidewalk replacement cost-share program.

Six votes are needed to override a mayoral veto, and the majority fell short on both measures with a 5-4 margin. Citywide Councilman Michael Farina joined the council’s three Republican members, while the other five Democrats voted to override the vetoes.

The sidewalk program, created earlier this year through a council-approved ordinance, is designed to provide partial reimbursement to eligible homeowners for the replacement of existing sidewalks. The mayor’s initial budget plan included no funding for the program, but the council during its review process designated $100,000.

In a letter to the council outlining the rationale for his vetoes, Fung frames his decision not to fund the sidewalk program, which he characterizes as “non-critical,” as one driven by fiscal prudence.

He also asserts the program – through which homeowners would obtain need permits and incur the cost of any sidewalk project before receiving reimbursement – would limit the resources available to the Highway Department to address unsafe sidewalks, while making public funds available for homeowners wishing “to replace a sidewalk with only minor defects.”

“Much of the debate surrounding the enactment of the sidewalk reimbursement ordinance acknowledged that this program would be a ‘nice to have’ in times of economic prosperity, but in these days of budget restraint and the unfortunate need for a tax increase, I cannot agree with the wisdom of appropriating such a large sum to this program,” the mayor writes.

“While I cannot disagree with the need to focus resources on the maintenance and improvement of our infrastructure, this line item appropriates substantial funds to a program that addresses infrastructure in an inefficient and arbitrary manner.”

Ward 1 Councilman Steve Stycos, who championed the sidewalk program and pushed for it to be funded, said he was “really disappointed” by the mayor’s veto. He said the council had worked with the administration over the past year to develop the program, and that the mayor’s input had been taken into account during that process.

“Not only did he veto the money, he criticized the program,” Stycos said. “I don’t get it … And that’s the first time we heard of it. There was nothing said of the budget discussion.”

The councilman said he intends to continue advocating for the program and pushing for sidewalk improvements in the city, citing the poor and unsafe condition of many.

“We need to do something about them,” he said.

Farina said his vote to uphold the mayor’s veto on the sidewalk funding was made not because of opposition to the program, but due to concerns over the street-cutting revenues.

The budget adopted by the council sought to raise the fees paid by utilities and contractors to cut, or open up, a street to $150, generating a projected $55,000 in additional revenue. The mayor, in his veto letter, cites concerns over potential legal challenges to the increase and indicates additional review is needed.

Farina voiced similar concerns, saying the fee increase was “essentially doubling revenue without any evidence we could double revenue.” Were the sidewalk funding to be authorized and the fee increase to be subsequently rejected, he said, the city would risk creating a “structural deficit.”

With expenditures lowered by $100,000 and revenues decreased by $55,000 through the vetoes, $45,000 is available under the approved budget figures.

Farina said he sought, and received, a verbal commitment from the administration to direct that funding back to the sidewalk program, with the best mechanism through which to do so currently under consideration. Stycos was skeptical that the program would ultimately receive funding for the coming year.

Fung, in explaining his veto of the fee increases, cites legal clams – which the city settled – alleging improper fee increases under a previous administration.

“This proposed increase in revenue from street opening permit fees was made without a proper investigation into the permissible amount, if any, that these fees may legally be increased and without proper legislative findings,” the mayor writes. “I fear this increase may put the city at risk again. Additionally, such an increase alone and certainly any resulting controversy, could tarnish the reputation of our city as a business friendly community.”

Stycos – who led the push for the street-cutting fee increase –said the street cutting fee increase was also proposed following discussions with administration officials during the budget process. He acknowledged the legal concerns, but pointed to higher fees in other communities, such as Newport.

“They should be saying their objections during the budget process,” Stycos said of the mayor and administration.

Fung in his veto letter was critical of some budget amendments approved by the council. The final version directed approximately $500,000 – obtained largely through cuts to various line items – toward slightly lowering the tax levy increase for the coming year.

“The City Council made numerous budget reductions adversely impacting critical needs of the city, including our ability to defend against lawsuits and to ensure proper funding of employee and retiree health care costs, as a means to offset a modest reduction of .02% in the residential tax rate,” the mayor writes.

Stycos, who chairs the council’s Finance Committee, and had supported directing the roughly $500,000 in additional funding toward unfunded police and fire pension liabilities – characterized the active budget review process this year as indicative of growing comfort and familiarity on the part of council members.

“I think we’re all getting a little more knowledgeable,” he said.