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City officials are taking a "wait and see" approach to a $400,000 pension bill --- due at the end of the year --- that they may not be able to pay.

A $600,580 payment is due to the city's pension plans by Dec. 31 to meet its minimum municipal obligations, or "MMO," under Pennsylvania law. About $200,000 remains in the city budget for pension payments.

McKeesport's retirement plan for municipal employees was considered fully funded at the last pension audit, in part thanks to a $5 million bond floated in 2005, says Dennis Pittman, city administrator.

However, that was before last year's stock market swoon drained the value of the securities held in the program. He estimates they've lost 40 percent of their market value since 2007.

"If the (Dow Jones industrial average) got back up to 12,000, I think our pension plan would be fine," Pittman says. The average peaked above 14,000 in October 2007, but has been as low as 6,600 points this year. It closed at 9,725 Wednesday.

Other communities face similar challenges. Pittsburgh's pension plans, for instance, lost $124 million in value during 2008, according to published reports.

According to the Pennsylvania Economy League, municipal pension plans statewide are underfunded by at least $5 billion. The league said that the state's 2,500 local pension plans face a "real and extensive" funding crisis.

Pittsburgh and Philadelphia both received relief last month from the state General Assembly --- the former is going to try and lease its parking garages to a private operator, while the latter was allowed to enact a 1 percent sales tax.

Smaller cities and boroughs, however, were given only a temporary reprieve that state Sen. Jim Ferlo, D-Highland Park, compared to "kicking the can down the road."

"The fact that we're not alone doesn't relieve us of the problem," Pittman says. "They have fixed Philadelphia and Pittsburgh, but they haven't fixed all of them."

Mon-Yough communities have done a poor job of presenting their concerns about pension funding and other problems to Harrisburg, City Councilman Darryl Segina says.

"When Philadelphia or Pittsburgh gets in trouble, their antennas go up," he says. "McKeesport and other communities are way down the list. We've got to make our legislators understand what our problems are. Otherwise, we're all going to remain at the bottom of the barrel."

Segina wants the Twin Rivers Council of Governments to present a unified voice in Harrisburg for its member municipalities, and is pressing Mayor James Brewster to lobby the COG for action.

But it's difficult to get more affluent municipalities to care about the problems of McKeesport or other urban communities, Brewster says: "They say, 'Why should I get involved? I don't have a dog in this fight.'"

With the Pittsburgh region's population continuing to decline, Segina says those attitudes can't hold. "We were once a prosperous community, too," he says. "Most of the communities around us are stagnant --- and because of the age of their housing stock, they're going to start slipping backward."

Several city officials, speaking off the record, say McKeesport and other communities could probably borrow against next year's revenues to pay this year's pension obligations --- but admit that strategy also just "kicks the can down the road."

"The answer is revenue sharing," Brewster says. "We have to get the state in a position to make that happen. But they've got to get their own financial house in order first. We've got a state that can't even pass a budget. It's a bad situation."