Late last year, Delaware city officials were expecting plenty of trouble in 2009.

Late last year, Delaware city officials were expecting plenty of trouble in 2009.

In November, city manager Tom Homan told city council, "2008 has been a tumultuous year for the American and global economy. ... Our nation is moving toward a long and deep recession that will undoubtedly impact our state and local economy."

As other governmental entities struggle to maintain services during the recession, the city of Delaware's budget projections remain on track nearly six months into the budget year.

That doesn't mean the city is swimming in money, said Homan.

"We are holding our own, but monitoring very closely our key revenue sources, including income tax collection, and will be prepared to make any adjustments if the situation warrants," he said.

City officials will have a clearer picture in the coming weeks when a series of budget meetings is held about 2009 and 2010 finances, said city spokesman Lee Yoakum.

At the end of the first quarter, city finance director Dean Stelzer prepared a budget update for Homan and the city council that showed general fund revenues were in line with budget projections overall.

That hasn't changed in the weeks leading up to the end of the second quarter on June 30, Yoakum said.

All of the department heads are aware of the current economic climate on the local, state and national levels, he said, and are monitoring their revenues and watching expenditures.

While the county was expecting less revenue in 2009 than 2008, Homan's city budget showed a modest revenue increase of $736,000, going from $21.8-million in 2008 to a proposed $22.56-million in 2009. The budget passed by council on Dec. 22 estimated expenditures totaling $22.38-million for 2009.

After the first quarter, Stelzer revised some of his revenue projections, based on collections during those three months.

For example, income tax collections were coming in about 1.8 percent higher than in 2008 rather than the 0.85 percent increase he projected and he now expects to collect about $120,000 more than what was budgeted last fall.

He also reported higher than expected collections in inheritance tax. Revenues coming in slightly lower than projected were in investment income, license and permit fees, local government funds and hotel/motel tax.

These reductions, Stelzer wrote in his March 31 report to council, "so far ... have been mostly offset by other revenues tracking higher than projected. This can change quickly and the current state of the economy continues to pose potential for downturns locally."

After Stelzer put his new projections into the 2009 budget, he anticipates the city will end the year with a cash balance of $3,642,077, equal to 16.27 percent of budgeted 2009 expenditures.

As the budget process began last summer, city officials dealt with the known and unknown, said city spokesman Lee Yoakum.

The known was what local governance funds the city had received in the past, he said. The unknown was more of a challenge because it forced them to "project" what shape the economy would be in throughout 2009, and how it would affect interest rates, home starts, service levels and other revenue producers, he said.

"It was a challenge but not a new challenge," Yoakum said. "These are issues our finance department has dealt with successfully in past budgets ... using historical data and good judgment."

"As that is going on, regardless of economic times, you are building in flexibility to adjust the budget" if revenues don't come in as expected, he said.

That was not as easy for 2009 as it once was, Yoakum said.

"One thing that guided the framers of the budget last year was the city "is not shielded from the economic twists and turns the state and the nation are going through," he said, which forced the city to be even more conservative as it went through the budget process.

Having a city council that is non-partisan also helps , he said.

"Politics are checked at the door ... there is a true team effort from the council to the city manager to the finance department to craft and work within an agreed-to budget."