Mayor Luke Ravenstahl delivered his annual budget to City Council Monday.

And it comes at a time when the city pension crisis has threatened to undermine the city’s efforts to maintain a balanced budget.

This was a good news-bad news address by the mayor.

The good news — balanced budgets and no new taxes. The bad news — it won’t last for long if the mayor and City Council cannot find some common ground to resolve the city’s pension problems.

Council rejected the mayor’s plan to lease out garages and parking meters. The mayor rejected the council’s plan to sell the garages to the Parking Authority.

And that puts the city in uncharted waters.

Over the years, the mayor’s annual budget address combines a bit of tradition with politics, and this year was no exception with Mayor Ravenstahl claiming success for his fiscal stewardship.

“We have brought fiscal discipline back to city government by building a healthy savings account, by submitting structurally balanced budgets, by not raising taxes, by delivering the best services we can afford to provide,” says Mayor Ravenstahl.

Ravenstahl presented his 2011 budget to City Council and an updated five-year plan through 2015.

The mayor proposed $456 million in spending next year, under expected revenues of $456 million, along with no tax increases and no service cuts, leaving the city with a reserve fund balance of $54 million at the end of next year.

All this good news was tempered, however, by the mayor and council’s inability to resolve the city’s pension crisis — which means state administration of the pension and higher payments into the fund.

“It is a plan that recognizes the realities of state takeover and makes sure that Pittsburghers can get through the next five years unharmed even when confronted by pension payments that will double and ultimately triple,” says Ravenstahl.

Drawing down the fund balance will avoid tax increases and layoffs through 2015, the mayor suggested.

There is a downside, however.

“After 2016, I cannot tell you how Pittsburgh will be able to deliver to residents the core services they need without severe cuts and tax increases,” says Ravenstahl.

Ravenstahl called that prospect a financial nightmare.

And he lashed out at City Council during much of his speech. Ravenstahl blames council for the pension predicament, saying Council should have adopted his plan to lease out the garages and parking meters.

Members of Council say it’s the mayor who has been obstinate and obstructionist by rejecting alternative proposals.

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