Proposed Monroeville budget holds tax line

Despite an anticipated 2.4% increase in expenditures, Monroeville’s proposed 2024 general fund budget maintains a real estate tax rate of 4 mills.

If council adopts the final budget as proposed, the owner of a property valued at $110,600 — the municipal median, according to Allegheny County — will continue to pay $442.40.

Next year’s budget calls for spending $37.41 million, compared with $36.59 million in expenditures projected for 2023.

“The effects of inflation have impacted the vast majority of municipalities and cities across the commonwealth,” acting municipal manager Joe Sedlak wrote in a detailed message accompanying the proposed budget, dated Oct. 10. “Some obvious examples are gas and diesel prices, and the cost of heating and air conditioning for municipal buildings.”

Premium payments for health care and benefits represent a major contributing factor, with outlays for municipal employees rising by 4% and for retirees, 23.7%, for 2024. Further boosting expenditures is the cost of pension obligations and life insurance for retired employees.

“The projections are for it to increase for the next six years before leveling off, and then begins to decrease as those employees who do not have this benefit begin to retire,” the budget message states, noting that the municipality pays for health care for 53 retirees, 149 active employees and 13 employees or retirees who opt out of benefits for a monetary incentive less than the premium.

By category, public safety represents the municipality’s largest expenditure, at $13.27 million, or 35.5% of the budget.

Following are general government, $6.71 million; public works, $6.06 million; human services — including public works, refuse collection, snow and ice control, and streets and park maintenance — $4.98 million; and debt service on municipal borrowing, $1.45 million, a significant drop from previous years’ payments of $3.2 million.

The general fund budget, which covers municipal operations, calls for transferring $4 million to the five-year capital improvement program, with an emphasis on local roads, bridges, storm sewers and other needs “of an aging infrastructure,” according to the budget message, which states:

“It cannot be overemphasized that these long-term assets are in desperate need of repair or replacement.”

As part of the capital improvement program, $300,000 is earmarked for six new police vehicles.

For next year’s revenues to meet expenditures, the municipality plans to use nearly $2.7 million of its unassigned fund balance of reserve money, with $1.57 million going into the general fund and the remainder contributing to the capital fund transfer.

The fund balance is estimated to be $29.54 million as of Dec. 31. After deducting the amount necessary to meet the municipal policy of keeping at least 10% of a fiscal year’s expenditures in reserve, plus the proposed use for the 2024 budget, the net estimate is $23.69 million.

According to the budget message, Monroeville officials adopted a “pay-as-you-go” strategy for capital improvements, tapping the reserve instead of incurring new debt.

“This strategy has proven effective for the municipality’s bond rating, as evidenced by the municipality maintaining Moody’s Investor Service bond rating of Aa2 with a positive outlook,” the message states.

Aa2 represents the third-highest long-term credit rating that Moody’s assigns to high-quality fixed-income securities with very low credit risk, according to Investopedia.

The budget message, though, contains a caveat:

“It should be noted that funding capital items and projects solely through a fund balance is not sound fiscal policy. At some point, a steady revenue stream will have to be addressed for capital items, or the other alternative is to significantly reduce expenditures in the form of services and/or personnel.”

Along with holding the real estate tax rate steady, Monroeville’s proposed budget maintains the municipal earned income tax at 1.5%; business privilege tax, 4 mills; and mercantile tax, 1.5 mills wholesale and 1.75 mills retail.

“Together, these taxes will propose to account for $25.6 million, or about 68.4%, of the municipality’s proposed revenue generation in 2024,” the budget message states.

Budget hearings are scheduled for 6:30 p.m. Oct. 26 and Nov. 2 in council chambers at the municipal building, 2700 Monroeville Blvd. Copies of the 258-page proposed budget are available for review at Monroeville Public Library, the municipal manager’s office and www.monroeville.pa.us.