Dear Mt. Lebanon Friends & Neighbors,

Hope you are all doing well. As you may be aware, the 2010 budget was passed by the Mt. Lebanon Commission on Dec 14th. This budget did not impact services nor have a tax increase despite significant increases in costs. Similar to last year, I am providing an update with a “behind the scenes” look at what happened.

The manager’s recommended budget forecasts Mt. Lebanon to have “flat revenues” for 2010. Given the real estate tax and earned income tax shortfalls in significant parts of the county, having flat revenues shows the strength of our wonderful community. However, Mt. Lebanon has been faced with a significant increase in costs in 2010. Our pension contribution increased 64% over the last year with an increase of $878K, wages increased by $190K (due to collective bargaining contracts already in place for 2010) and medical premiums increased by $331K. The manager proposed allocating our excess fund balance towards addressing these costs for 2010 so that the budget could be balanced. Mt. Lebanon has had some windfalls this year that took this fund balance in excess of the recommended level of 10%; the manager’s recommendation was to use the excess to meet the cost increases for this year.

Since the release of the proposed budget, I have gone through the budget line by line and created recommendations focused on improving the bottom line. I worked with Commissioner Joe DeIuliis to recommend that the Cost of Living Increase for employees, not bound by collective bargaining, to be tied to the CPI (versus the recommended 3% which is considerably higher than the CPI which was indicated to be around 0.5% mid-year for our region). This, and other recommendations, collectively resulted in savings being implemented in the 2010 budget.

During the budget vote discussion, I expressed my concern that we were meeting the increased expenses from the fund balance. I would have preferred to implement organic changes (that I recommended) that could have funded these increases on a sustainable basis going forward. An example of a change that I pushed for was to not fill the currently vacant Finance Manager position and instead have Marcia Taylor (our Assistant Manager) take on these responsibilities and distribute her current responsibilities to others in the Municipality. As you may be aware, Marcia has a very strong financial background and this move would have saved us $141K annually. This was not implemented due to lack of support from the majority of the Commission. It is my hope that in 2010 the Commission will look for organic changes that can be sustainable in addressing the shortfalls.

In addition, in 2010, we need to look at creative ways to increase revenue and improve efficiencies to address anticipated cost increases in future (wage and benefit increases mandated by collective bargaining agreements, etc). As always, I welcome your feedback as we look to address these challenges in 2010. Please feel free to contact me via raja@mtlebanon.org, 412-341-7252 or www.joinraja.com.

Wish all of you and your families a Merry Christmas & Happy New Year. Thanks.

Raja
Commissioner, 1st Ward, Mt. Lebanon