The city of Delaware expects to bring in $1.4-million less in revenue in 2009 than what was expected just a few months ago.

The city of Delaware expects to bring in $1.4-million less in revenue in 2009 than what was expected just a few months ago.

Last week, council met with city administrators to look at ways to maintain services but still maintain a substantial cash balance this year.

The Aug. 24 work session was planned to get council's input on ways to save money to make it to Dec. 31, with about $3.5-million cash on hand, about 14 percent of the city's budget, said city manager Tom Homan. A smaller cash balance could affect the way bond rating agencies look at the city's financial strength in the future, he told council.

The city earlier budgeted $22.56-million in expected revenue for 2009, said Dean Stelzer, city finance director. Now he is projecting the city will collect around $21.2-million by Dec. 31.

Declines in revenue are happening in several areas, according to his budget analysis. They include income tax, property tax, local government and intergovernmental funds, fines and forfeitures, engineering fees, licenses and permits, and investment income.

Some of those are directly attributable to the economy, he said, especially the investment income and revenue sources tied to the housing and construction market.

Stelzer had budgeted $350,000 in investments and so far this year only $25,000 has been realized.

Money from the state government is down about 15 percent, presumably from reductions in state tax collections, Stelzer said. Some of the property tax decline is from delinquencies and from people successfully reducing their property valuations for tax purposes.

With reductions already in place, such as not filling some vacant positions, the city is expecting to end the year with $1.1-million less than projected, Homan told council.

"We can't take the budget we have and look at a $1.1-million budget deficit without impacting the level of services we provide," he said.

"Our first goal is to try and preserve the services we have," Homan said, but the time has come to raise the "budget gauge" from restraint, where department heads watch their spending, to budget cuts.

While he still expects some rebounds in the economy, Stelzer said he could not recommend a wait-and-see approach to the budget dilemma. Neither could Homan as he asked for suggestions from council.

Councilman Jim Moore was on council in 2001-2002 when the council last faced deficits. At that time, the city instituted a hiring freeze for all departments except police and fire. He would recommend they do that again, Moore said.

He also said they should "try to spread the pain across the entire work force," by not filling vacancies rather than laying off individuals, and by reducing the work week from 40 hours to 35.

Councilwoman Lisa Keller asked how much that would save. Homan said city officials would calculate that information. He also said he sees a reduction in work hours as a short-term solution, not a permanent one.

The city must sit down with its seven city bargaining units to reach an agreement on work-hour reductions, he said.

Councilman Joe DiGenova suggested leaving services and hours as they are and look at an income tax increase, such as the one just approved in Columbus, as a long-term solution.

"I am firmly in Mr. Moore's corner," said councilman Gary Milner. "I don't think we can just ride out the rest of this year. ... We need to do something now, not let it ride and take care of it in 2010. ... I am not close to jumping on the tax-increase bandwagon."

Vice mayor Carolyn Riggle also supported Moore's idea.

If the city meets with the bargaining units, it should be made clear that the options are reduction in hours or layoffs, councilman Andrew Brush said.

Homan also told council he has asked city employees for suggestions and has 17 pages of recommendations to wade through before passing them along to council.

The city's finance committee will meet Sept. 8 to come up with clearer options for council to consider when it holds a budget retreat at Ohio Wesleyan University on Sept. 12 beginning at 8 a.m.