Mt. Lebanon's municipal commission approved a $30.7 million general fund budget for 2010 by a 3-2 vote on Monday.

"Despite the shortfalls, we found a way to make it work this year," said D. Raja, who voted in favor of the budget. As incoming commission president, he said he would look for ways to increase revenues over the next year.

The approved budget will not change real estate, earned income and deed transfer tax rates in 2010 as compared with 2009.

But the two commissioners who voted against the budget criticized the use of the undesignated fund balance to fill gaps in the budget, and said current conditions required raising taxes or slashing services.

Dan Miller called the 2010 budget a "poorly crafted Band-Aid."

"It continues to drain reserves and borrow money to cover our most routine expenses," he said. "And it fails to state clearly to the public our shared reality, which is that our existing tax structure is insufficient to support our current level of services. I believe there are two options: either we must raise taxes or cut services massively."

John Daley, who lost his re-election bid for commissioner and served his last meeting as president of the commission on Monday, also voted against the budget, saying the municipality must cut services or raise taxes.

"I see us slipping as a community," he said. "It may not be sudden or dramatic, but I think it is noticeable."

When Municipal Manager Stephen Feller presented his recommended budget to the commission in November, he proposed allocating some of the municipality's undesignated fund balance to compensate for rising pension and health insurance costs and flat revenues.

"One of the reasons that we have fund balances is to deal with these kinds of extraordinary situation," he said, referencing the poor economy over the past year.

Even using money from the undesignated fund balance, the balance of about 10 percent still places Mt. Lebanon at an adequate level from the perspective of rating agencies, Mr. Feller said.

"The use of the undesignated fund balance is not something that you want to do every year, but this has been an unusual year, and it seemed appropriate this time," he said.

Some residents at the meeting expressed dismay that under the approved budget, the municipality's union employees will, as governed by contract, see a 3 to 4 percent raise, while non-union employees will see a 0.5 to 1 percent raise effective Jan. 1, depending on the Consumer Price Index.

Looking for more from the Post-Gazette? Join PG+, our members-only web site. You'll get exclusive sports content, opinion, financial information, discounts from retailers and restaurants, and more. Our introduction to PG+ gives you all the details.